Posts Tagged ‘consumer incentives’
Wednesday, May 18th, 2011
Prepared by Cara Wilking, J.D., Staff Attorney
Santa Clara County, CA and the City and County of San Francisco, CA enacted ordinances requiring restaurants to meet nutrition criteria for children’s meals that use incentive items such as toys to drive child consumer demand. Neither law bans the use of toys or other incentive items, and both laws are designed to protect children from being baited into requesting unhealthy meals. The Governor of Arizona recently signed into law a provision barring local governments from putting any limits on the use of “consumer incentive items” in “retail food establishment marketing.” Florida currently has an even broader law on the Governor’s desk that would prevent local control over “all matters related to the nutritional content and marketing of foods offered” at public food and lodging establishments. As chronicled by the LA Times, both of these laws were carefully orchestrated by the restaurant industry in response to so-called “toy bans.” In point of fact, both laws go far beyond Happy Meal toys.
In addition to protecting vulnerable child consumers, local governments regulate business conduct under their police power and zoning authority for a number of reasons including aesthetics, public health and public safety. Arizona’s consumer incentives law essentially exempts food retailers from any local regulation that may have an impact on their business activities related to consumer incentives. “Consumer incentives” are broadly defined to include: “any licensed media character, toy, game, trading card, contest, point accumulation, club membership, admission ticket, token, code or password for digital access, coupon, voucher, incentive, crayons, coloring placements or other premium prize or consumer product” associated with a meal served by or acquired from a restaurant, food establishment or convenience store. The legislation pending in Florida strips local control over “all matters related to the nutritional content and marketing of foods offered” at public food and lodging establishments.
Many communities maintain the character of their communities through local aesthetic-related zoning laws. Imagine a small city with a historic downtown preserved by local zoning ordinances to protect the aesthetic character of the city. The community becomes concerned when a quick service restaurant starts putting large signs in its windows marketing a combo meal with a wrapper that one can scan with one’s phone to get points towards a future purchase. A local authority goes out to talk to the franchise owner and ask him to remove the signs as they are not in keeping with the local zoning ordinance. The restaurant owner refuses to remove the signs. Under the legislation enacted in Arizona and pending in Florida, the city would be powerless to challenge the practice.
The as yet to be enacted Florida law, is so broad that it would prevent local governments from requiring additional nutritional disclosures to consumers about the calorie or sodium content of restaurant menu items. In addition, some states delegate consumer protection authority to city and county attorneys. Such authority was used by a city attorney to make the first formal challenge to misleading “Immunity” claims on children’s cereal marketed at the height of the swine flu outbreak. The pending Florida law arguably would even exempt any food marketing by a restaurant or public lodging from local city or county attorney enforcement of deceptive and unfair business practices laws.
A recent story by Reuters run in a number of news outlets analogized the current legislation to “cheeseburger” or “commonsense consumption” bills, also sponsored by the restaurant industry. Cheeseburger bills are on the books in over 20 states and bar personal injury claims against food makers and restaurants for injuries related to long term over-consumption of food. Many state cheeseburger bills, however, do not immunize food sellers from liability when they knowingly violate laws pertaining to marketing, distributing, advertising, labeling or sale of the goods such as state consumer protection statutes prohibiting deceptive, unfair or unconscionable trade practices. The very purpose of local ordinances tying child incentive items to nutritional quality is to protect children from the fundamentally unfair and deceptive use of toys to generate child requests for unhealthy foods. The Arizona and Florida laws contain no such exemption to allow local intervention to protect vulnerable consumers from deceptive and unfair food marketing.
The law in Arizona and the pending legislation in Florida, strip local governments not only of the ability to protect children from harmful business conduct, their expansive nature jeopardizes local control over many other important business conduct issues. These laws fundamentally change the rules of the game that local governments have depended on to maintain community character and to protect their communities.