President's Message

From the Jan/Feb 2008 issue of
Wisconsin Restaurateur Magazine

Consumers drive the free market—and the government

Ed Lump, FMP
WRA President and CEO

L et the market decide” is a remark I often hear from businesspeople, talk radio hosts and elected officials of both parties. However, the consumer is the market and the voter. Whether we want them to or not, consumers drive both the market and the government to the outcome they desire.

If a business can’t attract enough consumers it must make changes or it will fail. If consumers don’t like the way a business operates they may ask government to step in. Consumers are not a very patient lot. Let me give the reader a couple of examples.

Smoking in public places: It is not a question of whether smoking in restaurants and taverns will be banned by government; it is just a question of when. It is not a question of the marketplace not moving in that way voluntarily; it is a question of the marketplace not moving fast enough for the consumer. Therefore, the consumer is asking government to “fix” the marketplace. It is understandable that businesses with customers who smoke want to keep them and fear that banning smoking will drive them away. It is also true that customers who don’t smoke don’t have to patronize that business. This is how the marketplace works. However, approximately 80% of consumers don’t smoke. The vast majority of them don’t want to be anywhere around smoke and they certainly don’t want their children exposed to smoke. Consumers have lost patience with the voluntary approach. More and more consumers don’t want to have to make the choice. They just want to have smoke free places and they want the marketplace of government to act. When 80% of the voters want government regulation, the odds are simply too great to stop that regulation from going forward. It’s called democracy.

Menu labeling: Consumers have long been able to read the content list on food they buy in grocery stores. Until recently, there has been little interest in having restaurants provide similar information. However, over the last few years the consumer has been barraged with consumer reports and media coverage dealing with nutrition and health. Along with this public attention comes a new emphasis on portion size, fat content, calories and sodium in food served in restaurants. Fortunately, WRA was successful in getting a law passed in Wisconsin to protect restaurants from lawsuits holding them responsible for making people fat. Nonetheless, there is momentum building to require that restaurants provide more nutritional information to consumers. This momentum is obvious because the restaurant chains are moving rapidly to provide such information on websites, brochures and posters. Laws requiring restaurants to list the calories, fat content and sodium for each menu item have been passed in a number of municipalities around the country, while similar proposals are being circulated in several states, in addition to the US Congress. The National Council of Chain Restaurants is, in fact, supporting some of the state and national legislation because they see the handwriting on the wall and do not want to deal with a myriad of local regulations. At this time we have not seen legislative proposals to require independents with under ten or fifteen units to provide this information. But once the public sees this information provided by chains, they will expect independents to follow suit. If the independent doesn’t provide the information, the consumer (voter) will eventually ask the government to force the issue. WRA will fight to protect the independent restaurant from unreasonable labeling expectations, as well as help the small restaurateur identify resources to assist them in meeting their customers’ desire for nutritional information.

Consumers love our industry and we are all thankful for that. They generally support the concept that government should not interfere with a restaurant or tavern owner’s right to run their business as they see fit. However, people seem to draw the line when the issues are health and safety related. In these areas, consumers want to have a say. Either the market responds to the majority public opinion or the consumers want a vote; and the government will eventually give it to them.

I hope to see you at the Wisconsin Restaurant Expo March 10-12. Celebrating its 75th anniversary, the Expo continues to be the place to see what’s coming next for the restaurant business in Wisconsin. WR