Papa John’s: ‘Obamacare’ will push pizza prices higher

(Papa John's)

(Papa John's)

Pizza lovers can expect to pay a little more at Papa John’s in the future, thanks to President Barack Obama’s health care law, according to the chain’s founder, John Schnatter.

“Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis,” Schnatter told investors last week, according to a report by Politico.com. He was referring to health care law changes that go into effect in 2014.

Schnatter, a supporter and fundraiser for presumptive GOP presidential nominee Mitt Romney, said the higher health care costs for the country’s third-largest pizza takeout and delivery chain will be passed on to consumers.

“If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders’ best interests,” Schnatter reportedly said.

The restaurant industry also is concerned about the impact of the health care law on already slim profit margins following a U.S. Supreme Court ruling that upheld key parts of the law. The National Restaurant Association called the ruling troubling for restaurant operators and business owners across the country because the law requires companies of more than 50 employees to provide affordable health insurance or face steep penalties.

According to Businessweek, McDonald’s expects the health care law to cost each of its 14,000 franchises between $10,000 and $30,000 annually, and Burger King, Quiznos and Dunkin’ Donuts also expect the law to hurt business, according to a Wall Street Journal report.

As of June,  there were 3,973 Papa John’s restaurants operating in 50 states and in 33 countries, according to a report on the company’s second-quarter results.

Politico noted that another pizza chain’s top executive warned a sitting president years ago that his proposed health care law would also hurt business. WSB radio commentator and recent GOP presidential candidate Herman Cain issued the warning to Bill Clinton during a televised town hall meeting in April 1994 when Cain was CEO of Godfather’s Pizza. “Your plan is simply a cost that will cause us to eliminate jobs,” Cain told Clinton.

78 comments Add your comment

bigdawg88

August 8th, 2012
1:20 pm

Eh, I’ll pay an extra 15 cents for a pizza if that means someone else is getting health care. You should have done like the gas companies and tacked on an extra dollar. lol

SheeshLouise

August 8th, 2012
1:31 pm

Well “Papa John”, just THINK about how much YOU are contibuting to the high cost of healthcare YOURSELF!

Fefe1976

August 8th, 2012
1:39 pm

Well let’s see what will happen if we stop buying Papa John’s pizza. I bet our health will improve.

Ash

August 8th, 2012
1:46 pm

“Our best estimate is that the Obamacare will cost 11 to 14 cents per pizza, or 15 to 20 cents per order from a corporate basis,”

Well considering you have been gouging customers with your over priced pizza for years and years this seems like it should be nothing. 16.00 for a large pizza, yeah I feel sorry for you having to make sure your employees are insured a-hole.

Jimmy

August 8th, 2012
1:48 pm

Hilarious that a guy who includes a tub of garlic flavored butter with every pizza covered in greasy hog fat wouldn’t know to keep his stupid mouth shut about health care.

Debra

August 8th, 2012
1:51 pm

Papa John’s International Inc. founder, chairman and CEO John Schnatter saw an increase in total compensation in 2011, according to a filing with the U.S. Securities and Exchange Commission.

Schnatter’s total compensation rose to $2.75 million in 2010 from $2.61 million in 2010.

Schnatter also owns nearly 6.1 million shares of Papa John’s stock, which is 24.7 percent of outstanding shares.

Schnatter was No. 11 on Business First’s 2011 list of highest paid executives of publicly traded companies that are based locally. That list was based on executives’ 2010 salaries.

Jude Thompson, former president and co-CEO of Papa John’s (NASDAQ: PZZA), earned $2.31 million in 2011. Thompson resigned in August.

Thompson was No. 20 on Business First’s 2011 list of highest paid executives. He earned $1.93 million.

Lance Tucker, Papa John’s senior vice president, CFO and treasurer, earned $827,794 in 2011. Tucker replaced CFO David Flanery, who announced his retirement in February.

The filing also gave notice of Papa John’s annual meeting, which is scheduled to be held Thursday, April 26 at the company’s headquarters, 2002 Papa John’s Blvd.

Papa John’s won’t provide their employees with health insurance.

And now Papa John’s is threatening to increase costs to consumers AND cut jobs as a result of the AHA ???

FYI: Back when unions were strong and the middle class thrived, the average CEO earned 20-30 times the wage of the average American worker. Now, with the decline of unions, the average CEO earns 500 – 600 times the wage of the average American worker.

CAN ANYONE CONNECT THE DOTS ???

Pizza

August 8th, 2012
1:51 pm

My best estimate is that if Papa Johns goes belly up, it will save between 11 to 14 dollars a month, or 121 to 168 dollars a year per American from a consumer basis.

Mike

August 8th, 2012
1:59 pm

Yea, I feel real sorry for him…..

Bill

August 8th, 2012
2:42 pm

Dear Papa John. You can make up the difference by not funneling our pizza money into right wing super PACs.

Independent

August 8th, 2012
2:48 pm

Dumb A$$es.. Obamacare does nothing to improve healthcare, but will raise costs, fees and taxes on everybody… just wait and watch…

Cutty

August 8th, 2012
2:53 pm

Ever checked the bottom of the box after you eat one of those pies? Yeah, sure it’s Obama’s fault healthcare costs are rising.

Guest

August 8th, 2012
2:53 pm

@ Independent

Can you please elaborate?

Rick

August 8th, 2012
2:58 pm

This law will not just effect the fast food industries, all small business, dry cleaners, oil change, there is not one area of your life this law will not change$$$$ wise. everyone panics when gas goes up $.10, what if everything you buy or service you use goes up $.10…just 1 mans view…By the way I don’t want to vote for either Obama or Romney.

Guest

August 8th, 2012
3:01 pm

@ Rick

Can you please elaborate?

Independent

August 8th, 2012
3:14 pm

Guest, It’s hundreds and hundreds of pages and nobody has read all of it.. but it really affects entry level jobs minimum wage.. young and minority where unemployment is through the roof like 25 %.. so if they can’t get that 1st job, it leads to life long gov’t dependency or worse.

Independent

August 8th, 2012
3:18 pm

these young folks, women and minoritties will not drink the Koolaid and vote for Obama like 4 years ago because the jobs situation is so bad for them !! No Hope and little change left !!

Mike L.

August 8th, 2012
3:25 pm

If fifteen cents is what it costs to insure your employees I would have gladly paid the increase (what percentage of your employees do you insure? / are profits that tight?), but now I’ll gladly not purchase your product again.

Mike L.

August 8th, 2012
3:34 pm

Independent, where do you get your health insurance from (hopefully not from Medicare)

Sandy

August 8th, 2012
3:38 pm

I agree with the majority of these posts. There would have been no problem for me to pay fifteen to twenty cents extra for a pizza so that the people who work for you could be able to get health insurance. Now, no way!!!

Guest

August 8th, 2012
3:40 pm

@ Independent

Still vague, baseless claims. The only figure I see is 25%, and you clearly just pulled it out of the air. You’re making some pretty serious indictments, so you should probably cite the data on which you’re basing your extrapolations.

Tom

August 8th, 2012
3:44 pm

This is not about Pizza, it is about everything you buy. The cost of everything you buy is going up because companies pass all costs on to the consumer. You had better vote with your wallet in November. The Supreme Court got it right, it is a tax that will be added to your total at the cash register for everything you buy.

JJ

August 8th, 2012
3:51 pm

I wonder when Papa John’s get their rebate from the insurance company if it will go to reduce the price of pizza or straight into the bonus pool for executives. That is the real problem with modern capitalism costs go to the consumer but profits only go to executives.

RLB

August 8th, 2012
4:11 pm

I think a lot of you are missing the point. This may happen with everything we buy. Companies will just pass this cost onto the consumer just like they always do. Ok, you pay an extra 15% on pizza, then it is your morning coffee and donut, then your grocery bill. Heck if you spend $100 a week on groceries, an extra 11-15% would increase your bill $11-$15. This bill needs to be repealed. It give the government and the IRS too much intrusion into privacy and not to mentiont he government does things the least efficient of any organization in this country. They will make a bondogle out of healthcare. Hold on to your wallets. The more this thing is analyzed, the more the cost keeps going up. We will get TAXED to death over it. I am tired of my taxes paying for other peoples %$#%^% “benefits”. This country got by for nearly 200 year without all of these social programs. If any one have ever studied history, one of the things that help ruin and collapse the Roman Empire was a huge cost on what was the first welfare system. Once people realize they can “vote” themselves more money, the country declines.

RLB

August 8th, 2012
4:17 pm

@Tom- good point. I think there should start being a line item on peoples receipts for “health care tax”. That will get people’s attention. Getting to see the actuall tax they are paying.

steve

August 8th, 2012
4:18 pm

Kind of ironic. If you eat their pizza you need affordable health care.

JacquieMX

August 8th, 2012
4:19 pm

LOL @ Jimmy!!! That is so funny! I agree — even though my teenager is gainfully employed at Papa John’s, that crap will kill you.

Obamacare Sux

August 8th, 2012
4:21 pm

Please lets vote Obama out.

Tom Hyberger

August 8th, 2012
4:29 pm

Stepping on your employees to make yourself and your stockholders rich is ok. Providing them with safety on the other hand is not your problem. I get that.

Gwar

August 8th, 2012
4:36 pm

@RLB

And you can choose not to do business with those companies. Nobody’s forcing you to eat at Papa John’s. If the price of their pizza is too high, don’t buy it.

[...] restaurant industry is worried about ObamaCare. The National Restaurant Association notes that the law requires companies which [...]

Rex Hump

August 8th, 2012
4:58 pm

To the people saying they will be happy to pay 15 – 20 more cents for a Pizza, if places like this have to issue price rises on products, what other companies will have to pass on the cost to the consumer? If you go out for lunch everyday, then it’s going to add up. It’s a tax, just what the SCOTUS said it was.

Kevin

August 8th, 2012
5:07 pm

“I am tired of my taxes paying for other peoples %$#%^% ‘benefits’.”

If you currently have health insurance, YOU WILL NOT BE TAXED! The ACA’s individual mandate “tax” is a penalty imposed on irresponsible people who choose not to insure themselves, and then use the emergency room as their doctor’s office, raising everyone else’s premiums. This has nothing to do with entitlements or welfare and everything to do with personal responsiblity, something you presumably champion. Get your facts straight.

John B

August 8th, 2012
5:23 pm

Papa John’s pizza is basically roofing cement with ketchup slathered on it. Who buys it, anyway? At trial, the court agreed with Pizza Hut’s argument that Papa John’s slogan did not constitute statements of literal fact – that “fresher ingredients” do not necessarily account for a “better” pizza; this ruling was overturned in 2000 when Papa John’s appealed the decision. Although the jury’s decision on the misleading advertising was upheld, the appeals court determined that Pizza Hut failed to prove, under the requirements of the Lanham Act, that the misleading advertising and puffery had a material effect on consumers’ purchasing decisions.[5]

GJ

August 8th, 2012
5:58 pm

F**K Papa John’s. Boycotted. Humanity>Pizza

Joe

August 8th, 2012
6:01 pm

Do you realize what an ignorant remark that is?

Love Obama Care in Lynchburg VA

August 8th, 2012
6:12 pm

I won’t be eating at Papa John’s any more!!!!! Companies give any reason to jack up their prices. If you believe this one you believe anything. I’m sure he will loose a lot of business “Rich” people don’t eat at Papa John’s.

thingspeoplesay

August 8th, 2012
6:16 pm

Soooooo are you kidding me??? I mean really? so what was the reason for Papa John’s raising their prices previously??? I kind of knew already but just like Chik fil A don’t say anything just make food. To say that Obamacare (actual title is Affordable Healthcare Act – FYI teabaggers and repubes- lol sorry couldn’t resist) okay where was I…oh yea to say that it will raise cost is based on what exactly…Everyone will be able to purchase health insurance…those small businesses that are affected only have to offer healthcare…this Act does not require or even state how much an employer will have have to pay into the plan. I’ve actually read all pages of this plan and there’s nothing wrong with it besides its not FREE!!!!! I actually think it should be at no cost to Americans, but hey at least its something, and I’ve had private insurance since I’ve been born…I’d love for those not fortunate as I have to have it. People get a life and grow a heart that are against this…Thank you for your time, Peace and Blessing to all!!! :-)

john

August 8th, 2012
6:23 pm

what about the poor driver. some franchises pay their drivers a percentage of your order as compensation for their car use and their own gas. customers think the driver gets the 2.00 delivery fee. trust me they don’t. they have already lowered the drivers rate to compensate for the minimum wage increase this year. looks like your driver could take another rate decrease.

stephen w penrod

August 8th, 2012
6:28 pm

well a few cents more for a pizza is worth your employees getting healthcare ,and furthermore i think its high time shareholders interest are put on the back burner because they have , have had, and will continue to have health insurance. its time for company execs. to take a hit in the pocketbook just like the majority of us white collar workers have.nobody is worried if their workers can even afford a doctor visit, they more worried about if they still get to get their new bmw or lexus this year.

Math

August 8th, 2012
6:33 pm

@RLB

That’s 15 to 20 cents an order not 15%, it would be more like 1%.

Your $100 grocery purchase would raise $1 or so at that rate.

antitruster

August 8th, 2012
6:40 pm

pizza makers have no market power to raise prices. there are too many alternative competitors for any price increase to be implemented and maintained. I’ll just go somewhere else like the rest of the pizza consuming population. this papa john’s guy is your typical anti obama tea bagging reactionary republican mouthing off without thinking. after he looses business he’ll be the first to lead a new round of price reductions in order to regain his lost marketshare. but i’ll never return.

Independent

August 8th, 2012
6:48 pm

antitruster.. it is clear you ( Like Obama ).. have never run a business !! where do YOU work ???? I thought so !!!

Independent

August 8th, 2012
6:52 pm

I’ll bet these libs say they’ll pay more for a pizza ?? to get healthcare for employees…. probably show up with coupons for FREE pizza and don’t tip the delivery man !!

RGB

August 8th, 2012
6:56 pm

How disappointing it is that most of the commenters here reacted to this story by bashing an individual who has created thousands upon thousands of jobs across the USA. One idiot woman cut-and-pasted an arm’s length of information about how much money PJ executives made. I applaud and celebrate their success because it means the company is satisfying a consumer need and that people appreciate this. But jealousy is a weird disease: it makes everyone sick but the one who has it.

This story is but one small example of an Obamacare tax passed along in the price of goods and services. Many who have commented “don’t mind” paying a little bit more if it means someone gets health insurance. Guess what? Fewer people will have health insurance as the result of Obamacare. That you do not understand marginal economics speaks volumes about your ability to understand anything regarding our system of commerce.

It’s also disappointing that people act as though they really want more information regarding how Obamacare will increase the price of healthcare, decrease access to healthcare for millions of Americans, and bust the American economy in the gut–from which it will never recover. Yes, people are unfortunately more stupid than I ever realized. The Obama presidency has made it indelibly clear that one can fool some people all of the time.

But when the access to and quality of healthcare decline as the cost rises, remember one thing: YOU had a major role in making it happen and you’ll be getting what YOU deserve–along with your relatives, neighbors, and other Americans. Congratulations.

Destin Dawg

August 8th, 2012
6:58 pm

how could you be possibly be for Obama ??? he’s broken EVERY promise to all of us on JOBS.. to women, minorities, youth…. if you really think you’re better off after 4 years ?? vote for him

Destin Dawg

August 8th, 2012
7:00 pm

RGB…well said.. if we get 4 more years.. we deserve it !!

Destin Dawg

August 8th, 2012
7:06 pm

Debra is a loser

josephine costen

August 8th, 2012
7:26 pm

Guess who won’t be eating any more of your pizza – even though you are the closest to my home. You are obviously a BIG republican and this is your way of showing them support!!

Janet

August 8th, 2012
7:30 pm

Why is everything President Obama’s fault? George W, remember him? what was his accomplishments?

Stephen

August 8th, 2012
8:53 pm

Just an FYI: ObamaCare does NOT give ANYONE healthcare–it’s a penalty tax for NOT having it. Remember the difference.