A report recently published by a Canadian advocacy group, the Centre for Science in the Public Interest (“CSPI”), titled Writing on the Wall: Time to Put Nutrition Information on Restaurant Menus, has taken on the highly debated issue of restaurant menu calorie disclosure, advocating the listing of calorie counts and sodium levels next to every menu item.

The report points out that although disclosure of nutritional information including calories and 13 nutrients has been required by legislation in Canada on all pre-packaged foods since 2005, restaurant menus are not covered by the legislation and rarely provide nutritional information. The CSPI report notes that restaurant foods comprise at least one-fifth of the average Canadian’s daily diet and states that menu labelling would help health-conscious consumers make healthier meal choices and would encourage restaurants to provide healthier menu options.

The CSPI report recommends legislation:

  1. requiring chain restaurants to disclose on menus and menu boards next to each food item the number of calories along with symbols flagging foods with high levels of sodium;  
  2. requiring that all chain restaurants provide free brochures that disclose all of the nutritional information required on the labels of pre-packaged goods, including calories, saturated fat and trans fat;  
  3. exempting small restaurant operations (chains with less than $10 million in annual sales or less than 10 locations) and short-term menu items (those offered for less than 31 days per year); and  
  4. requiring chain restaurants to provide and continuously update complete nutrition and ingredient information posted on a publicly accessible government database.

The CSPI report may have had an impact as a private member’s bill was introduced in the Ontario legislature on May 8, 2012. Bill 86, the Healthy Decisions for Healthy Eating Act, 2012, would require all persons who own or operate a food service premise that is part of a chain with a minimum of 5 locations and gross annual revenue of over $5 million to:

  1. display the number of calories contained in the food and drink items sold or served for immediate consumption;  
  2. make available brochures that provide nutritional information for the food and drink items sold or served for immediate consumption; and  
  3. indicate high sodium content of food and drink items sold or served for immediate consumption.

The bill makes it an offence to contravene these requirements and imposes fines of up to $500 per day on which the offence occurs or continues for first offences and up to $5000 per day on which the offence occurs or continues for subsequent offences.

Bill 86 is currently scheduled for Second Reading on November 1, 2012 and, if passed, would then be referred to a committee for further review, amendment and Third Reading. At this point it is unclear if Bill 86 has any support from the government, as without government support, it would have little chance of being passed into law.

Bill 86 Reflects a Trend Already Underway in the US

Since March 2008, New York City has required restaurants to provide calorie information on menus and menu boards. The state of California has imposed requirements for calorie disclosure on menus of US chain restaurants. Seattle and Philadelphia also require sodium, saturated fat and carbohydrate content disclosure.

These local requirements in the US will soon be replaced with federal legislation. In March 2010, the US Congress passed a law requiring chain restaurants with 20 or more locations in the US to provide calorie disclosure on menus and menu boards. The regulations are expected to be finalized and take effect in 2012.

Do Such Disclosure Requirements Work?

There have been numerous studies conducted in the jurisdictions that were early adopters of menu disclosure requirements relating to calories. The results appear to be inconclusive as to whether such disclosure makes any difference in consumer behaviour. A Stanford University study involving New York City Starbuck’s concluded that calorie levels of non-beverage food transactions declined 14%. A small study conducted at six full-service restaurants in Seattle concluded that there was a small decline (15 calories per transaction) following the disclosure of calorie information. However, another small study in New York observed a small increase in calories per transaction following the implementation of calorie disclosure on menus.

The studies conducted to date suggest that consumer decisions relating to food are complex. It may be too early to gauge how calorie disclosure on menus will affect caloric intake and that such an analysis will require monitoring of consumer food choices over a longer period of time. There are an abundance of factors, aside from calorie count, that affect the menu items chosen by customers, such as advertising and marketing. However, as the CSPI report points out, requiring the disclosure of calorie information on menus may have the greatest impact by prompting restaurants to reformulate menu items with fewer calories and less sodium.

What Are the Implications for Food Service Companies in Canada?

Although the Canadian government has been slow to impose the menu requirements that are soon to be implemented in the US, Canadian restaurant chains should be aware of the many advocates of calorie and sodium disclosure and the pending legislation in Ontario. The following issues will be of keen interest to restaurant chain franchisors and franchisees:  

  1. Most franchise agreements require franchisees to comply with all applicable laws, which would include any requirements imposed for the disclosure of nutritional information, yet it is often the franchisor that has a proprietary interest in recipes, resulting in franchisors bearing the burden of ensuring compliance with the applicable menu label laws.
  2. If, as in the US, menu label laws require the food service establishment to have a reasonable basis for the nutritional information that they disclose, will it be considered to be reasonable for a franchisee to rely on the information provided by its franchisor or will independent nutrition analysis be required?
  3. Will both franchisors and franchisees be fined for non-compliance with menu disclosure requirements?  

The push towards legislating this matter in Canada means that it is only a matter of time before Canadian franchisors and franchisees are required to turn their minds to such concerns.