Industry News | July 24, 2013

Franchisee Calls on Congress to Repeal Ethanol Mandate

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The small business owner of a Wendy’s franchise testifying on behalf of the National Council of Chain Restaurants called on Congress to repeal the federal Renewable Fuel Standard, saying the mandate to use corn-based ethanol in the nation’s gasoline supply is driving up food prices for restaurants and consumers and hurting job creation.

“When Congress passed the RFS it created a new burden for businesses like ours,” Ed Anderson says. “We’re asking Congress to dig into the true impact of the RFS and see how it has distorted the market at the expense of small employers.”

“What sounded like a good idea has had serious consequences and artificially driven up the price for food both at home and in our restaurants,” Anderson says. “Restaurant owners and employers like us are being hit at a time when our economy can’t afford it.”

Anderson, who owns four Wendy’s restaurants with 140 employees in the Yorktown, Virginia, area, testified during a subcommittee hearing held today by the House Energy and Commerce Committee. He said higher food prices caused by the fuel standard have increased his expenses by $120,000 a year, taking away funds that could otherwise be used to open additional locations and create new jobs.

A PricewaterhouseCoopers study commissioned by NCCR last year found that the Renewable Fuel Standard is driving up costs for restaurants by an estimated $3.2 billion a year. NCCR in June launched a new “Feed Food Fairness: Take RFS off the Menu” campaign intended to convince Congress to repeal the law.

The 2005 law requires energy companies to blend billions of gallons of ethanol into gasoline each year in an attempt to reduce reliance on foreign oil. But the increased demand for corn has driven up the price not just of corn but the wide range of other commodities, including wheat, potatoes, meat, and dairy products.

The National Council of Chain Restaurants, a division of the National Retail Federation, is the leading organization exclusively representing chain restaurant companies. For more than 40 years, NCCR has worked to advance sound public policy that serves restaurant businesses and the millions of people they employ. NCCR members include the country’s most respected quick-service and table-service chain restaurants.