The National Council of Chain Restaurants (NCCR) on Wednesday released a new, comprehensive report on the impact of federal ethanol policies, specifically the U.S. Environmental Protection Agency’s (EPA) Renewable Fuel Standard (RFS), on the chain restaurant industry, commodity prices, and the food supply chain.  The complete 32-page report authored by PricewaterhouseCoopers (PwC) was released during a press conference on Capitol Hill.

The PwC report examined the ripple effects of the RFS on other agricultural markets and commodity prices.  The findings in the analysis led researchers to conclude that “policies encouraging the use of ethanol not only impact the corn market, but have unintended consequences for other parts of the economy.”

PwC estimated the impact under several scenarios and concluded that the RFS mandate could cost chain restaurants up to $3.2 billion annually, with quick-service restaurants witnessing cost increases upward of $2.5 billion and full-service restaurants seeing increases upward of $691 million.

Ed Anderson

Ed Anderson, owner of a four-unit Wendy’s franchise in Newport News, Virginia and Chairman of Wendy’s Quality Supply Chain Cooperative, explained that “chain restaurants aren’t all mega-corporations.  Many are systems of small business franchises like the one my family owns.”

Anderson, who said the mandate is costing him $20,000 to $30,000 per restaurant said, “The government picked winners and losers when they passed the RFS mandate.  It is blatantly unfair and we urge Congress to repeal it.”

Congressman Bob Goodlatte (R-VA), sponsor of legislation to repeal the RFS, spoke at the press conference and said the PwC report “further underscores why this is bad policy and why Congress must act to fix this broken policy.”

As chairman of the Judiciary Committee for the 113th Congress and a member of the Agriculture Committee, Goodlatte stated he plans to hold more hearings on the RFS.  He added that the 156 House members who wrote letters to EPA Administrator Lisa Jackson to waive the mandate will likely be supporters of his legislation.  He noted in his closing remarks that while he favors a full repeal of the RFS, “if it turns out that reforming the law is more feasible to solving the issue, then we’ll push for that.”

Rep. Goodlatte, NCCR Executive Dir. Rob Green & a PwC representative