New Report: Patchwork of State Food Labeling Laws is a Recipe for Higher Costs for Small Businesses and Consumers

Washington, D.C.—A new report prepared by Carnegie Mellon Adjunct Professor Dr. Lloyd Corder for the Job Creators Network (JCN) explores how a patchwork of state regulations for food labeling could impact the economy. Those effects would extend to supermarkets, product distributors, packaging manufacturers—many of which are small businesses—and, ultimately, consumers.

Specifically, the analysis finds that updating food labels to comply with 50 state-specific mandates will be 26-times more costly for businesses than adhering to one national “Make America Healthy Again” (MAHA) standard.

At the federal level, labeling requirements are largely governed by the Food and Drug Administration (FDA), which enforces regulatory requirements passed by Congress. But many states are considering adopting their own sets of standards for ingredient transparency and labeling.

“The survey results paint a pretty clear picture,” said Dr. Lloyd Corder, an adjunct professor at Carnegie Mellon and the University of Pittsburgh. “A patchwork of state requirements for food labels will create huge financial burdens for businesses big and small—costs that will inevitably roll downhill to consumers in the form of higher prices. If affordability is the goal, a transparent federal ‘MAHA’ standard is the way to go.”

Read the full report here and find key takeaways below:

• The estimated average cost for respondent companies to update their current food labels would be much less expensive if there was one national standard ($14.8 million) versus 50 state-specific standards ($381 million).
• State-specific labeling requirements would raise a host of new operating challenges, such as legal compliance issues (94 percent), more complex packaging and label design (94 percent), package suppliers refusing to do production for smaller volume runs (94 percent) and many others.
• When asked if they would prefer one national standard or 50 state-specific standards, all respondents (100 percent) preferred a national standard for ingredient, nutrition, and front-of-package labeling. None (0 percent) want individual state standards.

“State-specific food labeling regulations—as opposed to a clear, consistent nationwide framework—are well-intentioned but will have an outsized negative impact on small businesses,” said Alfredo Ortiz, CEO of JCN. “Small businesses operate on razor thin budget margins and often don’t have the extra resources to comply with costly government mandates. It means fewer jobs, less economic opportunity, and anemic growth.”

The report relies on survey data collected from 40 companies that manage over 5.5 million packaging labels and more than 300,000 products. Respondents include grocery stores, wholesale distributors, and packaging manufacturers.