The chairman of Wendy’s Restaurant’s supply chain cooperative, which is responsible for food purchases for Wendy’s Restaurants, says that because of EPA Renewable Fuel Standards every individual Wendy’s Restaurant has to pay $20,000 to $30,000 more per year in costs and the entire Wendy’s System ultimately pays $174 million more in food costs.
“I never done anything like this in my life but I have a responsibility to my employees, fellow franchisees, customers, and my family to make sure Congress knows a well-intended idea turned out to be a very serious problem and it’s getting worse,” said the Wendy’s Quality Supply Chain Cooperative Chairman Ed Anderson on the renewable fuel standards.
“Today, each of our restaurants pay twenty to $30,000 more per year because of the renewable [fuel standards],” he continued.
“Maybe that’s not a big number for some people, but it is for us. That’s 80 [thousand] to $120,000 more dollars per day for food,” Anderson said of his four restaurants alone. “That’s up to $174 million dollars more of current food costs just for the Wendy’s system – 80 percent of which is owned by franchisees like us,” he said speaking of the entire U.S. Wendy’s system.
Wendy’s Quality Supply Chain Cooperative (WQSCC) is a not-for-profit co-op for Wendy’s Restaurant operators that purchases food for Wendy’s Restaurants. The chairman made his remarks on Capitol Hill in late November.
Anderson explained that the U.S. Congress passed the ethanol mandate at a time when neither restaurants nor the economy could afford it.
“I doubt many restaurant operators or our customers know that an EPA mandate is at the root of huge food cost increases,” Anderson said.
“We’re not asking congress for a bailout,” he continued. “We’re asking congress to dig into the true impact of the renewable fuel standard to see how it destroyed the market at the expense of small employers,” he said, adding that he’s specifically asking congress to repeal the renewable fuel standards.
Anderson said that repealing the renewable fuel standard would “level the playing field” between the food and agricultural community and the ethanol manufacturers by “eliminating the guaranteed artificial market the government created to prop up ethanol.”
“Over time it would return normalcy to the food supply chain,” he continued, adding that the current renewable fuel standards cause suppliers, consumers, and restaurants to pay more than they would “under normal market conditions.”
The ethanol mandate, which was implemented in 2005 as a part of the Energy Policy Act of 2005 and modified in 2007 through the Energy Independence and Security Act of 2007, is “making food so expensive that it’s harder for restaurants to continue to grow and invest in new and remodeled restaurants,” Anderson says.
Federal involvement to encourage the use of ethanol as an alternative fuel dates back to the 1970s. The Volumetric Ethanol Excise Tax Credit, which began in 1978 and expired on December 31, 2011, was available for petroleum refiners and gasoline wholesalers.
Additionally, tariffs imposed on imported ethanol at 54 cents per gallon were implemented by the federal government for a similar length of time.
The Renewable Fuel Standard mandates a minimum amount of biofuel to be blended with gasoline through 2022. By that year, the EPA requires an annual consumption of 36 billion gallons of renewable fuel.