Obama ‘Forcing’ Papa John To Raise Prices
President Barack Obama’s ambitious healthcare plan for Americans has resulted in a very unusual fallout. Popular pizza chain, Papa John, has announced that if the healthcare plan is put in place, it will have to increase the price of per pizza by at least 11-14 cent. The price hike may not be too sharp but for a country already reeling under economic concerns, every penny counts and, probably, the pizza chain knows that very clearly. Back in 2010, the pizza chain had fired a salvo at Domino's with Double Bacon Six Cheese Pizza. But the salvo that it is aiming to fire at the Obama administration, seems to be more serious in nature.
In simple words, the healthcare plan, presented by the Obama administration says that those business owners, who are employing 50 or more people in their business operations, will have to offer “affordable healthcare” to their employees. In case they are unable to do so, the owners will have to pay a penalty. Many business owners in the country have already decided to oppose this move of the federal government, saying that whatever extra costs are incurred through the affordable healthcare plan will, sooner or later, be conveyed down the line to the customers. Papa John pizza chain is one such business.
Papa John Doesn’t Support ObamaCare
John Schnatter, owner of the pizza chain, has said upfront that he is not in favor of the healthcare plan. Schnatter even revealed that he has been organizing fundraising events for Obama’s rival in the presidential elections, Mitt Romney. Judy Nichols, owner of Papa John’s Texas franchise, had this to say, “I have two options, I can stop offering coverage and pay the $2,000 fine, or I could keep my number of staff under 50 so the mandate doesn’t apply. Obamacare is making me think about cutting jobs instead.”
Why this Hue & Cry?
Come to think of it, an 11 cent price hike on a pizza is not much to think of, considering that Papa John is currently delivering a large pepperoni pizza to customers at $14.08. If that becomes $15, no one would bat an eyelid. An online writer even writes, “Stipulating for a moment that this is true, doesn’t it seem like a rather small price to pay? …Schnatter is warning me that the problem with Obamacare is…a one-time price increase of less than 1 percent! That seems eminently reasonable. What’s more, it’s well within the range of the kind of price swings Papa John’s is going to have to expect just based on the vagaries of the weather.”
If Schnatter will have us believe that his main contention with ObamaCare is that he doesn’t want his customers to shell out 11-14 cents more per pizza, that is too much of shindig. Consider this fact – Papa John has currently more than 16,500 employees and once the healthcare plan is in place, Schnatter will have to offer health coverage to all those employees. So, now you know it is not all about the price hike, but something else is going on behind closed doors. Have your say. Tell us should Papa John increase the pizza price and pay health coverage to its employees or should President Obama forget about providing basic healthcare to average Americans? In fact, Schnatter was very straightforward in a recent interview, “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.” He reasoned, “We’re not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare.”
Papa John is not alone in expressing concern over the economic fallout of the ObamaCare plan. Restaurant chains like Burger King, Dunkin’ Donuts, and Quiznos have also said that the plan would hurt business prospects. Now it remains to be seen, how soon one or all of these chains would also rise up in arms against the health plan for poor, hardworking Americans.