LOUISVILLE, Ky. - Papa John€™s knows exactly how much the new Patient Protection and Affordable Care Act (PPACA) will cost: 11 cents to 14 cents per pizza, Politico reports. CEO John Schnatter told shareholders during a conference call that the changes would trigger more expenses for the company, which would be passed on to customers.
"Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis," said Schnatter in reference to the employer mandate provision. "We're not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare.
"If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders best interests," he said.
The health-care law also includes a provision that calls for a national, uniform nutrition-disclosure standard for foodservice establishments. Regulations implementing this provision, released in 2011, would create rigid requirements that pose an unreasonable burden on many businesses, particularly convenience stores. The proposed regulations would require chain restaurants, "similar retail food establishments," and vending machines with 20 or more locations to provide specific nutritional information, including calorie-counts on menus, menu boards and drive-thru boards. Self-service items such as buffets and salad bars must contain caloric information "adjacent" to the item. Retailers would have to provide additional nutrition information in writing upon request.
The Common Sense Nutrition Disclosure Act (H.R. 6174), legislation introduced by Rep. John Carter (R-TX) and supported by NACS, codifies a less burdensome approach to menu labeling and includes language addressing the types of retail locations that are covered by federal menu-labeling requirements. Specifically, the legislation limits the provision in Section 4205 of the health-care law to establishments that derive 50% or more of their revenue from food that is intended for immediate consumption or prepared and processed on-site. Prepackaged food would not be considered in this equation.
For those convenience stores that would be covered by federal menu-labeling requirements, the Common Sense Nutrition Disclosure Act provides more flexibility with compliance. Retailers could select from several approaches in providing calorie information. For instance, pizza sellers could provide calories per slice or for the whole pizza. The legislation also would allow retailers more flexibility in providing calorie ranges as opposed to a specific number, which is often more difficult to define with made-to-order food.