Regulation and Chain Retail

Friday, July 17th, 2009

Matthew Yglesias wants to make menu labeling mandatory at all restaurants, not just chains. Conor Freidersdorf explains how that will benefit big restaurant chains, and kill variety and innovation at one-off shops and mom-n-pop spots.

This is the same lesson Yglesias and Ezra Klein failed to learn from Walmart signing on to the employer health care mandate. The behemoth companies love regulation, because the compliance costs tend to kill off upstarts and smaller competitors.

It’s only a matter of time before we’re going to see one or more big restaurant chains join the menu labeling crusade. In fact, I’m surprised we haven’t seen it already. It makes good business sense. A federal law seems inevitable now. Jump on board early, and you’ll have a say in how the regulations are written–specifically, exactly who will be required to abide by it.

It’s amusing how the people who so eagerly embrace heavy-handed regulation tend to be the same people who decry the Gap-ification of America. They don’t seem to realize the connection between the two.

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24 Responses to “Regulation and Chain Retail”

  1. #1 |  Chet | 

    It’s not difficult to estimate nutritional information for food – the government will calculate it for you for free, on a website, based on the ingredients. It’s not going to “kill off” anybody.

  2. #2 |  Mister DNA | 

    It’s amusing how the people who so eagerly embrace heavy-handed regulation tend to be the same people who decry the Gap-ification of America. They don’t seem to realize the connection between the two.

    Several years ago, I watched the documentary The Corporation. There was a scene in which some Nanny State Leftist was addressing a city council (in California, of course) in support of a law restricting new chain restaurants from opening within the city limits.

    While arguing for The State to pass a law limiting people’s eating choices, he actually said, “If we don’t do something now, pretty soon The State will be telling us where we can and can not eat”.

  3. #3 |  Dave Krueger | 

    Of course, these laws play into the hands of the big chains.

    But, not to worry. When the smaller restaurants start going out of business, government can always fix it with new legislation that grants some favors to the little guys.

  4. #4 |  Dave Krueger | 

    “for free”

    LOL!

  5. #5 |  Lior | 

    Chet: McDonald’s serves the same food every day all day. They change suppliers once every few years. The nutritional content is fixed; it was optimized to death. They can label their menus with ease.

    Mom and Pop’s local brasserie serves different foods every day. They don’t make the soup of the day by looking up a table issued at headquarters — they make it based on what is fresh and in season today. You think they measure exactly how much potatoes per serving went into the soup?

  6. #6 |  John Markley | 

    I’m sure your average liberal man on the street would be dismayed by the true effects of the measures he supports, but I no longer believe that the Klein’s and Yglesias’ of the world are acting out of ignorance; they just don’t give a damn one way or the other. American liberalism is not about expanding government power to help the needy or combat exploitation by big business, it is about exploiting fear of big business and sympathy for the needy to build up government power. The groups liberal intellectuals always invoke- mom and pop shopkeepers, oppressed minorities, struggling workers, The Children- are mere stage props, displayed for the audience during the show and then thrown in the trash when no longer useful.

  7. #7 |  Currence | 

    At the risk of exposing my own naïveté, I don’t see any reason to suppose that the Kleins and Yglesiases don’t give a damn one way or the other. I think that they are (so far) unpersuaded of the point, and the broader principle it reflects, that Radley makes above. They are vulgar liberals, in Kevin Carson’s sense of the term; it’s extremely difficult for them to break free from the idea that Big Government and Big Business (as it actually exists, not as it might) are not enemies, and that almost any increase in government power, however well-intentioned, will almost necessarily be co-opted by the other powers at be (economic) and used as a weapon against their competitors, their employees, and their customers (to the extent that it doesn’t hurt their bottom line; granted, I’m here assuming that customers, like all people, often don’t know their own interests — many libertarians are hesitant to concede this because they think that it implies we ought to have a nanny state, though it doesn’t).

    One reason for the difficulty is that breaking free requires recognizing a very sad fact: almost no one with a large amount of power (economic or political) wants to use it for the increased freedom and well-being of others. It requires realizing that our institutions are broken, do not reflect the will (or interests) of the people, and cannot be made to do so, at least not through any coercive short-cut like increased regulation, etc. The solution is to try to persuade and educate a people who almost invariably do not have the desire, time, or energy to be persuaded or educated. But when was doing anything worthwhile easy?

    Or so I hope. John (#6) might be right, but I’d like to think that at least some liberals aren’t beyond being persuaded that liberty and prosperity are complements, not substitutes. If I’m wrong, and the big name liberals are either arguing in bad faith or are so entrenched in ‘government good, private power bad’ thinking as to be beyond persuasion, then it doesn’t matter anyways.

  8. #8 |  Chance | 

    “You think they measure exactly how much potatoes per serving went into the soup?”

    Yes. It’s called a recipe. Everyone from homemakers to chains to 3 star chefs to street vendors use them. If they are just making up the recipe as they go along, they are probably making crap, and were going out of business anyway.

  9. #9 |  Muffy | 

    In NYC, where this rule was created, mom and pop businesses were exempted from the rule. It only applied to chains with 15 or more locations. So no small shops are going to go out of business as a result of calorie counter requirements.

    I’m not a big fan of the rule (when I go out to eat, and I don’t go often, I want to EAT!! and not worry about how big my ass is getting) but I’d rather focus on real reasons to oppose them, rather than imaginary ones.

  10. #10 |  freedomfan | 

    Chance:

    If they are just making up the recipe as they go along, they are probably making crap, and were going out of business anyway.

    What utter nonsense. Lots of restaurants have talented chefs who can make delicious meals without following a recipe. It’s too bad that you assume the technique that a fucking robot would use to make good food also must apply to experienced people with actual culinary skills.

    This sort of rule will definitely hurt creativity and innovation in the restaurant business. The chefs will have to follow a strict recipe, lest they be fined/sued/relieved of their license when some busybody or competitor (in case anyone forgets how these regulations are used a blunt instrument) takes a meal to a lab (or whatever the process is) to show that the nutrition content deviated from the listed information by more than some arbitrarily determined amount.

    BTW, do the “mandated labeling is no big deal” people even cook? If so, they should be aware that not everything listed in the recipe ends up on the plate. In addition to obvious things such as recipes for sauces and creams which aren’t all used on a given dish (the leftover may be saved for a completely different item or just disposed of) and plain old “stuff left in the pan”, there is also draining, straining, and adjusting for ingredients like meats and vegetables that don’t always have the same flavor, moisture, consistency, etc.

    In addition, it’s a pain to create new and unique meals when you not only have to determine exactly what went into it, but you also have to publish it and keep records of it. Some restaurants have a different menu every night and new and unique dished depending on chef innovation and opportunities to cook with interesting ingredients that aren’t always available. They will have to determine, publish, and keep track of the nutritional information for every dish they’ve ever made, even ones they only make once.

    All that extra bookkeeping and and the risk associated with messing it up is an obvious disincentive to innovate.

    I’m sorry, but, even aside from my legitimate opposition to nanny statism, I have to laugh at the ignorance of those who cluelessly argue that this is some sort of trivial requirement that will have no impact on restaurants. I wish well-intended thugs like Matthew Yglesias would keep their “soft paternalist” boots off our throat.

  11. #11 |  freedomfan | 

    BTW, I am not saying that good cooks don’t use recipes, because they obviously do. But recipes serve primarily as a tool for repetition. Lots of innovation starts without a recipe, or with intentional deviation from one.

  12. #12 |  sonicyouth | 

    The New York law exempts non-chains. Having lived with the law for several months now, I do not see the problem, given that the mom and Pop shops do not have to be subjected to it. If you include the carve-out for non-chains, beyond the conceptual objection to having this rule, what are the practical implcations? Alot of the comments here seem to completely ignore that you can exempt certain restaurants from the law.

  13. #13 |  Mattocracy | 

    How will they actually enforce this law? Can’t people…just lie? Will the Feds send out inspectors to every restaurant in America? Hmm…yeah this is a god awful idea.

  14. #14 |  JohnJ | 

    Slavery is freedom!

    /Orwell

  15. #15 |  supercat | 

    While I can see some benefit to having a certain amount of information be made available to diners, it is not reasonable to expect that every meal will always be prepared exactly the same. If a customer orders a baked potato and all of the potatoes the restaurant has on hand weigh slightly more or less than the one on the nutrition sheet, should the restaurant cut off a little bit from an oversize potato, or give a small piece of potato on the side if the main one was undersized? If a restaurant has enough of a foodstuff for 1.25 portions, should it not be allowed to give the next customer to order it a slightly-oversized portion?

    IMHO, the proper way to handle things would be for there to be a means by which a restaurant can opt to certify certain nutritional information, and allow customers to explicitly ask for precise nutritionally-measured meals. The restaurant should only accept such a request if it can comply; otherwise it should inform the customer, and allow the customer to ask for something else or dine elsewhere.

  16. #16 |  cliff | 

    >>>>>>It’s not difficult to estimate nutritional information for food – the government will calculate it for you for free, on a website, based on the ingredients. It’s not going to “kill off” anybody<<<<<<

    Is the government going to print new menus and create nutritional displays for them….for free?

    Also, did you even read the article? His point was that the small establishments cannot deal with the cumulative effect of a bunch of small, petty regulations the same way the larger guys can. He was not saying this one regulation would destroy them all. Get a grip.

  17. #17 |  Steve Verdon | 

    I’ve said it on here before Yglesias is an economic tool. He’s knowledge of the subject is about as deep and wide as a thimble. Klein is too, but he’s been off my radar for awhile. Sadly since he has popped back up the guy has managed to land a gig as an economic correspondent at the Washington Post. Go figure.

    The bottomline is that both of these tools are statists. Enhancing the power of the state is good so long as there is a good man or good men in power. These nitwits learned nothing from 2001 – 2008, which is pretty shocking given their rather dim views of President Bush and the Republicans.

  18. #18 |  John Markley | 

    Currence,

    There’s a pattern of behavior that goes beyond this particular issue. Is it plausible that a person who is genuinely motivated by liberalism’s ostensible goals, is well-educated, intelligent, and has made thinking about political and economic issues their profession could still get some things badly wrong? Sure. It gets suspicious, however, when someone almost always gets it wrong, and invariably gets it wrong in a way that just happens to increase government power. It gets more suspicious when the person in question is part of the group- highly educated, articulate intellectuals with a technocratic bent- that would be among the biggest beneficiaries of such an expansion in government power.

  19. #19 |  Ernest Brown | 

    “Yes. It’s called a recipe.”

    Yep, Chance, go into any restaurant and see how many cookbooks are propped up in front of the cooking staff.

    Even a gonzo liberal chef like Tony Bourdain would look at you as if you just argued that bathing babies in the warm spit of leprosy victims was a good idea.

  20. #20 |  Fluffy | 

    In NYC, where this rule was created, mom and pop businesses were exempted from the rule. It only applied to chains with 15 or more locations. So no small shops are going to go out of business as a result of calorie counter requirements.

    This post is not about the rule as currently written, but about Yglesias’ statement that the rule should apply to ALL restaurants.

    That makes it appropriate to discuss the implications of applying the rule to all restaurants.

  21. #21 |  Ernest Brown | 

    “That makes it appropriate to discuss the implications of applying the rule to all restaurants.”

    It also makes it appropriate to discuss the principles behind applying it -anywhere.- This nanny state fatuity is a prime example of what happens when you make ANY concession to these filth-bats that doesn’t involve banning force or fraud.

    The mouth vomit that these frauds spew about “mom-and-pop” businesses is beyond laughable in its utter lying hypocrisy. Such small business organizations are petit bourgeois in their twisted minds (see the way Boxer treated the head of the Black Chamber of Commerce, for example) and deserving of utter scorn precisely
    BECAUSE they require basic economic freedom and the rule of law to flourish, in addition to promoting ethical behavior and genuine community spirit outside the purview of a government jackboot.

  22. #22 |  Ken | 

    f you include the carve-out for non-chains, beyond the conceptual objection to having this rule, what are the practical implcations? Alot of the comments here seem to completely ignore that you can exempt certain restaurants from the law.

    Principles, sonicyouth. They aren’t just for breakfast any more.

  23. #23 |  Tom | 

    Even if the initial law exempts the mom-and-pop shops, we all know what will happen in a few years. Someone (probably a McD’s employee) will be horrified to find that some place serves a burger with 2200 calories instead of only 250 from a BigMac and that that place gets lots of customers. We’ll have a repeat of the grandstanding we have now and a new law which will include the small shops.

    This has happened with every other expansion of big government. There’s no reason to think it won’t happen with this.

  24. #24 |  The Agitator » Blog Archive » Menu Labeling and Rent Seeking | 

    [...] A little over two weeks ago, I wrote: [...]

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