34 Million Different Pizzas

by Elaine Schwartz    •    May 5, 2011    •    656 Views

Expressing concern about a proposed FDA calorie-posting rule, Domino’s says it would have to list 34 million different kinds of pizzas. Really.

This Bloomberg video explains their position. Using Domino’s “Cal-O-Meter” as a source, they show an image of a plain cheese 14″ pizza (2,320 calories) that is accompanied by a yellow “sausage” arrow (480 calories) and a gray Mushroom arrow (40 calories). You get the picture. Peppers? Pineapple? Onions? Veggies? There are a lot of possibilities.

The Food and Drug Administration’s (FDA) proposed mandate applies to restaurants, bakeries, coffee shops, grocery stores, and convenience stores that are chains. Defining a chain as 20 stores or more, the FDA has not yet implemented its rule. Vending machines are included but not movie theaters and airlines.

The Economic Lesson

The menu-labeling rule was mandated by The Affordable Care Act that was passed during March 2010.  Assessing its wisdom, you could use an opportunity cost approach. The opportunity cost of a decision is the alternative that you rejected. (Choosing is refusing.) Just decide what alternative choice you are sacrificing and then list the benefits of that alternative that you would forgo. Is your choice worth the sacrifice?

An Economic Question: Using cost/benefit analysis as your approach, with which of the following do you agree?

a. This article in the Sacramento Examiner says the FDA has not gone far enough. They believe ingredients should also be listed.

b. The FDA has gone too far. The new rule will negatively affect corporate productivity.

If you would like to submit an opinion to the FDA, go to regulations.gov.


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