Menu Labeling Regulations

The Food and Drug Administration (FDA) recently proposed regulations to implement Section 4205 of the Obamacare statute which requires restaurants and vending machine operators to disclose the calories contained in foods offered for sale. These disclosure requirements apply to restaurants with 20 or more locations and vending machine operators with 20 or more machines.

After first explaining that their proposals are necessary pursuant to the terms of Obamacare, the FDA doesn’t stop there but instead essentially asserts that Americans are too stupid to make individual choices regarding food. The FDA defines the lack of caloric information on every existing vending machine as a “market failure.”[1] The FDA states, “This market failure occurs because at the time of purchase, consumers do not value calorie information as much as they do later, when the effects of excess calorie consumption are evident.”[2] The FDA believes that, “if a sizable fraction of consumers were willing to pay for—and discriminate based on—the visible calorie information at the point of purchase then the industry would provide it to them.”[3] This is what the FDA calls a market failure: that the American people are not demanding this information on vending machines because they value the instant gratification of their taste buds over their future health.

We recognize that the FDA is forced by the Act to promulgate a regulation that covers vending machines. However, that does not give the FDA license to insult the collective intelligence of the U.S. population that uses vending machines.

To start, the FDA’s analysis completely fails to recognize that most individuals are cognizant that certain foods contain more calories than other foods.

Further, the FDA believes that the “increased attention to the caloric content of covered vending machine food may then result in an increased availability of lower calorie options, and an increased demand for these options.”[4] However, the FDA does not discuss the very real possibility that more disclosure of caloric information may actually lead consumers to purchase foods with a higher calorie count. Consumers of limited means when faced with two menu options costing the same amount may choose the option that has a higher calorie count in order to get more “bang for their buck.” The FDA assumes that any pressure on vendors will be in the direction of lower calorie options, but there is a distinct possibility that the pressure will actually push the other direction, toward higher calorie foods.

After these regulations are finalized any covered restaurant or vending machine operator who does not strictly adhere to the specific posting requirements will be deemed guilty of “misbranding” food, a violation of 21 U.S.C. § 331, which is part of the Food, Drug and Cosmetic Act. This is a criminal violation that subjects unwary small business owners to potential jail terms and thousands of dollars in fines.

For example, consider the potential criminal liabilities that would arise for the small business owner who owns 19 vending machines and then adds one more bringing their total to 20. If that vending machine operator was not able to instantly place the mandated signage adjacent to all 20 vending machines they would be subject to a jail term. This also will have a negative stimulus effect on the economy because vending machine operators with 19 machines will be forced to weigh the costs and possible penalties associated with growing their businesses to the point where they have 20 or more vending machines. Because having 20 vending machines may bring these small business owners into a position where they are subject to jail terms if they are not able to comply with the labeling requirements, many may chose to not grow their businesses. Given the great economic difficulties facing our country this is not a desirable result.

We submitted comments to the FDA discussing these problems. Given the problems found in both the substance and the supporting analysis of the proposals, they should be withdrawn.
To read our comments visit:

1. Food Labeling; Calorie Labeling of Articles of Food in Vending Machines, 76 Fed. Reg. 19,238, 46 (April 6, 2011)(to be codified at 21 C.F.R. §§ 11 and 101).
2. Id.
3. Id.
4. Id.