February 10, 2014

SHOCKER: Obamacare’s Restaurant Calorie-Label Mandate Is A Complete Mess.

After the flawed rollout of the Affordable Care Act, most of Washington focused on repairing and delaying the law’s most obvious problems. However, a handful of lawmakers have finally noticed one of the law’s hidden regulations: a strict calorie labeling requirement for chain restaurants, vending machines, and other food distributors. What at first appeared to be more bureaucratic but harmless government do-gooding is now proving a verifiable nightmare for small business owners and federal regulators alike. . . .

FDA Commissioner Margaret Hamburg admitted that she “actually thought [calorie labeling] would be one of the more straightforward tasks…but little did I know how complicated it would be.” Hamburg’s concerns are hardly unfounded, but it’s small business owners and franchisees—not FDA bureaucrats—that will feel the most pain under the new law.

Although the law is designed to target corporate fast-food giants, in practice it will largely affect individual franchises that effectively operate as independent small businesses. For example, over 80 percent of McDonald’s locations are owned and operated by franchisees. Each of these franchisees will now be tasked with complying with the mandate–paying for new signage, removing profit-generating advertisements to make room for the calorie data, updating menus every time recipies change, and accommodating inspectors.

Moreover, the regulation itself is so poorly constructed that it presents unforeseen hurdles for franchisees. Pizzas, sandwiches, and burritos, among other common fast-food meals, can be custom-ordered in hundreds of combinations, and the law arguably requires restaurants to provide customers with calorie data for each. It’s also unclear whether non-traditional food retailers—for example, bookstore cafes, hotel minibars, and food trucks—will be subject to the labeling requirements. Furthermore, it’s unclear what penalties restaurateurs will face if they inadvertently fail to comply.

Sounds like the whole thing should be found void for vagueness. Of course, if we actually struck down laws that were so unclear that a person of ordinary intelligence must guess at their meaning, we’d be striking down a lot of laws. Which would be fine.

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