Restaurateur Calls on Congress to Repeal Ethanol Mandate

The small business owner of a Wendy's franchise on July 24 asked Congress to repeal the federal Renewable Fuel Standard (RFS), 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.

“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,” said Ed Anderson, testifying on behalf of the National Council of Chain Restaurants (NCCR). "Restaurant owners and employers like us are being hit at a time when our economy can’t afford it.
“When Congress passed the RFS it created a new burden for businesses like ours. 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.”

Anderson, who owns four Wendy’s restaurants with 140 employees in the Yorktown, Va., area, testified during a subcommittee hearing of 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 be used to open additional locations and create new jobs.

A PricewaterhouseCoopers study commissioned by NCCR last year found the Renewable Fuel Standard is driving up costs for restaurants by an estimated $3.2 billion a year. NCCR in June launched a “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 (www.nccr.net) is a division of the National Retail Federation.