Although the Trump Administration is moving to “gut” the Affordable Healthcare Act (ACA), or as we all know as “Obamacare,” there is one provision of the measure that has seemed to slip through the cracks. On May 7, a controversial provision went into effect that requires food service businesses with 20 or more locations to list nutritional information for food items on all signs and printed menus.
The measure will not only be ruinously expensive, both in dollar amounts to make the change and the man hours to do it, but it is highly unlikely to change consumer behavior for the better. Supporters of the Obamacare provision claim that consumers will have more information about what they’re eating, leading to people making healthier choices, and reducing the obesity rates in the U.S.
Congress actually had many chances to amend the rule within Obamacare, make it more business-friendly, and reduce the 14.5 million hours the Office of Management and Budget (OMB) estimated it would take to comply with the mandate. Despite bipartisan support for the changes, Congress failed to act.
The Foundation for Economic Education reports that the average pizza shop will incur around $5,000 in annual costs per shop. Most consumers, those who order online or place an order over the phone, would never even see the calorie and nutritional information charts. Furthermore, the long lists of options and nutrition data may not help reveal the total nutritional content of their order, considering the math would have to be done by the consumer, adding up extra cheese, sauce, meats, and different types of crust.
Though, technology has given rise to quicker and easier solutions to problems. Many restaurants, including Domino’s Pizza, have found tech-forward ways of letting consumers know what’s in their food.
For example, Domino’s has a “Cal-o-meter,” an online widget which tallies the nutritional content of an individual order of pizza, based on size and toppings. Easy, cheap, and satisfactory, right? No, online tools do not satisfy the Obamacare provision.
Restaurants and food service businesses must have a list of nutrition content for all menu items posted at the physical location. This also includes buffets, delis, sandwich stands, and lunch counters in grocery stores – many of which have regularly-rotating choices. According to the report, the Food Marketing Institute, a trade organization, estimates of complying with the law will cost grocery stores up to $1 billion in the first year the Obamacare provision is implemented.
Congress’s inability to effectively and sensibly govern is concerning enough. However, what is even more disconcerting is the fact that no one who supported the Obamacare provision, when it was buried deep within the bowels of the ACA, considered how the measure might work in real life. Research into similar efforts across the country have indicated that instead of helping people eat fewer calories, the measure could actually have the opposite effect – a backfire in consumer behavior.
New York City and Philadelphia have implemented similar measures with posting menu items and the nutritional information thereof. Studies conducted on the endeavors found that nutritional disclosure has no appreciable changes on consumer behavior.
One study commissioned by New York City found that the effect varied by chain. In some restaurants, consumers did order lower-calorie meals when presented with nutritional information. However, in some shops, like the Subway restaurant chain, the nutritional information labeling actually correlated with consumers increasing the calorie content in their meals – some speculate as an effort to maximize their dollar-to-calorie spending.
The move to provide more information to customers is commendable. However, this is just another example of how government intervention ruins the problem which it was trying to alleviate.
Not to mention, failure to comply with the law could land shop owners in prison for a year and with a fine of up to $100,000.