Big Pizza Cooks Up Plan to Carve Up Obamacare’s Menu-Labeling Rules

The industry is looking for a change to the FDA regulations mandated by the law.

GLENDALE, CA - JUNE 21: A customer stands at the counter at a Domino's Pizza restaurant on June 21, 2012 in Glendale, California. A group of pizza chains including Domino's, Papa John's, Little Caesars, Godfather's Pizza and Pizza Hut are joining to fight a proposed menu labeling plan that would require them to update and pay for in-store menu boards with nutritional information, arguing that the majority of their customers order over the phone or online. (Photo by Kevork Djansezian/Getty Images)
National Journal
May 27, 2015, 4:05 p.m.

Lynn Liddle knows what you’re think­ing. The Dom­ino’s Pizza ex­ec­ut­ive and chair of the Amer­ic­an Pizza Com­munity—D.C. has a trade group for everything—has spent the past few years scrap­ping over Obama­care’s man­date for menu la­beling at fast-food chain res­taur­ants.

You might sus­pect that’s be­cause Dom­ino’s doesn’t want its cus­tom­ers to see how un­healthy the piz­zas they’re eat­ing are. She says you’re wrong—it’s be­cause nobody goes to the phys­ic­al store to or­der piz­zas. So why make those busi­nesses pay for something people won’t see?

The pizza in­dustry lost the ini­tial battle when the Food and Drug Ad­min­is­tra­tion re­leased fi­nal reg­u­la­tions based on the Af­ford­able Care Act’s menu-la­beling pro­vi­sion at the end of last year. Pizza chains were re­quired to post cal­or­ie in­form­a­tion on their in-store menu boards or face civil or crim­in­al pen­al­ties. They, along with the rest of the fast-food sec­tor, must com­ply by Dec. 1 of this year—un­less that dead­line is delayed, as some be­lieve it could be.

This is Big Pizza’s beef: People or­der pizza by phone or on­line. (Liddle pressed this re­port­er on how he pro­cures his pies. Usu­ally through a mo­bile app, for the re­cord.) The in­dustry es­tim­ates that only 10 per­cent—and Liddle said it could be even as low as 2 per­cent—of their cus­tom­ers are ac­tu­ally go­ing to see the cal­or­ie in­form­a­tion that they put up in stores. Be­cause of that, they didn’t ini­tially ex­pect the FDA to man­date cal­or­ie counts on pizza places’ phys­ic­al menus. But that’s what the fi­nal reg­u­la­tion re­quires.

“Very few people walk in­to a pizzer­ia, look up on a menu board and say, ‘Hmm, what will I have?’” Liddle said in an in­ter­view. “We don’t want to not do la­beling. We do it already. We don’t want to get out of it. We want to do it. We want to do it in a way that makes sense for our con­sumers, that they can un­der­stand, and we want to do it in a way that won’t bur­den our small-busi­ness fran­chisees.”

Un­der the FDA rule, Liddle said, the small-busi­ness own­er of a Dom­ino’s fran­chise is go­ing to have to spend a couple thou­sand dol­lars post­ing the in­form­a­tion and it might not even help those se­lect few cus­tom­ers, any­way. Dom­ino’s has 34 mil­lion dif­fer­ent pizza com­bin­a­tions; Liddle be­lieves Pizza Hut has tens of mil­lions more. The in­dustry there­fore ar­gues that nobody is go­ing to get any­thing out of the huge cal­or­ie ranges that its mem­bers are go­ing to have to post on the menus at their stores to cov­er all the pos­sib­il­it­ies and com­ply with the rules.

So the Amer­ic­an Pizza Com­munity thinks it has a solu­tion. It sup­ports a bill in­tro­duced last month by Rep. Cathy Mc­Mor­ris Rodgers, the No. 4 Re­pub­lic­an in the House, and Demo­cract­ic Rep. Lor­etta Sanc­hez that would re­vise the ACA’s menu rules. Res­taur­ants where a ma­jor­ity of or­ders are made off-premises (read: pizza places) could post their cal­or­ie in­form­a­tion on­line to com­ply with the law. That way, the in­dustry ar­gues, cus­tom­ers could get the in­form­a­tion where they’re or­der­ing. Dom­ino’s put out a video last week of cus­tom­ers com­plain­ing about the reg­u­la­tions to try to build some mo­mentum for the le­gis­la­tion.

The bill has 23 oth­er co-spon­sors, but no com­mit­tee hear­ing has been sched­uled yet, so its le­gis­lat­ive fu­ture is un­cer­tain. Mc­Mor­ris Rodgers and Sanc­hez’s of­fices did not re­spond to re­quests for com­ment. Pizza typ­ic­ally isn’t a ma­jor play­er on Cap­it­ol Hill, but Liddle said they were plan­ning a fly-in of pizza ex­ec­ut­ives to break bread with law­makers about the is­sue.

Menu la­beling is “prob­ably our largest le­gis­lat­ive is­sue,” Liddle said. “I think what we’re ask­ing for is not really con­tro­ver­sial “¦ I be­lieve we can get it done.”

They are, however, go­ing to be bat­tling what Liddle said she “lov­ingly call(s) the food po­lice,” the groups and in­di­vidu­als who strongly sup­port Obama­care’s menu rules.

Sara Bleich, an as­so­ci­ate pro­fess­or at Johns Hop­kins Uni­versity who has done re­search on menu la­beling, said that the FDA rules, which were broad­er than many had an­ti­cip­ated, had been “ex­cit­ing from a pub­lic health per­spect­ive.” They brought amuse­ment parks and pre­pared food at gro­cery stores un­der their pur­view, along with the pizza and bur­ger joints.

For now, the gen­er­al con­sensus of the avail­able stud­ies, con­duc­ted in cit­ies such as New York and Seattle that had menu la­beling be­fore Obama­care, is that the policy has lim­ited or no ef­fect on in­di­vidu­al people’s be­ha­vi­or—though there is some counterevid­ence. But their real im­pact, ac­cord­ing to Bleich’s re­search, seems to be that when res­taur­ants are forced to be trans­par­ent about their food, they start mak­ing it health­i­er. She has doc­u­mented a 10 to 12 per­cent de­cline in cal­or­ies at some es­tab­lish­ments since menu-la­beling took ef­fect in U.S. cit­ies.

“The reas­on that is so im­port­ant is that in­di­vidu­al be­ha­vi­or is very res­ist­ant to change,” Bleich said. But if res­taur­ants change in­stead, “that is a huge win for pub­lic health.”

That’s why the “food po­lice” would op­pose the car­ve­out that Big Pizza wants. For one, not all Amer­ic­ans have In­ter­net ac­cess and some there­fore wouldn’t be­ne­fit from the in­dustry’s pro­pos­al. Second, and per­haps more im­port­ant: If the re­search holds, the new­found trans­par­ency will lead to health­i­er pizza re­gard­less of what cus­tom­ers do. That is con­sist­ent with what Obama­care was try­ing to ac­com­plish.

“The counter is ba­sic­ally trans­par­ency. Con­sumers should have uni­form trans­par­ency,” she said. “Put­ting it on a menu board along­side prices is el­ev­at­ing in a way that the In­ter­net is not.”

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