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What You Need to Know About the Affordable Care Act FDA Menu Labeling Regulations
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Background

The FDA published a proposed rule in the Federal Register to establish requirements for nutrition labeling of standard menu items in chain restaurants and similar retail food establishments. The FDA also proposed the terms and conditions for restaurants and similar retail food establishments registering to voluntarily be subject to the Federal requirements. FDA has issued a final rule. It took this action to carry out section 4205 of the Patient Protection and Affordable Care Act. The final rule and its requirements can be found here.

The regulation becomes enforceable on December 1, 2015.

Does it apply to Airlines and Catering Establishments that Serve Them?

Under the rule, ‘‘location’’ means a fixed position or site. Transportation venues such as trains and airplanes are not covered by the rule because they do not have a fixed position or site.

Caterers should review their operations to see if they may be covered by the rule. The criteria are explained in the section below on who is covered by the rule.

Who is Covered by the Rule?

To be covered by this rule, an establishment must satisfy several criteria. First, the establishment must be a restaurant or similar retail food establishment. Under this rule, that means a retail establishment that offers for sale restaurant-type food, except if it is a school as defined in 7 CFR 210.2 or 220.2. Restaurants and similar retail food establishments include bakeries, cafeterias, coffee shops, convenience stores, delicatessens, food service facilities located within entertainment venues (such as amusement parks, bowling alleys, and movie theatres), food service vendors (e.g., ice cream shops and mall cookie counters), food take-out and/or delivery establishments (such as pizza take-out and delivery establishments), grocery stores, retail confectionary stores, superstores, quick service restaurants, and table service restaurants.

Consistent with the statute, to be covered by the rule, a restaurant or similar retail establishment must be ‘‘part of a chain with 20 or more locations doing business under the same name (regardless of the type of ownership of the locations) and offering for sale substantially the same menu items.’’ A restaurant or similar retail food establishment that does not satisfy these criteria may choose to be covered by the rule by registering with FDA using a process established in the rule. Under the rule, ‘‘location’’ means a fixed position or site. Transportation venues such as trains and airplanes are not covered by the rule because they do not have a fixed position or site. ‘‘Doing business under the same name’’ means a restaurant or similar retail food establishment must share the same name as other establishments in the chain (regardless of the type of ownership of the locations, e.g., individual franchises). The term ‘‘name’’ refers to either the name of the establishment presented to the public or, if there is no name of the establishment presented to the public (e.g., an establishment with the generic descriptor ‘‘concession stand’’), the name of the parent entity of the establishment. ‘‘Offering for sale substantially the same menu items’’ means offering for sale a significant proportion of menu items that use the same general recipe and are prepared in substantially the same way with substantially the same food components, even if the name of the name of the menu item varies.

Legal Basis

On March 23, 2010, the Affordable Care Act (Pub. L. 111-148) was signed into law. Section 4205 of the Affordable Care Act amended 403(q)(5) of the Federal Food, Drug, and Cosmetic Act (FD Act) by, among other things, creating new clause (H) to require that certain chain restaurants and similar retail food establishments with 20 or more locations disclose certain nutrient information for standard menu items. FDA has the authority to issue this rule under sections 403(a)(1), 403(q)(5)(H), and 701(a) of the FD Act (21 U.S.C. 343(a)(1), 343(q)(5)(H), and 371(a)). Section 701(a) of the FD Act vests the Secretary of Health and Human Services, and, by delegation, the Food and Drug Administration (FDA) with the authority to issue regulations for the efficient enforcement of the FD Act.

Costs and Benefits

Chain restaurants and similar retail food establishments covered by the Federal law operating in local jurisdictions that impose different nutrition labeling requirements will benefit from having a uniform national standard. Any restaurant or similar retail food establishment with fewer than 20 locations may voluntarily choose to be covered by the national standard. It is anticipated that chain restaurants with 20 or more locations will bear costs for adding nutrition information to menus and menu boards. FDA initially estimated that the total cost of section 4205 and this rulemaking would be approximately $80 million, annualized over 10 years, with a low annualized estimate of approximately $33 million and a high annualized estimate of approximately $125 million over 10 years. These costs (which are subject to change in the final rule) included an initial cost of approximately $320 million with an annually recurring cost of $45 million.

Because comprehensive national data for the effects of menu labeling do not exist, FDA has not quantified the benefits associated with section 4205 of the Affordable Care Act and this rulemaking. Some studies have shown that some consumers consume fewer calories when menus have information about calorie content displayed. Consumers will benefit from having important nutrition information for the approximately 30 percent of calories consumed away from home. Given the very high costs associated with obesity and its associated health risks, FDA estimates that if 0.6 percent of the adult obese population reduces energy intake by at least 100 calories per week, then the benefits of section 4205 of the Affordable Care Act and this rule will be at least as large as the costs.

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