See Why the Restaurant Industry’s Political Influence is Growing
In July, the National Restaurant Association launched the “KidsLiveWell” program at 19 major restaurant chains, which will now offer healthier menu items for children — just another move toward developing new nutritional standards in the restaurant industry (NYSE:PBJ).
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Lawmakers are currently working on regulation that would require large chains to post nutritional information on their menus — a regulation the association supports. However, the association has been vocal in its opposition to other health programs it says would hurt the industry. And with a budget of $40 million, a staff of 200 between its Washington and Chicago offices, full-time lobbyists, dieticians, research analysts and media specialists, when the association representing around 400,000 restaurants has something to say, it will be heard.
Over the years, restaurants have emerged as both an integral part of the average America’s life, as well as a significant element of the U.S. economy, with nearly 1 million restaurants in the country employing nearly 13 million people. The average American now gets 5 to 6 meals a week from restaurants. Restaurant sales average $1.7 billion a day, and are expected to surpass $600 billion for the 2011 fiscal year.
With lobbyists promoting the agendas of the association and major restaurant chains, as well as lawmakers who received significant campaign contributions from association and industry leaders, the restaurant industry is become a real political player with a lot of clout. Last year, the industry spent $9.3 million on lobbying, $3 million of which came from the National Restaurant Association, which also contributed almost $800,000 to political candidates. A political action committee set up by McDonald’s (NYSE:MCD) contributed $537,000 to political candidates, while Taco Bell’s (NYSE:YUM) PAC contributed $498,000, and Darden Restaurants (NYSE:DRI) contributed $253,000. Check Out: McDonald’s New Menu to Focus on Healthy Options.
With a relatively young workforce, many temporary employees and non-U.S. citizens, one of the major areas of political concern for the industry deals with labor issues. The restaurant association has lobbied to get everything from debit card swipe fees reduced for merchants, to repealing the estate tax, but the most pressing and prominent issue is that of nutrition regulations.
One of those regulations the association found it was able to support will require restaurants with 20 or more locations to post calorie and nutritional information on their menus, a new standard that will go into effect next year at over 250,000 restaurants nationwide. Many restaurants have been pushing themselves to serve healthier menu items as a result of that new standard, as well as to draw in new customers who might be wary of chains, especially fast-food chains.
But while transparency and healthier food items actually have the potential to help large chains, the association draws the line at proposed new guidelines for marketing to children, which it calls “overly restrictive”. The association also opposes a new requirement under President Obama’s healthcare (NYSE:XLV) law that employers with 50 or more full-time workers offer health benefits to those workers, beginning in 2014. The association’s lobbyists try to shape the implementation of new policies like these in order to minimize their negative impact on the industry.