PricewaterhouseCoopers LLC (PwC) conducted a study which examines the effects of the use of corn-based ethanol required by the federal Renewable Fuel Standard (RFS) on the chain restaurant industry and its small business franchisees.
PwC concluded that the RFS mandate, which requires an ever-increasing volume of ethanol fuel from corn to be blended into gasoline each year, significantly increases the food costs of chain restaurant operators.
By 2015, when the RFS is fully phased in, PwC estimates the RFS mandate will:
- Increase total costs for chain restaurant owners by up to $3.2 billion per year for every year the RFS remains in effect.
- Increase total costs at quick-service restaurants by $2.5 billion or ten percent. That is an extra cost of $18,190 per restaurant each year.
- Increase total costs for full service restaurants by $691 million or nearly nine percent. That is an extra cost of $17,195 per restaurant each year.
Read the full report, “Federal Ethanol Policies and Chain Restaurant Food Costs”.