Politics and Policy: How the Midterm Elections Will Impact the Food and Beverage Industry

There is a good argument to be made that President Obama is the most imperial president in the post World War era.  Across virtually every sector of business – energy, financial services, pharmaceutical and others – this Administration has used the full extent of executive authority and rulemaking to try to change the way American companies do business.

There is no better example than the Administration’s assault on the food and beverage sector.  Through a relentless series of rules, regulations and industry “guidance,” the Administration and its enforcers at the Food and Drug Administration (FDA), the United States Department of Agriculture, the Health and Human Services Department and its subordinates at the Centers for Disease Control have embarked on a campaign to dictate how American food companies do business.

And when the Administration meets the limits of its authority or practical barriers to its vision, it uses its “bully pulpit” and private threats to get industry to undertake “voluntary” or “self regulatory” action.

When the White House’s posture toward food and beverage companies is combined with Democratic control of one or both houses of Congress during the Obama era, you get a kaleidoscope of laws, regulations and demands in recent years that has stifled innovation and growth and frustrated industry leaders who have been on a positive metamorphosis of change over the last ten years.

Industry attempts to stymie Obama regulators since 2009 have had little impact.  Pro-industry allies have been unable to pass riders in Congress to prevent regulatory action because of Democrat or spilt-control of Congress.

If Republicans take control of the Senate in Tuesday’s elections, the food and beverage industry will gain some level of relief, as it grapples with myriad regulatory and self-regulatory issues put forward by the Obama Administration.

Republican leaders in both houses of Congress, who tend to be philosophically aligned with the private sector, can complain, investigate and request changes in the behavior and approach of regulatory agencies – especially those that fall under the elected official’s oversight and appropriations scope.

So when it comes to a host of issues, federal agency behavior can be challenged more effectively under a Republican Congress.  Here are a few examples:

  • FDA’s current effort to eliminate Partially Hydrogenated Oils from the food supply.

  • Unwarranted changes to the Nutrition Facts Panel.

  • Reform of the Generally Recognized as Safe program for food ingredients, including sodium, caffeine and sugar.

  • Development of the government’s 2015 Dietary Guidelines.

  • Overzealous rulemaking tied to the Food Safety Modernization Act.

  • Discriminatory changes to government feeding programs like Women Infants and Children, the Supplemental Nutrition Assistance Program, the School Lunch Program and others.

  • Front of Pack Nutrition Labeling – will Facts Up Front survive, or will FDA pursue a “traffic light” approach?

  • The development of arbitrary agency (Federal Trade Commission) nutrition guidelines to restrict food marketing.

If Republicans control the Senate with fewer than 60 votes, there are limits to Congress’ chilling affect on the Obama Administration.  However, an embattled sector will find itself with new tools in its public policy toolbox for the next two years.  If that happens, look for activist and NGO groups to shift resources from Washington, D.C., to the states, in the hope of posting some wins in state capitals.

Another observation – if Senator Pat Roberts (R-KS) doesn’t win on Tuesday, the food and agriculture sector will lose a great champion when the 114th Congress convenes in January.  His leadership on tough issues will not be easily replaced.

If Democrats maintain control of the Senate on Tuesday, look for more of the same, with an aggressive Administration seeking to heavily regulate the food and beverage sector, and industry trying hard to overcome it and deploy more resources to innovation, growth and consumer satisfaction.

Sean McBride, Founder and Principal of DSM Strategic Communications, LLC, is former Executive Vice President of Communications and Member Services at the Grocery Manufacturers Association and former Director of Communications at the American Beverage Association