In this case, it’s the Food Police, whose end is to dictate to the populace what they shall and shall not eat.
One of the items in Obamacare—remember Nancy Pelosi breathlessly stating, “We have to pass the bill in order to see what’s in it”—gave the Food and Drug Administration (FDA) authority to regulate vending machines.
But, first, consider the vending machine business, care of the folks over at the Houston Chronicle:
- The National Automatic Merchandising Association estimates there are ~8k U.S. vending machine businesses, with canned beverages and snacks being the two most common items sold.
- Annual sales for the industry are estimated at $19-$29B annually.
- The income produced by a single vending machine can vary depending on the kind of food being dispensed, and the location of the machine. Single vending machines typically do not earn large amounts of money, person $15+ in monthly income. The average profit of a single vending machine location is $25/month.
- A gumball dispensed from a candy machine may have a cost of $0.03 and be sold for $0.25. Soft drinks from a soda machine might cost $0.30 and be sold for $1.00. In comparison, the gumballs have a higher profit percentage while the soda generates more actual revenue.
Considering the startup costs (several thousands of dollars based upon the machine’s technology and location costs), owning a single vending machine won’t make its owner a millionaire. Not even 100 vending machines.
A new FDA rule requires operators owning 20+ vending machines to include calorie counts on or adjacent to the machines.
The rationale? The new regulations will lower healthcare costs by $7.5B.
How so? By decreasing obesity.
Okay, but based upon what “proof of concept”? The FDA’s rationale has no basis in research, as consumer behavior has not been tested. However, research has demonstrated that displaying calories on menus in restaurants does not affect individual calorie intake. Furthermore, candy bars and snacks already include calorie count labels.
And then there’s this question: Just how much does the average individual consume from vending machines annually? Enough to contribute to obesity?
Once again, the story is about government regulations, increased taxes, and increased costs to consumers. According to the folks over at Economics21:
- expected annual spending on governmental compliance checks is estimated to be $38/year over 20 years, for a total of 400M+ plus; and,
- the cost of implementing the regulation during the first year—retrofitting vending machines with labeling—will be $26M with an annual cost of $24M after the first year for upgrades and relabeling.
The plan for implement this means to control what the population can eat by controlling vending machines? Increase costs to business through hyper-regulation, drive profits down, and terminate the business.
The new dictum from the Food Police: “Thou shalt not eat food from unregulated vending machines.”
Let the discussion begin...
To read the article in the Houston Chronicle, click on the following link:
To read the Economics21 article, click on the following link:
"Obamacare's Vending Machine Power Grab."