Over the past several years, we have pointed out that the modern vending industry, which took shape in the waning years of the postwar economic boom, had to organize swiftly and effectively in order to avoid being strangled at birth. Vending machines as novelty gimmicks attracted little notice, but once they began to appear in large numbers, they immediately attracted the attention of people who had no idea who owned and operated them, but who observed that they had money inside, and wanted it. Some of those people were thieves; others were politicians. The latter were more dangerous.
Our concern has been that the past three decades saw a generally bipartisan consensus that economic growth was best promoted by leaving businesses free to innovate and grow. But now, we seem to be facing a sudden resurgence of the old urge to regulate and tax. It remains to be seen whether the several generations who have come of age during that long thaw have retained the survival instincts needed to respond successfully to the threat.
A number of events taking place recently have brought this question to the forefront. The most recent is the publication of the "Affordable Health Care for America Act" (HR 3962), the measure assembled by several committees for consideration by the House of Representatives.
There is much to say about healthcare reform, but it will not be said here. Rather, we are concerned with the widely reported inclusion in the measure of a requirement that an operator of more than 20 vending machines must conform to on-machine nutritional labeling requirements. (The issue is summarized at the National Automatic Merchandising Association website, vending.org, in a legislative bulletin dated Oct. 30 under Government Affairs and the subject of an article on Page 14.) The companion bill being considered by the Senate has not been published at presstime, but NAMA reports that it will contain the same requirement.
The first point that can be made about this is that it started out a long time ago: as an attempt to expand the powers assigned to the Food & Drug Administration to regulate labeling on packaged foods for sale at retail. Some in Congress wanted the FDA to have similar authority to require that chain restaurants post nutritional information for each item on their menus. Apparently as a concession to small restaurant operations, chains with fewer than 20 outlets were exempted. We don’t know who then said, "What about vending machines?" or who decided that running 20 vending machines is an enterprise similar to running 20 restaurants. What concerns us is that no one seems to have made any effort to understand that there are a lot of individuals and couples who operate that many vending machines from the family garage, using the family car.
The second point is that nutritional labeling has only the most remote bearing on "affordable healthcare." To argue that it is relevant at all, one must contend that the inability of citizens to read nutritional labels on items sold through vending machines causes them to spend more for healthcare. A similar argument might be made for giving the federal government authority to control the construction and maintenance of local roads leading to hospitals.
The NAMA legislative alert reports that the Congressional Budget Office requested that the association estimate the cost of complying with that requirement. This estimate, for the first year, is $56.4 million; and "costs increase dramatically if Congress imposes additional requirements."
It also reports that neither the House nor the Senate measure includes a proposal to levy a federal excise tax on sugar-sweetened beverages – yet. "However, NAMA remains concerned that an amendment may be offered on the floor of the Senate to impose this tax to help fund healthcare reform," the association warned. Again, the logic of relating sugar-sweetened beverages to healthcare is (at best) tenuous.
In the real world, the effect of initiatives like this always is experienced at the margins: The location that’s marginally profitable, but becomes marginally unprofitable when the cost of serving it is increased by federal mandate, or the driver who is employed in running a route, and becomes unemployed when that route is consolidated with another after a number of stops suddenly become unprofitable. If this harm were offset by some public good, it might be tolerable – or it might not; the view that "to make an omelet, you must be willing to break a few eggs" has an unsavory history. But, in this case, there is no benefit; the injury has been inflicted with casual unconcern by officials who express the serene belief that they are fighting for truth, justice and the American way of life.
The only way to counter these evils is to organize, as the vending pioneers did. The National Automatic Merchandising Association and state organizations, both NAMA State Councils and independent trade groups, are the starting point – but just the starting point. It is essential to renew our acquaintance with our elected officials, and to hold them to some standard of decency.