Type of Submission
Over the period 2006 to 2018 many attempts to institute food labeling in restaurants (FLR) have occurred. We examine the impact of federal FLR regulations on equity in the restaurant industry. We find no support for the idea that passage of federal FLR legislation directly altered firm value. However, Food and Drug Administration (FDA) rulemaking has had a positive effect on restaurants. The Federal rules are preemptory to state and local rules providing the industry with consistent, straightforward, rules across all jurisdictions. The preemptory aspect may reduce overall industry costs of regulation. We suggest that rule-making by the regulatory agency can substantially alter the impact of regulation. Our results indicate that it may be wise for the hospitality industry to work with regulatory bodies, such as the FDA, to obtain regulation that has either a less negative or possibly positive impact on the industry.
Johnson, Mark S.
"Financial Impact of Nutrition Labeling for Restaurants,"
Journal of Hospitality Financial Management: Vol. 30:
2, Article 3.
Available at: https://scholarworks.umass.edu/jhfm/vol30/iss2/3