Pizza Chains Say Obamacare Could Deliver Price Increases

National Journal
Clara Ritger
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Clara Ritger
Nov. 20, 2013, 7:13 a.m.

While many busi­nesses have com­plaints about Obama­care, pizza chains say the law might de­liv­er their cus­tom­ers a price in­crease.

Last year, the CEO and founder of Papa John’s prom­ised a price hike if the pres­id­ent’s sig­na­ture health re­form ini­ti­at­ive was al­lowed to take ef­fect. Pizza prices would be 14 cents high­er to cov­er the cost of provid­ing em­ploy­ees health in­sur­ance, “Papa” John Schnat­ter said.

Now Dom­ino’s has joined the law’s crit­ics. Ex­ec­ut­ive Vice Pres­id­ent Lynn Liddle said the cal­or­ie-post­ing re­quire­ment will cost the Dom­ino’s mom-and-pop fran­chisees as much as $5,000.

“We’re a big-name brand, but these are all very small-busi­ness people,” Liddle said. “Half of our 1,000 fran­chisees in the United States only own one pizza store.”

The Food and Drug Ad­min­is­tra­tion re­leased its draft reg­u­la­tions for com­ply­ing with the Af­ford­able Care Act re­quire­ment to post cal­or­ies con­spicu­ously in food es­tab­lish­ments. The FDA’s draft reg­u­la­tions re­quire the cal­or­ie counts to ap­pear wherever there is a worded menu for cus­tom­ers. Dom­ino’s takes is­sue with the re­quire­ment to post them on in-store menu boards, ar­guing that their on­line Cal-O-Meter should be suf­fi­cient.

“It spits out the cal­or­ie counts for your spe­cif­ic choice of pizza,” Liddle said. “You can’t just slap those cal­or­ies on a menu board. Each pizza is so dif­fer­ent, there’d have to be a range.”

Be­cause most cus­tom­ers or­der pizza on­line or over the phone, Liddle said, the ex­pense of the in-store menu board doesn’t make sense. The com­pany found that on av­er­age, its New York City stores spent $5,000 to com­ply with the cal­or­ie-post­ing re­quire­ment passed by the loc­al gov­ern­ment. They have not, however, dis­cussed wheth­er meet­ing the re­quire­ment would mean a price in­crease.

Papa John’s and Dom­ino’s aren’t the only chains to level com­plaints at the ad­min­is­tra­tion. One-time Re­pub­lic­an pres­id­en­tial can­did­ate Her­main Cain, also the former CEO of God­fath­er’s Pizza, told Time last year that if Obama was reelec­ted, deep-dish would dis­ap­pear.

“With Obama in a second term,” Cain said, “there will be no pizza. For any­one.”

Luck­ily for pizza-lov­ers, the worst-case scen­ario isn’t a world without their hand-tossed staple, but rather, a more ex­pens­ive pie.

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