NACS 2017: How the Trump Presidency Affects Convenience

While regulations and bills surrounding immigration, foreign policy and healthcare have been top of mind when discussing Donald Trump’s first year as president, many administration initiatives are having major implications across the food industry — and those ripples are being felt from the USDA all the way to convenience stores.

During last week’s National Association of Convenience Stores Show (NACS) 2017 in Chicago, Illinois, Julie Jackowski, senior VP and corporate general counsel at convenience retailer Casey’s Market, moderated a discussion about how the Trump administration is shaping the convenience industry. Douglas Kantor, partner at Steptoe & Johnson LLP, and Jon Taets, NACS director of government relations, also spoke on the subject.

The panel evaluated the implications of a Trump-led White House for the industry, separating policy changes into “the good and the bad and the unknown.”

Here’s how the panelists think his presidency has shaped the convenience channel thus far.

The “Good”

With a different leadership style than past offices, according to panelists, the Trump administration’s positive impact on areas of the food industry stems from his business background.

“I don’t think I would be surprising anyone in saying that this is a unique political environment,” Taets said. “But this administration is generally more open to hearing what the business community thinks or wants to say… They may not always do what we want but they are much more proactive on what we have to say.”

Some of the business community has supported several of the Trump administration’s initiatives, including withdrawing the Department of Labor (DOL) Joint Employer guidance and former president Barack Obama’s overtime rule. Both the changes to the DOL and overtime rule represent a significant shift in wage and hour laws advocated by the prior administration.

The administration has also issued a guidance on New York City’s menu labeling lawsuit, which has historically been “a thorn in the side of this industry,” Kantor said. In 2008 New York City passed laws regarding menu labeling for prepared foods, including those sold in convenience stores. In May, the city announced stricter regulations and that enforcement would begin in August. Urged by the convenience industry, the Food and Drug Administration filed court papers to overturn the requirement that calorie counts be posted by certain establishments. Since then, the implementation deadlines have been delayed.

The “Bad”

The Trump administration may be more open to listening to business leaders, but, according to Taets, it can be harder for some to get access to the administration due to limited points of contact. With major resignations and turnover in top official positions, Taets said about one-third of the lower office, politically appointed positions have yet to be filled.

“He hasn’t appointed them and probably isn’t going to because he thinks the government is too big, but those are our usual points of contact for the industry,” he said.

Although convenience stores appreciated the administration’s involvement in New York’s menu labeling lawsuit, he said many feel the FDA didn’t go far enough. While the FDA has gotten the deadline pushed back and plans to offer solutions to help businesses comply, the initiative still stands as is. Industry leaders hoped to see amendments to the bill rather than simply a guidance.

To help navigate this space moving forward, panelists announced that NACS is currently in the process of creating a coalition to advocate for better product labeling requirements across prepared and packaged items.

The “Unknown”

Trump has drawn many hard lines in the sand on numerous issues, but there are still plenty of silent spaces that business executives are waiting for the president to weigh in. In particular, industry leaders are keeping their eyes peeled for additional legislation surrounding taxes, Kantor said. Often family run businesses, convenience leaders are also waiting for new tax reform, as Trump has spoken about repealing the existing estate tax lowering small business tax rates overall.

For food and beverage brands themselves, the industry remains steadfast that sugar taxes have proved to be “devastating” for beverages and they have confectionary brands sold in convenience concerned about the future, too. On a local level, convenience leaders and brands have started to push back. Barely two months after it went into effect, the finance committee of the Cook County, Ill. Board of Commissioners voted to repeal its controversial one-penny-per-ounce tax on sugar-sweetened beverages. However, since taking office Trump has remained mum on the subject. NACS executives urged companies to remain outspoken on local-level ordinances and said it will continue to file comments on rules as they come out.

Trade agreements are also top of mind. The North American Free Trade Agreement (NAFTA) is one that Trump has been outspoken about since his campaign trail days, referring to it as “the worst trade deal in the history of trade deals.” While the NACS board said it agrees that the 25-year deal needs updates, not everyone is entirely on board with the president’s proposals, which includes a “sunset date” to the agreement within five years. Some companies believe that kind of drastic change would not give them the stability needed to plan for future investments, panelists noted.

“The Trump administration has never weighed in on these issues so we don’t know how it will come out,” Kantor said.