Regulatory Scoring
Agency:
FDA
Rule title:
Food Labeling; Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food
RIN
0910–AG57 RIA Separate? Yes
Stage Publication Date
Proposed rule 4/6/2011
Rule summary:
To implement the menu labeling provisions of the Patient Protection and Affordable Care Act of 2010
(Affordable Care Act), the FDA is proposing requirements for providing certain nutrition information for
standard menu items in certain chain restaurants and similar retail food establishments. The Affordable Care
Act, in part, amended the Federal Food, Drug, and Cosmetic Act (FD&C Act), among other things, to require
restaurants and similar retail food establishments that are part of a chain with 20 or more locations doing
business under the same name and offering for sale substantially the same menu items to provide calorie and
other nutrition information for standard menu items, including food on display and self-service food.
Openness Score Comments
1. How easily were the RIA, the proposed rule, and any supplementary
materials found online? 5 1A
2. How verifiable are the data used in the analysis? 3 1B
3. How verifiable are the models and assumptions used in the analysis? 2 1C
4. Was the Regulatory Impact Analysis comprehensible to an informed
layperson? 4 1D
Total Openness (Sum of 1-4) 14
Analysis Score Comments
5. How well does the analysis identify the desired outcomes and demonstrate
that the regulation will achieve them? 3 2A
6. How well does the analysis identify and demonstrate the existence of a
market failure or other systemic problem the regulation is supposed to solve? 2 2B
7. How well does the analysis assess the effectiveness of alternative
approaches? 2 2C
8. How well does the analysis assess costs and benefits? 2 2D
Total Analysis (Sum of 5-8) 9
Use Score Comments
9. Does the proposed rule or the RIA present evidence that the agency used
the Regulatory Impact Analysis? 1 3A
10. Did the agency maximize net benefits or explain why it chose another
alternative? 2 3B
11. Does the proposed rule establish measures and goals that can be used
to track the regulation’s results in the future? 1 3C
12. Did the agency indicate what data it will use to assess the regulation’s
performance in the future and establish provisions for doing so? 1 3D
Total Use (Sum of 9-12) 5
Total Score 28
Openness
Criterion Score Com. No. Comment
The agency's website and
1. How easily were the RIA , regulation.gov both contain direct links
to the proposed rule and the RIA, both
the proposed rule, and any of which can be found through a
supplementary materials keyword search of the regulation's
found online? 5 1 title.
RIA displays few summary tables and
raw data is rarely shown or displayed.
General data sources are mostly listed
2. How verifiable are the data but not clearly sourced for specific
used in the analysis? 3 2 use.
Fairly clear, but despite FDA's
acknowledgement of little available
evidence on how the proposed rule
might affect consumption choices,
3. How verifiable are the there is little discussion of how
models and assumptions assumptions or alternatives were
used in the analysis? 2 3 chosen.
Analysis could be easily followed by
4. Was the analysis an interested layperson with few
comprehensible to an abbreviations and little jargon. Much of
informed layperson? 4 4 the analysis was clear.
Analysis
Score Com. No. Comment
5. How well does the
analysis identify the desired
outcomes and demonstrate
that the regulation will
achieve them? 3
Primary risk factors for overweight and obesity are
overconsumption of calories and physical inactivity.
Excess body weight has many health, social,
psychological, and economic consequences for
affected individuals. FDA uses Quality Adjusted
Life Years (QALYs) to measure loss of well-being
individual suffers due to obesity. But FDA notes
estimates used for annual lost QALYs of all obese
adults are not estimates of benefits of the proposed
Does the analysis clearly
requirements. Such estimates (and not examined
identify ultimate outcomes in RIA) would include lower medical costs and
that affect citizens’ quality of higher productivity brought on by lower obesity
life? 4 5A prevalence and of co-morbidities.
Instead of estimating the reductions in obesity or
medical costs and the increase in QALYs, FDA
conducted a breakeven analysis that determined
what proportion of the U.S. obese adult population
would need to attain a "minimal response" (100-
calorie per week reduction per individual) from the
proposed rule in order to yield a positive net
benefit. FDA estimates that at least 0.06 percent of
Does the analysis identify the adult obese population would need to reach at
how these outcomes are to least this benchmark in order for the rule to break
be measured? 3 5B even on the primary mean annualized cost.
Theory is that providing calorie and other nutrition
information in restaurants and similar retail food
Does the analysis provide a establishments would assist consumers in making
healthier dietary choices. It is believed proposed
coherent and testable theory
rule will help consumers limit excess calorie intake
showing how the regulation and understand how the foods purchased at these
will produce the desired establishments fit within their daily caloric and other
outcomes? 4 5C nutritional needs.
FDA is unaware of any comprehensive data
allowing accurate predictions of the effect of the
proposed requirements on consumer choice and
establishment menus. The primary empirical
evidence given by FDA is that restaurant food and
restaurant-type food form a significant and
increasing part of U.S. diets. These foods are often
relatively high in calories, fat and portion size, and
lower in fiber and other essential nutrients. The
proportion of total food expenditure spent on food
offered for sale by such establishments increased
from 34% during the 1970s up to approximately
50% through 2009. So empirical support is that
Does the analysis present proposed regulation will direct consumers to
credible empirical support for healthier food choices in an industry that has been
the theory? 2 5D providing more of their food choices.
FDA notes that any reduction in calorie intake from
proposed rule may be at least partially offset by
increases in calorie intake during other meals or
snacks as has been demonstrated in the contexts
of menu labeling and other attempts to modify food
choices. FDA admits there is available evidence of
substitution of one calorie source for another in the
context of menu labeling. This casts some degree
of uncertainty on the hypothesized benefits of the
proposed rule. To partially compensate, FDA
constructs a "plausible" individual effect of a 100-
Does the analysis
calorie per week reduction for individuals that is
adequately assess used to estimate a breakeven point that would
uncertainty about the meet a minimal response yielding a positive net
outcomes? 1 5E benefit.
6. How well does the
analysis identify and
demonstrate the existence of
a market failure or other
systemic problem the
regulation is supposed to
solve? 2
FDA acknowledges the market for restaurant-type
foods is highly competitive and this fact might
suggest many consumers would be willing to pay
for and discriminate based on availability of
nutrition information and thus the industry would
provide it. Indeed, they discuss evidence that many
retail food establishments do provide nutrition
information through brochures and/or the Internet.
However, mandating disclosure requirements is
believed to be justified due to an absence of
sufficient nutritional information produced by an
inadequate incentive for restaurants to produce it
on their own. Primary blame for the ensuing market
failure is placed on consumer demand because of
systematic biases in how consumers weigh current
or immediate benefits (from eating more, or higher
calorie, foods) against future or long-term costs
(higher probability of obesity and its co-
morbidities). These biases are argued to work
against an efficient provision of nutrition
Does the analysis identify a information for food. However, FDA ignores that
market failure or other failure of some individuals to process information
systemic problem? 3 6A rationally is not synomous with market failure.
FDA cites studies suggesting that one problem
arises because food decisions are made so often,
and the marginal effect of any one meal on future
obesity is small, and so cumulative costs of a large
number of relevant decisions may be neglected.
Studies suggest some consumers will not demand
calorie information, because the issue of calories
often lacks salience, or relevance, at the time of
purchase and consumption, even though they may
experience future regret. FDA also argues
establishments have costs of providing nutrition
information, including opportunity costs of limited
time and space, and that providing calorie
information may exert unintended effects on profits.
Thus costs and the uncertain reception of
displayed calorie information lead most
establishments to not display this information.
Does the analysis outline a Surprisingly, FDA does not distinguish between the
coherent and testable theory obese and non-obese in their discussion nor do
they delve deeper into why some establishments
that explains why the
apparently volunteer more nutrition information
problem (associated with the than others and whether it is likely that the market
outcome above) is systemic will provide more such information in the future on
rather than anecdotal? 2 6B its own.
FDA hypothesizes that providing more nutrition
information will likely promote more informed
choice and also likely raise consumer awareness
regarding the number of calories in foods thus
raising awareness of potential future costs of
additional calorie consumption. But FDA
acknowledges that it is unaware of any
comprehensive data allowing accurate predictions
of the effect of the proposed requirements on
Does the analysis present consumer choice and establishment menus. This
credible empirical support for acknowledgement suggests weak empirical
the theory? 1 6C support.
FDA does not present much evidence supporting
the hypothesis that consumers suffer from time-
preference bias or that proposed rule will reduce
caloric intake. FDA ignores whether proposed rules
will differentially affect behavior of obese and non-
obese customers. Moreover, the proposed rule
applies to chain retail food establishments (defined
as those part of chain with 20 or more locations
Does the analysis doing business under the same name and offering
for sale substantially the same menu items) but
adequately assess
does not discuss whether consumers at these
uncertainty about the establishments are subject to different (in nature or
existence or size of the extent) market failures than those the rule does not
problem? 1 6D regulate.
7. How well does the
analysis assess the
effectiveness of alternative
approaches? 2
Four options: (1) covers all establishments in
proposed rule with the exception that grocery and
convenience stores would not be subject to the
proposed requirements; (2) scope of proposed rule
broadened to include a wide variety of
establishments that serve restaurant or restaurant-
type food; (3) effective date starting three months
after publication of the final rule instead of six
Does the analysis enumerate months; and (4) effective date starting 12 months
other alternatives to address after publication of the final rule instead of six
the problem? 4 7A months.
Is the range of alternatives
considered narrow (e.g.,
some exemptions to a
regulation) or broad (e.g.,
performance-based
regulation vs. command and
control, market mechanisms,
nonbinding guidance,
Narrow range of alternative options and all based
information disclosure,
on government regulation. No mention of taxing
addressing any government high calorie food, bans, subsidies, information
failures that caused the campaigns, or other commonly considered
original problem)? 2 7B government interventions.
Does the analysis evaluate
how alternative approaches Only estimated annualized compliance costs for
would affect the amount of each option are presented. Compliance is
the outcome achieved? 1 7C assumed to be perfect.
Does the analysis Baseline is no new regulation and does not
adequately address the address what the state of the world would likely be
baseline? That is, what the in the absence of this regulation. There is little
discussion of how consumers and sellers would
state of the world is likely to
behave in the future and in the absence of the
be in the absence of federal proposed regulation, despite FDA acknowledging
intervention not just now but that firms appear to be increasingly providing
in the future? 1 7D nutritional information.
8. How well does the
analysis assess costs and
benefits? 2
Does the analysis identify
and quantify incremental High, low, and median estimates (with 3% and 7%
costs of all alternatives discount rates) of costs are provided for
considered? 4 8A alternatives.
Three costs are identified (1) collecting and
managing records of nutritional analysis for each
standard menu item; (2) revising or replacing
existing menus, menu boards, and other affected
displays; and (3) training employees to understand
nutrition information to help ensure compliance
with the proposed requirements. FDA states that,
although it is likely the proposed rule will cause
firms to reformulate food and menu items, these
Does the analysis identify all costs are not estimated. However, FDA does
expenditures likely to arise include costs associated with analyzing nutritional
as a result of the regulation? 3 8B content of new or reformulated items.
FDA acknowledges costs of proposed rule are
borne by both consumers and firms: prices rise to
reflect new costs, but generally not by enough to
Does the analysis identify
completely offset them. FDA does not estimate or
how the regulation would explore likely price hikes, or whether some foods
likely affect the prices of (and thus consumers) might rise (or fall) more than
goods and services? 1 8C others.
FDA hypothesizes price increases are likely to
Does the analysis examine cause consumption of affected foods to fall, further
reducing profits for some, or all, of these
costs that stem from
establishments. Consumers would need to pay
changes in human behavior more for this food, requiring some reduction in
as consumers and producers valued consumption. These effects are not
respond to the regulation? 1 8D estimated or explored.
High, mean, and low estimates of costs of
proposed rule are provided using 3% or 7%
discount rates. Little discussion of the uncertainty
surrounding theory or previous empirical analysis
finds its way to analysis of the rule. FDA
acknowledges some establishments may respond
to increased consumer interest on caloric content
by reformulating existing menu items or by
introducing new, lower calorie items. Such costs
are not included by FDA, but they request
If costs are uncertain, does
comment and data on whether the proposed
the analysis present a range requirements will accelerate the rate of new item
of estimates and/or perform introduction and how the cost of these items may
a sensitivity analysis? 2 8E be affected by the proposed requirements.
FDA conducted a breakeven analysis to determine
proportion of obese adult population needed to
attain minimal response in order for proposed rule
to yield a positive net benefit. However, FDA
admits it does not directly estimate benefits and
Does the analysis identify thus does not clearly measure net benefits, nor
the alternative that does it present analysis of net benefits for the four
maximizes net benefits? 3 8F options.
FDA presents a breakeven analysis that is
suggestive of cost-effectiveness analysis. Perfect
compliance is implicitly assumed. Costs are
estimated for alternatives, but costs are very
Does the analysis identify insensitive to different alternatives (and minor in
the cost-effectiveness of comparison to costs of obesity) and so breakevens
each alternative considered? 3 8G are essentially the same.
Various costs are estimated but there is little
discussion of who bears burdens, whether these
burdens are higher on different parties (obese vs.
Does the analysis identify all
non-obese, large vs. small establishments, children
parties who would bear costs vs. adults, by location, by type of food served, etc.)
and assess the incidence of Enforcement costs by government are not
costs? 1 8H discussed.
Benefits are assessed for the adult obese
population, but not for obese children even though
Does the analysis identify all
FDA states that about 31% of those aged 2-19 are
parties who would receive overweight or obese. No benefits are assessed for
benefits and assess the the overweight, but not obese adult population with
incidence of benefits? 1 8I BMI of 25-29.9.
Use
Criterion Score Com. No. Comment
FDA provides a breakeven cost point, but options
are highly correlated to the rule FDA proposes.
RIA does not attempt to tailor rule to information
9. Does the proposed rule or
provided or developed. FDA asks for comments
the RIA present evidence about the data and the methods used for
that the agency used the estimating the regulatory impact of the proposed
analysis? 1 9 rule.
FDA does not directly assess benefits. FDA
estimates the percent of the adult obese
10. Did the agency maximize population that would need to reduce caloric
net benefits or explain why it intake by at least 100-calories per week for a
chose another alternative? 2 10 breakeven point on annualized costs.
FDA does not directly assess benefits of its
proposed rule due to many acknowledged
complications. Estimates the percent (0.06%) of
the adult obese population that would need to
reduce caloric intake by at least 100-calories per
11. Does the proposed rule week for a breakeven point on annualized costs.
However, obesity is also caused by factors that
establish measures and
lie outside the domain of this proposed regulation
goals that can be used to and, therefore, it is not clear how the independent
track the regulation's results impact of this regulation on obesity can be clearly
in the future? 1 11 estimated in the future.
12. Did the agency indicate
what data it will use to
FDA made no commitment to goals or measures.
assess the regulation's
FDA does not directly assess this issue, though
performance in the future RIA indicates access to relevant data that could
and establish provisions for be used to assess regulation's future
doing so? 1 12 performance.
Rule Title RIN Agency Pub Date RIA separate? Total (G+H+J) Openness
0910–AG57 FDA 4/6/2011 Yes 28 14
Food Labeling; Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments
Analysis Quality (G+H) Use 1 2 3 45
9 23 5 5 3 2 4 3
5A 5B 5C 5D 5E 6 6A 6B 6C
4 3 4 2 1 2 3 2 1
6D 7 7A 7B 7C 7D 8 8A 8B
1 2 4 2 1 1 2 4 3
8C 8D 8E 8F 8G 8H 8I 9 10
1 1 2 3 3 1 1 1 2
11 12
1 1