WASHINGTON -- A notice published by the Food and Drug Administration in the Federal Register (Nov. 5, 2010) estimates that the vending industry will need to spend 14 million hours annually to comply with the calorie disclosure requirements inserted into the healthcare reform legislation passed early this year.
The National Automatic Merchandising Association said it is urging Congress and the administration to rethink the effect of imposing new regulatory burdens unrelated to public safety and health on small business at a time when the economy is struggling to recover.
Discussing this estimate, NAMA senior vice-president of government affairs Ned Monroe observed, "Our industry has always understood that consumers need access to product nutritional information, but requiring an industry to invest 14 million hours annually is absurd and sure to kill jobs. We are opposed to the colossal burden these regulations impose on our industry, and this report just confirms what an enormous and unfair burden it truly is."
The legislation requires vending companies that operate 20 or more machines to provide a sign in close proximity to each article of food or the selection button that includes a clear and conspicuous statement disclosing the number of calories contained in the article.
Monroe said that the FDA "estimates a total of 14,068,808 recurring hours, with nearly all of these for vending machine operators, including 31,408 recurring hours for recordkeeping and 14,037,400 recurring hours for third-party disclosure."
He emphasized that the vending industry has had programs in place for years that address concerns about the role of a balanced diet in maintaining health.
"Over the past several years the vending industry has helped address skyrocketing obesity rates by investing millions of dollars into its Balanced for Life program to educate consumers about the elements of a healthy diet and the importance of physical activity," Monroe pointed out. "In addition, as part of that work, we developed our highly acclaimed 'Fit Pick' nutrition rating system that clearly marks in the vending machine 'better-for-you' items that meet strict nutritional guidelines.
"Considering that most products purchased out of a vending machine are the same ones that are well-known and available in other retail channels everywhere, and not prepared menu items where consumers may be unaware of what the nutritional content is, we question whether this measure is necessary at all," the NAMA government affairs expert explained.
"It's even more troubling that, after reviewing the calculations in the report, the 14 million hour estimate might not even be enough," Monroe continued. "The implementation for this policy is completely wrong. It's obvious that the FDA needs to rethink this approach completely. In this economy where our small business members are struggling to survive, they can't afford to spend 14 million hours each year to comply with this new regulation."
The FDA notice is online at edocket.access.gpo.gov/2010/pdf/2010-28014.pdf.
In response to this and other threats, NAMA has called on Congress and the administration to freeze and reevaluate new federal regulations not directly related to health or safety of the public. The proposal is similar to job creation ideas advanced by former President Ronald Reagan, Gov. Mitch Daniels (R-IN), the U.S. Chamber of Commerce and the Heritage Foundation.
Monroe said that the new rules, and the likelihood of more now on the horizon, add to the uncertainty of job creators. Owners of vending businesses, for example, confront new Americans with Disability Act regulations, light-truck fuel efficiency standards, 1099 reporting requirements, the calorie disclosure regulations and Energy Star regulations.
"When our vending operators can't even make payroll, how can they be expected to comply with all these new red-tape bureaucratic regulations?" he wondered.
"A one-year regulatory timeout, forbearance or freeze will provide our small businesses a chance to regroup and recover in the current economy," he pointed out. "NAMA calls on President Obama to issue an executive order to all federal agencies directing them to evaluate the economic impact of implementation and promulgation of new regulations that do not impact the health and safety of the public, and where legal flexibility allows such relief.
"Congress should pass legislation calling for federal agencies to also freeze and re-evaluate the need, cost and value of new regulatory rule writing in an effort to create jobs," Monroe added. "America's small businesses must have regulatory relief if we are to start creating jobs. Now that the voters have spoken, let's start creating jobs by providing relief from all this new federal red-tape."
The Small Business Administration reported in September 2010 that existing total regulatory costs amount to approximately $1.75 trillion each year. New rules and regulations continue to be promulgated, with agencies drafting 43 new rules during the 2010 fiscal year alone.