On April 5, 2017, the National Grocers Association (“NGA”) and National Association of Convenience Stores (“NACS”) filed a citizen petition with the U.S. Food and Drug Administration (“FDA”). The citizen petition (“petition”) urged the FDA to halt and consider changes to its final menu labeling rule (“final rule”), which is set to take effect on May 5, 2017.  The final rule requires restaurants, grocery stores, and other types of food businesses to list on their menus information regarding the caloric intake of food.  Industry has been closely monitoring the final rule because of the high associated compliance costs and as such, the rule has come under much debate.  In an attempt to clarify the requirements under the final rule, on April 29, 2016, the FDA issued guidance on the final rule.

The citizen petition filed by NGA and NACS (the “Petitioners”) captures many of the overall industry concerns. The petition requests a stay of the final rule and that the FDA reconsider the rule.

Key arguments raised in the petition include:

  • Lack of clarity in the final rule: NACS and NGA state that the FDA does not have a clear understanding of the final rule and what is necessary for industry to comply with the rule. For example, the FDA was unable to clarify the difference between a menu, which would require calorie information under the rule, and an advertisement, which does not require calorie information. The Petitioners state that the FDA staff admitted that these types of basic compliance determinations were not yet made, which the Petitioners believe is a fundamental bar to industry compliance. The petition stated that many entities would have to pay significant costs to comply with the rule and at the end of the process, may still not be in compliance with the rule due to the lack of clarity in the rule and from the FDA.
  • Burdensome costs for compliance: NACS and NGA argue that the FDA’s final Regulatory Impact Analysis, which stated a total cost of compliance for all industry of nearly $1 billion over ten years, was incorrect. Instead, the Petitioners argue that the supermarket industry alone will incur a $1 billion cost for initial compliance. Therefore, the Petition encourages the FDA to reconsider the content of the rule and its cost estimates with regard to the non-restaurant retail businesses that are facing especially high compliance burdens.
  • Final rule is contrary to the Affordable Care Act: The Petitioners argue that the FDA wildly expanded the scope of “similar retail food establishment” as found in Section 4205 of the Affordable Care Act to effectively include any business that sells a minimal amount of prepared food, such as bakeries, coffee shops, convenience stores, delicatessens, grocery stores, and superstores. The petition states that Congress intended the final rule to apply to businesses similar to restaurants but not to include any business that sells a small amount of food. For this reason, the petition argues that the final rule is contrary to the text of the Affordable Care Act, is arbitrary and capricious, and violates the Administrative Procedure Act.
  • First Amendment concerns: The petition claims that the final rule raises First Amendment concerns. According to the Petitioners, there is no evidence that consumers are routinely being misled about the nutrition of the foods they consume and thus, it is not entirely clear how the required nutrition information on menus actually prevents consumer deception. Additionally, the petition claims that no substantial government interest is directly advanced through the final rule, as there is ample evidence that shows that calorie labels do not change consumers’ food ordering or consumption behavior.
  • Final rule is inconsistent with new Administration agenda: The petition states that the final rule is the exact type of regulation that the new Administration has opposed or called on agencies to eliminate through Executive Orders and memorandums. The petition argues that the final rule is costly, burdensome, and lacks potential benefits, which is the type of regulation that the new Administration wants to avoid, and therefore, the FDA Commissioner should follow suit.

For now, industry should continue with efforts to comply with the final menu labeling rule, as the effective date, May 5, 2017, is nearing soon. Additionally, as Petitioners acknowledge, their petition has been filed far longer than 30 days after the rule’s finalization in 2014, making it untimely.  However, the Petitioners contend that good cause exists for a waiver based on their reasons outlined above, and given that the new Administration has different FDA goals than the Obama Administration had in 2014, we may see some impact here.  We will continue to monitor developments regarding the final rule and petition.