McDonald’s Ready To Adopt Calorie Labeling   

MIAMI, FL - JULY 23: A sign for a McDonald’s restaurant sits in front of an American Flag July 23, 2012 in Miami, Florida. The company announced that 2nd quarter profit dropped 4.5 percent.

Photo by Joe Raedle/Getty Images

One of the many provisions of the Patient Protection and Affordable Care Act that would have been a pretty big deal as standalone legislation had it not been folded into the larger package is the requirement that chains with twenty or more outlets begin providing calorie information on their menus. Thus far most chains have been resisting steps to comply with this rule, presumably preferring to bank on a Mitt Romney election win and swift repeal. But today McDonald’s said it’s going to start listing the information.

I’m really curious as to how this will work out. The empirical studies of small-scale menu labeling rules that have happened so far don’t show particularly large impacts, but I don’t think that really answers the key question for us.

What disclosure does is change the basis of competition. Right now, a restaurant that finds a way to make a dish lower in calories while holding cost and flavor constant has no real way to turn that to its advantage. Under the circumstances it’s no surprise that restaurant chains don’t invest in developing that kind of product. Simply forcing firms to cough up more information about existing products probably won’t change much, since all the products are still the same. But conceivably it will encourage restaurant chains to think differently about future product development which, if successful, could be a game-changer. It could also be a bust. Maybe nobody will come up with anything good, or maybe consumers just won’t care even when credible information is available.