Mandate could cost chain restaurants billions, says council report
The National Council of Chain Restaurants is urging a repeal of the U.S. Environmental Protection Agency‘s renewable fuel standard based on a 32-page report it commissioned that shows the mandate could cost chain restaurants up to $3.2 billion annually.
According to the report, quick-service restaurants could see cost increases up to $2.5 billion, and full-service restaurants could see increases upward of $691 million. “The use of corn-based ethanol required by the federal renewable fuel standard mandate has dramatically distorted the market and increased costs throughout the food supply chain,” said National Council of Chain Restaurants Executive Director Rob Green. “The RFS has had an adverse effect on the chain restaurant industry, which has witnessed marked increases in commodity prices and associated costs to the tune of billions of dollars a year.”
According to Green, The mandate artificially inflates the price of corn, which increases costs throughout the system, from cattlemen and poultry and pork producers to dairy farmers and restaurant operators. “The RFS mandate forces small business owners, franchisees and their suppliers to spend higher and higher sums on commodities, which ultimately drives up prices on the end-user, the consumer.”
The study was conducted by PwC US, which reviewed public and private reports and combined these findings with chain restaurant survey data to calculate the overall cost of the renewable fuel standard mandate to chain restaurants.