Enticing Business to Create a Healthier American Diet: Performance-Based Regulation of Food and Beverage Retailers

The American public could enjoy a much healthier diet if we enticed food and beverage retailers (stores and restaurants) to substantially reduce the calories, added sugar, sodium, and saturated fat that pass through their cash registers—say, a 25 percent reduction in sugar, salt, and fat and a 10 percent reduction in calories. Rather than ordering firms to make specific changes in what they sell, this strategy—called performance‐based regulation—leaves industry to figure out what is the best way to transform the American diet in a positive way. Because it calls for real changes in outcomes, this regulatory strategy could be far more effective than information disclosure policies that rely on consumer choices, and because it does not require adding extra cost to the price of food and beverages, it could be politically far more attractive than taxing unhealthy foods. Appealing to both conservative and liberal values, instead of relying on the professional expertise of public health regulators, performance‐based regulation enlists America's large food retailers to serve the public good—or suffer substantial financial penalties for failing to do so.