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Massachusetts Vending Operators Rally Against Proposed 500% License Fee Hike On Machines

Posted On: 2/27/2012

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vending machine fees, Massachusetts vending machine fee hike, Massachusetts Department of Public Health, Massachusetts Vending Association, Bob Frotten, New England Ice Cream Co., vending machine business, vending operator, vending machine tax, Food and Drug Administration calorie-labeling rules for vending machines

BOSTON -- The Massachusetts Department of Public Health is seeking to raise the annual vending machine licensing fees from $3 to $20 as part of the fiscal 2012 state budget.

The fee hike of more than 500% would affect an estimated 22,000 vending machines across the Commonwealth. Massachusetts said it would generate about $375,000 annually.

DOPH officials say the proposed $20 fee would fund inspections to ensure the vending industry's compliance with the federal calorie-disclosure law passed in 2010 as part of healthcare reform legislation, and new state rules banning snacks high in sugar and fats in schools. The state last raised its vending machine license fee in 2003, when the levy jumped from $1 to $3.

"We hope to fight this, and the only way is to create public awareness," said Massachusetts Vending Association president Bob Frotten of New England Ice Cream Co. (Taunton, MA). "The industry has responded very effectively in places like schools and health institutions where nutrition is a concern. The view that vending is all bad is misdirected. In certain venues where there are vending machines, candy and soda are requested by customers, just as they are in c-stores and supermarkets. The Department of Public Health has its own agenda and is bullying our industry."

A public hearing on the proposed fee increase will be held on March 14, and Frotten will testify on the industry's behalf. One key point he will emphasize is that the U.S. Food and Drug Administration has yet to issue its final calorie-labeling rules for vending machines, and until it does, there is nothing to inspect.

Frotten will also assert that it is unfair to tax all operators for inspections of school vending machines, which represent only a small percentage of those in operation.

"And if they find there are operators not following the rules, then they should be fined, but it's not fair to punish and entire industry," Frotten added.

The financial burden the higher fees would impose on operators already struggling with thin margins will be another key area of Frotten's testimony. The MVA president is asking his fellow operators to join him at the hearing to offer their own testimony on how a $17 per-machine fee hike would impact their companies.

"If you take a company with six routes and 1,000 machines, you go from a $3,000 bill for licensing fees to a $17,000 bill -- on top of increased fuel costs, commodity costs and all the other costs they face," Frotten said. He added that many vending machine operators are tied into contracts and don't have the flexibility to pass the higher costs along to consumers, which would make it even more difficult for them to remain profitable.

"Operators will have to raise their prices to stay in business," Frotten concluded. "The vending operator embodies the small business every politician speaks about, and this fee increase would be a tremendous burden on them."

The Massachusetts Vending Association is readying a petition that it will post at, along with stickers for operators to put on their machines to promote the cause. The decals will inform patrons about the proposed fee hike and that its passage would necessitate higher vend prices, and ask them to help fight the measure by signing the online petition.

Click here to read the proposed regulation and details on the public hearing.