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The Obama administration finalized its regulation to require vending machines to post calorie information on all of its items on Thursday, a rule that will cost businesses as much as $40 million to comply.
The regulation, which is mandated under Obamacare, requires virtually all vending machines to post nutrition fact signs in “close proximity to each article of food or the selection button.” The rule will go into effect in 2015.
The Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) estimate that the rule will cost businesses $25.8 million initially, with a “recurring cost of approximately $24 million.”
In order to offset the costs to the economy, the administration hopes that 0.2 percent of the obese population will eat 100 less calories per week.
The administration admits it does not know what benefits, if any, the rule will have.
“FDA has not estimated the actual benefits associated with proposed requirements,” the regulation said. “Food choice and consumption decisions are complex and FDA is unaware of any comprehensive data allowing accurate predictions of the effect of the proposed requirements on consumer choice and vended foods.”
When releasing the final rule, the agencies said, “comprehensive national data for the effects of vending machine labeling do not exist.”
“Some studies have shown that some consumers consume fewer calories when calorie content information is displayed at the point of purchase,” the final rule notice said. “Consumers will benefit from having this important nutrition information to assist them in making healthier choices when consuming food away from home.”
The regulation applies to any company that owns 20 or more vending machines. The FDA estimates it will affect 10,800 operators that control between 4 and 5.6 million machines. Each company will pay an estimated $2,400 to comply.
American Action Forum Director of Regulatory Policy Sam Batkins said the regulation is redundant, and primarily affects small businesses.
According to the regulation, 97 percent of the companies that will be affected fall under the Small Business Administration’s definition of a small business. “Therefore, the [FDA] believes that the proposed rule would have a significant economic impact on a substantial number of small entities,” the agency said.
In a newly released video, Batkins attempts to make his own office compliant with the rules.
Batkins covers the front of a vending machine with 18 calorie notices that block the snacks from view. “Redundant, that’s one way to describe the calorie labeling requirements for vending machines,” he said.
“They’re also really expensive,” Batkins said. “The administration admits the proposal could cost roughly $40 million annually. Burdensome. Ninety-seven percent of the affected entities are small businesses.”
Batkins noted that the regulation could increase prices by 3 to 5 percent for small businesses. “Beneficial?” he asked. “Even the administration doesn’t know the full health benefits of the proposal.”
Batkins then asks his iPhone helper Siri “how many calories are in a Snickers bar?”
“The answer is about 278 dietary calories.”
“More calorie labeling: redundant, expensive, and unnecessary,” he said.