14 Million Hours Needed to Comply with Vending Machine Regulation

by Amanda Griffin-Johnson Long before the health care legislation passed, there were concerns about the number of jobs it would destroy and the state budgets it would bust. Now that it has been signed into law, unintended consequences from the bill continue to come to light. Earlier this month, the U.S. Food and Drug Administration (FDA) released estimates that it...

by Amanda Griffin-Johnson

Long before the health care legislation passed, there were concerns about the number of jobs it would destroy and the state budgets it would bust. Now that it has been signed into law, unintended consequences from the bill continue to come to light. Earlier this month, the U.S. Food and Drug Administration (FDA) released estimates that it would take over 14 million hours each year for chain restaurants and vending machine operators to comply with a single regulation in the health care bill. The regulation requires that “companies with 20 or more restaurants or vending machines must disclose nutrition content for standard menu items.” Vending machines specifically “shall 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.” CSN News reports:

In the Nov. 5 edition of the Federal Register, 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” in conjunction with the regulation.

The recordkeeping element includes recording and keeping track of the calorie content of each item offered in a vending machine, while the vast majority of the time will be spent on third party disclosure — actually communicating that content to the consumer.

The FDA says that time will have to be invested again each year, as the labels will likely “have a relatively short life and the mix of product in a machine will change over time.”

Ned Monroe, the senior vice president of government affairs for the National Automatic Merchandising Association (NAMA), called the required time investment “absurd” and “unfair.”

“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,” he said. “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.”
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“Because there is wide variation in the kinds of vending machines used–in materials, display, mechanism–there will likely be a variety of solutions,” the FDA writes. “On the high end, a calorie display that is integrated with the graphics on the machine may cost several hundred dollars or more. On the low end, a set of calorie stickers affixed to the front of the machine would cost at most a few dollars per machine.

“Given the low margins in the vending machine industry, and given that nearly all of the regulated operators will be small businesses, FDA believes that almost all operators will, at least initially, choose the sticker option. In the long run, the manufacturers of vending machines, and the larger vending machine operators, such as the soft drink companies, may use the more integrated, and thus expensive, solution.”

This largely redundant regulation (packaging for snacks already contains nutritional information) may be aimed at giving consumers more information, but it is fails to take into account the cost of giving consumers that level of information. Using of the federal minimum wage rate ($7.25), a conservative estimate of the cost of this regulation to the vending machine industry comes to over $100 million each year. It’s not hard to imagine that small businesses will find it difficult to afford the cost of compliance. You can read the full CSN News article here.