How Obamacare ls About to Change the Way You Order a Beer - TheStreet

NEW YORK (MainStreet) – Obamacare is bringing calorie information to a restaurant near you later this year. Craft brewers and their restaurant partners just wish they knew about this earlier.

Section 4205 of the Patient Protection and Affordable Care Act, more commonly known as Obamacare, was signed into law in 2010 and mandated the labeling of caloric content and nutritional information on menu items at chain restaurants with 20 locations by Dec. 1 of this year. Those menu requirements also extends to grocery stores and convenience stores offering prepared food, movie theaters, bowling alleys, ice cream shops, pizza parlors and amusement parks.

Restaurants and brewers alike were under the impression alcoholic beverages including beer and wine would be exempted. As they found out in November, that wasn't the case.

The final rules presented by the Food and Drug Administration were vague, but excluded beers offered for limited runs of less than 60 consecutive days, test items offered for less than 90 consecutive days and beers that are on tap but not on the menu. It also excluded mixed drinks under a “food on display” provision. But it was clear that the caloric content and nutritional values for every size of every brand of beer and wine sold would need to be listed on menus by the FDA's deadline.

While some of that information exists in the Department of Agriculture's Nutrient Database, there's a very strong chance restaurants, brewers and vintners are going to have to dig for some of it themselves through lab testing not mandated by alcohol's current government regulator, the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau. Paul Gatza, director of the Brewers Association craft beer industry group, addressed the ruling at the Craft Brewers Conference in Portland, Ore., last month and said the FDA is expected to provide extra guidance on calorie thresholds, nutrition guidelines and penalties in mid-May, but concerns remain.

“The standard USDA level for beer is 153 calories, which could be misleading if you've got a stronger, higher-calorie beer,” Gatza says. “You're opening yourself up to lawsuits and bad press. The current situation is that we have a bit of a problem here.”

Right now, Gatza says, small brewers don't lab test each batch of beer, and there tends to be some batch-to-batch variation in calorie content and nutritional value. There are 3,418 licensed craft breweries in the U.S., with more than 1,400 of them functioning as food-serving brewpubs. As a result, the Brewers Association is waiting for the FDA to state its tolerances for those batch-to-batch differences, while its restaurant partners go into a holding pattern as they prepare seasonal menus.

CraftWorks Restaurants is based in Broomfield, Colo., and Chattanooga, Tenn., and operates 195 restaurants under the Gordon Biersch, Rock Bottom and Old Chicago brands, as well as a host of specialty restaurants. Its brands brew their own beers at 70 locations and most of its beers aren't on the menu long enough to fall under the FDA's final rule. But it also finds itself waiting for a hand from the FDA.

“We have not done full-blown nutritional testing on our core craft beers to date,” says Rebecca Fischer, general counsel for CraftWorks. “One of our brands [Old Chicago] is in the business of having over 100 selections of beer on site at any time, and that has thrown us into an enormous body of work — and we average more than 30 taps in each of those restaurants, so that work has been ongoing. I think we are trying to stay on hold on that portion of our beverage menu that deals with craft beers that we make.”

Other chains have already begun digging in and tracking down information for their menus. Donna Hood Crecca, senior director of foodservice research and consulting firm Technomic, notes that her company just moderated a panel on the topic in Las Vegas back in March featuring representatives from PF Chang's, Flemings and Marriott. She notes that the USDA's nutrition database doesn't cover most of craft beer's various styles and has left several major chains scrambling.

“Some are in a holding pattern but the larger ones are not — Bloomin’ Brands, Flemings, Marriott, PF Chang’s — as they realize the enormous amount of work necessary to be in compliance by Dec. 1,” she says. “I can’t speak to Craftworks or the timeline necessary to conduct the testing, but operators would do well to at least begin the task of identifying every drink offered and embark on sourcing as much information about it as possible as soon as possible.”

That's putting a whole lot of pressure on the restaurant industry as a whole. The National Restaurant Association lobbied for menu labeling and, according to vice president of food policy Joan McGlockton, sought to “provide uniform nutrition information to consumers from Portland, Maine, to Portland, Ore.” But the group now finds itself working with beer and wine trade associations and member restaurants to make sure everyone gets the information they need and stays in compliance.

“We believe that the Food and Drug Administration has positively addressed the areas of greatest concern with the proposed regulations and is providing the industry with the ability to implement the law in a way that will most benefit consumers, however, we are awaiting clarity from FDA on implementation with respect to alcohol,” McGlockton says. “We prefer a streamlined way to report the information that provides ease of access for consumers and restaurant owners and operators.”

Unfortunately, as Technomic discovered, nobody thought to ask consumers what they felt about this decision aimed squarely at grown, drinking-age adults. According to a Technomic survey, 45% say they don't care about calories when ordering drinks in restaurants and bars. Only 20% say it would affect their drink choice, with 39% of those folks saying they order only one drink as a result, 35% saying they'd order a low-calorie drink or water and 24% knocking it down a serving size. While Gatza isn't necessarily worried about the impact on craft beer all around — noting that drinkers might switch to low-alcohol, lower-calorie session beers instead — he does fear that a complicated menu labeling process may take the choice out of consumers' hands and leave them to brewers or restaurants looking for the simplest answer.

“This could inadvertently drive sales to mixed drinks, which are exempted,” Gatza says. “It could also be a non-consumer reason why more sessionable beers take share and menu placements from beers with unattractive calorie numbers. Menus are going to be changing, and it may not be consumers deciding what's available to them.”

— Written by Jason Notte in Portland, Ore., for MainStreet

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This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.