Retailers applaud wins on border tax, menu labeling

Retailers on Thursday were cheering two developments in Washington: A bill providing supermarkets with more flexibility to implement the FDA’s menu labeling rules, and the apparent death of a border adjustment in element to planned revisions of the tax code.

Food retail trade groups Food Marketing Institute (FMI) and the National Grocers Association (NGA) separately on Thursday praised the House Energy and Commerce Committee for advancing the “Common Sense Nutrition Disclosure Act,” which the associations said would clarify the FDA’s final rule on menu labeling.

The labeling rule would require food establishments with 20 or more locations list caloric information on their menus and menu boards. The regulation is currently set to go into effect next May. The groups argued the requirements, originally set for restaurants and expanded to supermarkets, would be costly and complicated to comply with given the differences in format.

FMI said the bill includes “sensible modifications that the supermarket industry has continually requested, such as preserving the ability to sell locally-made and locally-sourced foods, allowing for the use of a central menu board for a salad bar, and providing the ability for corrective actions and liability protections for good-faith compliance efforts.”

Peter J. Larkin, president and CEO of NGA, said the group “applauds the Committee for moving this bill forward and working toward fixes that provide chain supermarkets with the flexibility to continue serving shoppers with local and unique food choices while ensuring consumers receive clear nutritional information.”

In the meantime top Republicans on Thursday in a joint statement said they would drop pursuit of the controversial border-adjustment element of a refined tax code, saying the measure had “too many unknowns.”

“While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform,” the statement, attributed to House Speaker Paul Ryan, R-Wis., Senate Majority Leader Mitch McConnell, R-Ky., Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch, R-Utah, and House Ways and Means Committee Chairman Kevin Brady, R-Texas, said.

That was good news for big-box retailers like Wal-Mart Stores, whose CEO Doug McMillon argued against the bill in Washington earlier this year. The Retail Industry Leaders Association, a trade group that includes Walmart, said the policy would harm consumers by raising prices on imported goods.