News

Restaurant groups deride lack of Renewable Fuel Standard decision

November 24, 2014

Last week, the Environmental Protection Agency announced it will delay the 2014 ethanol volume mandate, a move that will continue to affect commodities costs. The announcement was greeted with strong opposition from restaurant industry organizations.

"We are disappointed that the EPA has decided to further delay this important decision,” said Scott DeFife, EVP, National Restaurant Association, in a news release.  “Restaurants are being severely challenged by the sharp increase in wholesale food prices, due in part to the RFS.  This announcement is just more evidence that the RFS is truly broken and must be fixed."

The NRA is calling on Congress to reform the RFS and, more specifically, repeal the corn-ethanol mandate.  

The National Council of Chain Restaurants' Executive Director Rob Green accused the White House and the EPA of "accommodating a small group of ethanol lobbyists."

“This unbelievable non-announcement demonstrates once and for all that the EPA, because of statutory and political considerations, cannot fix the failure of the RFS. Members of Congress should take note. The federal RFS ethanol mandate is irrevocably broken and needs to be repealed immediately. It is time that Congress take the RFS ‘off the menu’ once and for all," he said in a statement.

The RFS was first implemented in 2006. Prior, corn prices were set by food supply and demand. Many restaurant operators cite the program for increasing commodities prices, from corn to grain, and poultry to beef.

In May, David Cox president of Arby’s Coop, ARCOP Inc., told this publication that the RFS impact is a "major issue" in the industry. 

 “The RFS mandate established an underlying floor for corn by creating mandated ethanol production levels that increase each year,” Cox said. “It guaranteed demand for ethanol. So now, 40 percent of corn grown in the U.S. is used for ethanol production. In commodity world, corn is king. It impacts all other costs.”

The National Restaurant Association and the National Council of Chain Restaurants are both focused on a repeal of the RFS. The policy, Cox said, impacts chain restaurants by $3.2 billion a year, or about $18,000 per QSR per year.