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Restaurants to lawmakers: Repeal ethanol tax credit

The National Council of Chain Restaurants and 16 member restaurant chains are urging lawmakers serving on the Joint Select Committee on Deficit Reduction in Washington, D.C., to repeal a federal tax credit for corn-based ethanol producers and a tariff on imported ethanol.

Opponents of the 45-cents-per-gallon tax credit and tariff maintain that the government’s policy to subsidize and support the U.S. ethanol industry has driven up demand for corn, which is used to produce ethanol. As a result, the price of corn has risen, which, in turn, has increased prices for a range of food commodities, including corn-fed livestock.

A letter addressing the issue and signed by the NCCR and the participating chains is scheduled to be delivered to lawmakers Thursday.

“Our interest in this issue is due to the high food commodity costs facing all consumers and all channels of the foodservice industry, including food retailers, such as chain restaurants,” the letter says. “Strong empirical evidence shows a direct link between U.S. policy to subsidize and support the corn ethanol industry and increased demand for corn, which is the dominant ingredient in livestock feed in the United States.”

Signatories are Arby’s, Brinker International, Burger King, Carlson Restaurants, CKE Restaurants, Cracker Barrel Old Country Store, Darden Restaurants, DineEquity, Domino’s Pizza, Dunkin’ Brands, International Dairy Queen, McDonald’s Corp.,OSI Restaurant Partners, The Wendy’s Co., White Castle System and Yum! Brands.

Opponents of the subsidies also maintain that they cost the nation billions of dollars each year — one estimate puts the figure at $6 billion annually.

The Joint Select Committee, also known as the “supercommittee,” has been charged with reducing federal spending by $1.2 trillion by the end of the year.

Rob Green, NCCR’s executive director, called the participation of so many diverse chains very significant.

“There is a lot of industry concern about the ethanol issue, and I think this marks the first time the chain restaurant industry has come together on a united front like this on a single issue,” he said. “It’s appropriate to have the restaurant industry send a communication in a way that reflects the breadth and depth and concern about the issue.”

Both the tax credit and the tariff are set to expire Dec. 31.

Earlier this year, the Senate voted to end both the subsidies and the tariff, which was praised by both the NCCR and the National Restaurant Association.

Green said each member of the committee will receive a letter, as will all members of the House of Representatives and the Senate. In addition, the NCCR plans to rally the industry to encourage members to urge their lawmakers to end the programs this year.

Contact Paul Frumkin at [email protected].

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