Free speech, menu labeling, and the $100 cup of coffee

How much would you pay for a cup of coffee? Two dollars? Twenty dollars? How about a hundred?

You’re less likely to buy a cup of coffee if the price jumps from two dollars to twenty. Your chances of purchasing the beverage are even lower if the price skyrockets to a hundred dollars. This is basic economics: as the price rises, demand drops.

The concept works for plans as well as purchases. You’re less likely to go fishing if you have to pay hundreds of dollars in registration fees; you’re more likely to go skiing if you already have the equipment. When Brazil wanted to encourage tourism from America, it waived the $160 visa fee for American tourists. And if you want to go to the gym more often, you’d do best to pick one that’s close to home.

That’s why the FDA’s menu labeling law actually makes it harder for restaurants to offer healthier options. Every time a restaurant wants to offer a new, healthier option, it must pay thousands of dollars — first to a lab to test the food, then to a printing company to print new menus.

Large conglomerates may be able to bear these costs, but what about small businesses? Mom-and-pop shops that are interested in switching to healthier options may no longer be able to do so after the menu labeling law goes into effect next May.

In an ironic twist, the FDA’s health law might actually decrease the number of healthy offerings in restaurants. That irony is not lost on the First Amendment. Laws that compel speech must, at a minimum, directly advance a substantial governmental interest. The FDA says that it’s promoting healthy eating with its menu labeling law. But that’s like trying to promote coffee sales by raising the price of coffee.

3 thoughts on “Free speech, menu labeling, and the $100 cup of coffee

  1. Good piece. But I am not sure why you reference the costs in printing a new menu (quite literally the menu costs). A restaurant has to incur that cost regardless of the FDA.

    Also, how does the FDA proposal work? It seems like it would also make it equally as hard for a restaurant to add new unhealthy options.

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  2. It’s true that restaurants would have to incur the same costs if it added new options that were more caloric, but most restaurants these days are trending toward healthier options. That’s not surprising. Lots of consumers are more conscious about a good diet these days, and one would expect the market to find ways to satisfy demand.

    [Edit: this comment previously discussed menu items of the day and asked whether they would need to be labeled under the proposed rule. The proposed rule contains a temporary item exception for certain seasonal items. That changes little for the First Amendment analysis, however, as the menu labeling rule fails to serve any legitimate governmental interest.]

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