New Federal Law Requires Nutrition Disclosure by Restaurants

Date: May 24, 2010

The federal Patient Protection and Affordable Care Act ("Act"), signed into law by President Obama on March 23, 2010, includes a provision that creates a single national nutrition disclosure standard for certain restaurants. The nutrition disclosure provision, which is found in Section 4205 of the Act, amends the federal Food, Drug and Cosmetic Act by requiring chain restaurants and similar retail food establishments with 20 or more locations doing business under the same name and vending machines owned by companies that operate 20 or more machines to provide specific nutrition labeling information.

"Clear and Conspicuous" Nutrition Disclosure

The new law requires that a restaurant or similar retail food establishment must disclose in a "clear and conspicuous manner" the "nutrient content disclosure statement adjacent to the name of the standard menu item..." Thus, covered restaurants -- chain restaurants and similar retail food establishments with 20 or more locations -- must add calorie counts to menus, menu boards, and drive-through menu boards for standard menu items. Under the law the term "menu" or "menu board" means the "primary writing of the restaurant or other similar retail food establishment from which a consumer makes an order selection." For food sold at a salad bar, buffet line, cafeteria line, or similar self-service facility, a restaurant must place adjacent to each food offered a sign that lists calories for each food item or serving.

The law exempts certain foods as specified: items not listed on a menu or menu board (such as condiments or other items placed on the table or counter for general use); daily specials; temporary menu items on the menu for less than 60 days per calendar year; custom orders; or food that is part of a customary market test appearing on a menu for less than 90 days.

The new law provides that covered restaurants must also provide additional nutrition information in writing upon request. This additional information includes the following: calories from fat, total fat, saturated fat, cholesterol, sodium, carbohydrates, sugar, dietary fiber, and protein. Furthermore, such establishments are also required to include a "succinct statement concerning suggested daily caloric intake."

Federal Preemption

The federal standard will replace the differing regulations and laws that an increasing number of cities, counties, and states have enacted to mandate that chain restaurants display calories and other nutrition information on menus. This regulatory hodgepodge confuses the consumer and creates a regulatory compliance nightmare for restaurant chains with locations through the country. The law preempts state or local menu-labeling requirement that are not identical to the federal menu-labeling requirement.

"Reasonable Basis" Compliance Standard

The new law includes a "reasonable basis" standard for operators to use in developing nutrient content disclosures for standard menu items. This standard helps to protect restaurants from unreasonable litigation because it acknowledges that variability occurs in preparation and service of food in restaurants. The law allows restaurant operators to base their nutrient content disclosures on nutrient databases, cookbooks, and laboratory analyses. Therefore, if the information provided is not exact, the restaurant only has to demonstrate that it a reasonable basis for reliance in determining the nutrition information provided.

Compliance Date

Restaurants are not required to comply with the new law until the Food and Drug Administration ("FDA") finalizes the implementing regulations. The law requires the FDA to publish proposed regulations within one year of the law's March 23, 2010 enactment date. Publication of the proposed rule will initiate a public comment period and, subsequently, the adoption of the final rule by the FDA. Thus, the mandate will not become effective until after the FDA finalizes its regulations; therefore, the timetable for compliance with the new law is currently unclear.

Voluntary Compliance

Restaurants with fewer than 20 locations, which are not covered by the new law, may want to voluntarily provide nutrition data. The FDA is required to publish within 120 days (by July 10, 2010) terms by which operators not subject to the federal law may voluntarily provide nutrition data. Thus, non-chain restaurants, as well as chain restaurants before the nutrition disclosure mandate becomes effective, can register with the FDA and meet the mandatory program requirements.