Imposing Needless Burdens on Small and Large Businesses, FDA’s Proposed Regulations on Menu and Vending Machine Labeling Requirements Need More Work

May 5, 2011

By Wes Siegner & Susan J. Matthees

On April 6, only 2 weeks behind schedule, FDA issued proposed rules (here and here) implementing section 4205 of the Patient Protection and Affordable Care Act of 2010 (“PPACA”), which requires certain restaurants and vending machines to disclose nutrition information.  Last summer, FDA requested public comments on PPACA § 4205 implementation and two draft guidance documents related to PPACA § 4205 (see our previous posts here and here).  FDA reports that it received about 875 comments on how to implement PPACA § 4205 and 80 comments on the draft guidance, and considered all those comments when drafting the proposed rules.

FDA estimates that the initial mean cost of complying with the proposed regulations is $315.1 million, with an estimated mean ongoing cost of $44.2 million.  FDA did not estimate the benefits of the proposed regulations.  As we blogged in March, there is still uncertainty as to whether menu labeling will provide any benefits for consumers.  Nonetheless, FDA is set to impose significant added costs on food retailers, many of whom are small business franchisees, which will potentially drive up food costs and make these businesses less profitable.

Under proposed 21 C.F.R. § 101.11, a covered establishment would be required to disclose the number of calories in standard menu items by listing calories adjacent to the name and price of the menu item and under a heading “Calories” or “Cal.”  As currently drafted, a covered establishment would include chain restaurants, certain grocery stores, certain convenience stores, and coffee shops, but would exclude movie theaters, airplanes, trains, and amusement parks.  Calorie information for variable menu items, defined as standard menu items that are available “in different flavors, varieties, or combinations, and . . . listed as a single menu item,” would be required to be declared in a range from lowest to highest (e.g., soft drink, 0-400 calories).  Menus would also be required to bear the statement, “A 2,000 calorie daily diet is used as the basis for general nutrition advice; however, individual calorie needs may vary.”  The regulations would also require establishments to provide more detailed nutrition information upon customer request, including information on fat, saturated fat, trans fat, cholesterol, sodium, total carbohydrate, dietary fiber, sugars, and protein.

Under proposed 21 C.F.R. § 101.8, certain vending machines would be required to disclose the total calorie information for all food options in the machine, unless the Nutrition Facts box can be examined prior to purchase.  Calorie information could be displayed in or on the vending machine.

The proposed rules show that FDA remains uncertain on how to implement PPACA § 4205.  For example, FDA proposed that calories for variable menu items be disclosed as a range, but also described 5 different options it considered and asks for further comments.  Similarly, FDA tentatively concluded that the definition of a retail food establishment would be limited to establishments “whose primary business activity is the sale of food to consumers,” but asks for comments on how to determine whether “sale of food” is an establishment’s primary business activity. 

This firm submitted comments to FDA on behalf of Domino’s Pizza encouraging the Agency to recognize the difficulties in menu labeling for highly variable and customizable foods like pizza, particularly those that are primarily ordered for delivery over the phone, internet, or mobile device.  There are two unique ordering factors for delivery pizza that make in-store menu labeling a costly and ineffective requirement:  due to the variety in the sauce, toppings, and crust choices, there are millions of ways that a customer can order a pizza, so menu labeling every option on a menu board is impossible; and most people ordering a pizza for delivery or pick-up do so over the phone, internet, or mobile device.  Our comments asked that FDA consider the inherent difficulties in menu labeling customized and variable food items like pizza when drafting the proposed rules, and recognize that for delivery food like pizza, online menus are the only way to provide complete and accurate calorie information and are often the only menu a consumer consults.

The Agency rejected the use of online sources as the sole means for communicating nutrition information, even in cases where most orders are placed over the phone or internet.  Instead, FDA concluded that “menu” means “any writing of the covered establishment” (emphasis added).  FDA explained that this means that under the proposed rule, a restaurant would be required to label a printed menu, menu board, and even a take-out menu mailed as a flyer to a consumer’s home. 

FDA appears to have concluded that calories in multi-serving foods should be listed by the entire food (e.g., the calories in an entire extra large pizza rather than per slice), although the Agency did ask for comments on the issue of multiple-serving foods.  From the standpoint of the consumer and the retailer, labeling calories for the entire multi-serving food is meaningless.  Multi-serving foods are generally meant to be shared; few people consume an entire extra-large pizza, 10-piece bucket of chicken, or full rack of ribs in one meal.  Forcing consumers to do their own math on how many calories they have consumed defeats the purpose of menu labeling. 

FDA determined that all pizza would be categorized as a variable menu item.  Alternatively, FDA could have determined that variations of standard pizza builds were customized item (e.g., pepperoni pizza is a standard pizza, pepperoni pizza with pineapple is a customized item), which would have been exempt those customized orders from menu labeling requirements.  FDA also tentatively concluded that calories for such foods should be listed by ranges.  For many foods, including pizza, the range of calories can be significant.  For highly variable foods like pizza, a more informative way to disclose calories is by one serving of commonly ordered pre-set builds of pizza (e.g., a slice of a large cheese or pepperoni pizza).

For food items such as pizza, should FDA impose a final rule requiring menu labeling for in-store and take-out menus, the result will be costly to small business franchisees while providing no real useful information to consumers.  Comments to the proposed rule on menu labeling are due June 6. 

Comments to the proposed rule on vending machine labeling are due July 5.