NAMA Official Surveys Regulatory Landscape Surrounding Micromarkets

MYRTLE BEACH, SC -- National Automatic Merchandising Association senior director and counsel of government affairs Sandy Larson provided an update on NAMA's ongoing work in familiarizing all levels of government with micromarkets, and in developing technical standards for the fast-growing unattended retail model.

She told operators to expect more regulations on all fronts, as the president ends his term in office. This is because, historically, the number of federal regulations enacted tends to hold steady through presidential reelections, then spikes during the incumbent's last year in office. President Obama already has passed more regulations than all of his predecessors, going as far back as the Carter administration.

Sandy Larson

Because no one (in most cases) is manning that store, health department concerns center on food safety and food security. Thus, micromarket operators generally face restrictions dictating where the self-checkout stores can be placed and requirements that their markets be equipped with surveillance cameras.

Many operators are unclear about state taxes they are required to pay on food sold through their micromarkets. Larson recommended consulting an accountant, tax attorney or state revenue department for more information; rules for vending machines vary widely from state to state, and likely also will with micromarkets.

When dealing with states and localities, the first thing to do, Larson advised, is determine which agency has jurisdiction for food safety and regulatory issues. Sometimes it's the health department; in other cases it's the agriculture department. It could be handled at a state or local level, and also can be a hybrid of the two.

"Our biggest recommendation is get out in front! Work with agencies early," advised Larson. "Contact NAMA for assistance if needed. We have helped with standard guidelines that have been adopted by many states and counties. Work with governments, not against them."

Los Angeles County has written the most comprehensive set of micromarket standards to date, according to Larson, and NAMA worked with public health officials to establish those rules, resulting in fees that are lower than in many jurisdictions. The county has made a booklet available detailing the rules, entitled Micromarkets Guidelines Standard Plan Approval, that has served as a model for other jurisdictions.

Larson emphasized that it's far more effective for NAMA to proactively approach a regulatory agency directly, rather than wait until its officials contact one of its operator members. It's far less desirable for an operator to replace a vending machine with a micromarket, and then have a health inspector visit who finds nothing in the book that pertains to micromarkets.

NAMA has provided input to help shape regulations in many states. Indiana was one of the first to create micromarket guidelines, which have served as a model for states and municipalities across the country. Ohio has added a brief paragraph to its food code addressing micromarkets. And Texas recently adopted micromarket language in a food code revision.

Maricopa County in Arizona reduced its micromarket plan review fee from $615 to $270, and also reduced the annual fee from $235 to $155, after gaining a clearer understanding of the self-checkout stores. The county also made the fees retroactive and refunded operators the difference. And Minnesota is giving operators until the end of the year to comply with the guidelines that the state has adopted and to apply for the required permits.

Larson outlined some of the most common regulatory guidelines for micromarkets as follows:

Have a person in charge: Find a way to make the health department comfortable that someone is explicitly responsible for the micromarket.

» Surveillance video recordings should be kept for 14 days, and made available for the health department to review, in the event of suspected tampering.

» Contact information for the operator should be readily available.

» A contact person should be assigned on premise to handle immediate issues, such as spills.

A limited-access environment is important. Micromarkets should only be available to employees or guests of employees, so incidents that may compromise food safety can be tracked.

Locking cooler. Refrigerated display cases must be time and temperature-sensitive, automatically locking in the event of a power outage or other event that raises the temperature above 41°F. for 30 minutes.

Site plan approval: Most regulating agencies require a drawing or schematic detailing the market layout, number of coolers, presence of locking coolers, where the kiosk is located, etc. Some will perform an inspection and walk through, once the store is open.

Size/square footage of market location: Regulations usually permit a larger space than most micromarkets occupy.

Food limited to prepackaged: Prepared properly, with tamper-proof seals.

Larson also offered recommendations for micromarket operators that can help minimize red flags that might concern health officials. They are:

» Single-cup coffee is better than pots.

» Contact information should be posted on the kiosk.

» Fountain drinks are not recommended because of concern over spillage and having no one on premise to clean up.

» No icemakers, for the same reasons as fountain dispensers.

» Only sell packaged, sealed food.

» Provide freshly prepared food when possible.

» Have a designated place for hand-washing, and a mop sink for cleanup.

» The location must meet standard health department requirements, including flooring, doors that automatically close to protect against dirt and vermin infestation, etc.

The federal government is working toward an addition to the U.S. Food Code for micromarkets, with guidance from the Food and Drug Administration.

The Conference for Food Safety, a non-profit organization that unites industry members, regulatory agencies, academia, consumer and professional organizations, is working to establish recommendations on how the Food Code should be modified to address unattended food merchandising operations.

Larry Eils, NAMA's Knowledge Source on Health and Safety, is involved in the process. An update is expected in the second quarter of 2016. From there, the proposed rules will go to the FDA for consideration and approval.