2021_Alabama_Grocer_Issue_3

INSIDE THE BELTWAY

T h e R e t u r n o f R e g u l at o r y R i s k

JENNIFER HATCHER SENIOR VICE PRESIDENT, GOVERNMENT AND PUBL IC AFFAIRS FOOD MARKETING INSTITUTE

gridlock in Congress and the difficulty in getting anything done legislatively. The result of this standoff is a f lood of new regulations that impact a broad swathe of food retail’s operations. In just the past few months, FMI and many of you, have provided comments on rulemakings in a host of areas including: • Payments (a Federal Reserve proposal to amend the regulation on debit card routing, driving competition); • Food Labeling (an FDA rule on a voluntary symbol depicting the nutrient claim “Healthy”); and • Pensions and Retirement (a PBGC rule on special financial assistance for troubled multiemployer pension plans). There are many additional proposed regulations in the pipeline and retailers need to be prepared to respond to them in order to head off bad regulation that can be even more costly to the industry. Regulators often don’t have much experience with food retail and how it operates, and they depend on good data and examples from retailers, wholesalers and suppliers to help them accurately gauge the impact of their proposals. One of the best examples of the value of engagement dates back to the Obama Administration’s rulemaking on grinding

Retailers need to be prepared for a renewed federal effort to regulate industry.

When the Biden Administration released the Spring Regulatory Agenda back in June, the Acting Administrator of the Office of Information and Regulatory Affairs (OIRA), Sharon Block, included a statement that painted a stark contrast with how she believed the previous administration viewed regulation: The last four years offered a clear lesson on what happens when the Executive Branch fails to uphold its responsibility to protect the American people. Our first regulatory agenda demonstrates our commitment to reversing this trend and using every tool available to meet the challenges of the moment and support a robust and equitable economic recovery. One of former President Trump’s first actions on entering office was to issue an Executive Order calling for federal agencies to repeal two existing regulations for every new one proposed. He ultimately was not successful in achieving this goal – it is pretty challenging to remove a regulation once it is on the books – but it did signal the administration’s overall attitude: they were all about deregulation.

After the furious pace of rulemaking during President Obama’s final years in office, this new approach felt like a welcome breather for businesses that were exhausted by compliance costs and regulatory risk. Regulation and enforcement didn’t stop, of course, but the pace slowed, and many industries felt like they had a more direct voice in helping to shape the rules that were promulgated. Combined with one of the strongest economies since the end of World War II, this deregulatory stance allowed many retailers to shift their focus away from the federal government and – often – towards state and local regulators who stepped in to fill the gap of the slower pace of rulemaking at the national level. But that brief respite is over. If that June release wasn’t a clear enough signal of the Biden Administration’s intentions, the months since have made one thing absolutely clear – robust regulation is back on the agenda and businesses need to be ready to respond on myriad fronts. This difference in approach is partially the result of differences in political philosophy, but it is also a ref lection of the

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