Costly Menu Labeling Rule in Affordable Care Act Looming

Restaurant chains and many grocery stores could soon feel a financial pinch with the release of the Food and Drug Administration's (FDA) new menu labeling requirements under Obamacare, which is also causing anxiousness inside the food industry as the FDA's final ruling on the specifics of the requirements is not expected until the end of the year.

Section 4205 of the Affordable Care Act requires nutrition labeling of "standard" menu items for chain restaurants with 20 or more locations,  but it's language inside that Act that applies the same measure to "similar retail food establishments," such as convenience stories and groceries that is sparking an outcry from some in the food industry. As the law is currently written, grocery stores with deli services and convenience stores that sell prepared foods would have to comply with the labeling requirements.

"FDA's proposed menu labeling rule imposes a billion-dollar burden on supermarkets, with no additional, quantifiable benefit to supermarket customers, according to FDA's analysis," Jennifer Hatcher, senior vice president for government and public affairs at the Food Marketing Institute, said in a statement.

The costs to businesses if the rule is finalized could amount to $1 billion in the first year it is fully implemented, according to supermarket industry figures. The FDA, however, has estimated a cost of $537 million for the initial year rollout, with recurring costs up to $64 million annually.

Missouri Republican Sen. Roy Blunt and Maine Independent Sen. Angus King have introduced a bill that would limit the labeling law to restaurants only. A companion bill has been introduced in the House. To read more, click HERE.