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11:27am December 9, 2012

EPA Renewable Fuel Standards Cost Wendy’s $174 Million in Costs

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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.



About the Author

Christopher Goins
Christopher Goins





 
 

 
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8 Comments


  1. [...] headline: EPA Renewable Fuel Standards Cost Wendy’s $174 Million in Costs. (There was a lot in the news this week about high prices of food in many nations, especially meat, [...]


  2. [...] year in costs and the entire Wendy’s System ultimately pays $174 million more in food costs.  READ MORE Tweet(function() { var po = document.createElement('script'); po.type = 'text/javascript'; po.async [...]


  3. [...] The National Council of Chain Restaurants, a member of the Smarter Fuel Future coalition that includes national petroleum refining and meat producer trade groups, recently launched a new front in the effort to dismantle the Renewable Fuel Standard. The group released a study compiled by PricewaterhouseCoopers, an editorial in the Wall Street Journal and followed up with a round of lobbying on Capitol Hill. [...]


  4. If you want to make Ethanol make it from sugar it cost less to produce and can be made from cane or beets. you could also grow the sugar in tobacco regions and force the price of tobacco up to where people would stop smoking and we would remove the number one killer in the U.S.. By the way Ethanol E15 is not safe in most car’s on the road and can be used in only cars that are designed to burn it.


  5. Due to the beneficial octane enhancement properties of ethanol, it will be used in about the same amounts in gasoline with or without the Renewable Fuel Standard because it is much less expensive than the petroleum products that would otherwise be needed. See http://advancedbiofuelsusa.info/ethanol-use-in-gasoline-production-would-be-the-same-with-or-without-rfs-waiver Evidence for this is that the Oneida Indian Tribe that sells E0 charges 15 cents more for that than for E10 in Northern New York. Thus, getting rid of ethanol in our fuel supply would make transportation more expensive, resulting in making food more expensive, too. http://advancedbiofuelsusa.info/savon-converts-to-ethanol-free-location

    Ask if Wendy’s is helping to hold costs down by selling their used cooking oil to make biodiesel. Do they support the biodiesel elements of the renewable fuels standard?


    • OK, If that is true, then there is no need for the law. It should be eliminated, as an interference in the free market. Of course, I maintain that there was no need for the law in the first place. It is time for this law to die.


  6. That said, I tried to go with low carb dieting 2 days per week
    plans focuses on eliminating carbohydrates from one’s dietary habits since carbohydrates can really add weight to the people. Burning 3500 Calories3, 500 calories per day then ending at 60 grams of carbohydrates per day.



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