An independent economic analysis has found the decision by the Food & Drug Administration (FDA) to delay the national menu labeling law for one year from May 5, 2017, to May 7, 2018, could end up costing consumers $15 for every $1 saved by the food industry.
The study concluded that delaying implementation of the law increases costs through increased healthcare costs and loss of productivity.
The study was funded by the Center for Science in the Public Interest (CPSI) and the Consumer Federation of America and prepared by Dr. Mark Cooper, Ph.D.
CPSI said the finding is in contrast with the FDA’s benefit-cost analysis, which already conceded the cost to consumers was greater than any savings to industry by 2 to 1 ($2 cost to consumers for every $1 saved by food establishments that have not yet added nutrition data to their menus).
“This economic analysis once again proves the importance of menu labeling, which the public has been waiting for over seven years since the law passed in 2010,” said Colin Schwartz, senior nutrition policy associate at CSPI. “The FDA’s delay of the law comes with a steep price tag for consumers.”
The study finds that changing the requirements could cost foodservice establishments additional hundreds of millions of dollars. It concluded that since the vast majority of foodservice establishments have already incurred the initial costs of compliance, delaying the law is unlikely to result in any cost savings for them.
“Because of the last-minute delay of the rule and the uncertainty introduced by the Trump Administration, many foodservice establishments, including the nation’s top 50 restaurant chains, have already made large investments to abide by the law and give their customers what they want,” said Schwartz. “Now they are faced with uncertainty at the prospect of changes that would cost them additional hundreds of millions of dollars to redo their menus, retrain staff and conduct legal reviews.”
“While this delay was misguided, we are heartened that FDA Commissioner Scott Gottlieb, M.D. agrees that consumers have access to calorie information when eating out, and decided not to further delay the law past May 2018. We will remain vigilant that the FDA’s final guidance on menu labeling later this year ensures that the consumer-choice spirit of the law remains intact,” Schwartz added.
The National Association of Convenience Stores (NACS), the Food Marketing Institute (FMI) and the New York Association of Convenience Stores (NYACS) all hailed a settlement reached Aug. 25 that blocks New York City’s efforts to enforce FDA menu labeling rules before the May 7, 2018, federal compliance deadline.
Lyle Beckwith, NACS’ SVP of government affairs, said, “This settlement with New York City is a clear victory for common sense. States and cities cannot enforce menu-labeling rules until Food and Drug Administration (FDA) rules are enforced. We’re pleased that New York City has agreed not to jump the gun.”
Beckwith added, “There are good reasons for everyone to wait: It is increasingly clear that the federal regulations have real problems that must be fixed before they go into effect. A recent economic study confirmed that total costs for the industry under the rule will be more than triple the FDA estimate, reaching more than $300 million per year—and seven times the estimate for convenience stores.”
