Is Obamacare forcing Bonnie Doon Ice Cream out of business?

Newt Gingrich told Sean Hannity on Hannity's radio show that Indiana ice cream maker Bonnie Doon Ice Cream Corp. is being forced to close its doors because of Obamacare.
(Carolyn Kaster / Associated Press)

This post has been corrected. See note at bottom for details.

Maybe you’ve heard about the beloved local ice cream company that’s been forced to close its doors because of Obamacare?

Earlier this week, Newt Gingrich shared the dreadful news with Sean Hannity on Hannity’s radio show. It’s awful, just awful, the two men agreed, that small businesses are being driven under by the “job-killing” Affordable Care Act.

It didn’t take me long to identify the company: Bonnie Doon Ice Cream Corp., an Indiana ice cream maker that also operated a chain of drive-in diners in Mishawaka, South Bend and Elkhart. Or to figure out that the Affordable Care Act probably has nothing to do with the business’s failure.


It’s too bad, of course, that a company long embedded in the fabric of a community is slipping away. (On the other hand, if you check out Yelp, some reviewers think Bonnie Doon’s best days are behind it.) Still, lots of folks have fond memories of the brand.

“We had one of the first electronic signs and we had the first teletrays -- where you sit in the car, and press the button and order,” said Maureen Muldoon of South Bend, a granddaughter and grandniece of the brothers who founded the company in the 1930s. She has a photograph of the ice cream cake her grandfather sent to President Franklin Roosevelt to celebrate his 52nd birthday on Jan. 30, 1934.

The Muldoon family sold Bonnie Doon 23 years ago, so she took news of the closure philosophically: “Like my dad always said, time changes and things move on.”

The idea that Obamacare was somehow responsible for the demise of a local institution seems to have taken root after Bonnie Doon’s chief financial officer gave a couple of newspaper interviews about the decision to shutter the ice cream factory and the last restaurant that the company owns. (There is an independently owned Bonnie Doon restaurant in Mishawaka that will remain open.)

CFO Beth Filer told reporters that a number of factors led to the decision to close if a buyer cannot be found. She cited the declining economy and a rise in fuel and ingredients costs. She also noted that the customer access to the last company-owned restaurant had been impeded by road construction. And, she said, anticipated costs of Obamacare played a part as well.

Obamacare, she told the Elkhart Truth, “becomes a huge financial point. It’s a small company getting hit in a lot of directions.”

So is the area really losing a beloved ice cream maker because of President Obama’s evil plan to provide health insurance to all Americans? Or was this an example of a business conveniently blaming the healthcare law for its own poor fortune or bad stewardship?

I tried to reach Filer on Thursday and Friday. She did not return my calls. When I asked to speak to the company’s president and chief executive, Sam Dugan, the woman who took my messages said he did not work there anymore.


Filer told the Tribune that Bonnie Doon, which had revenues last year of $9.6 million, according to Standard & Poor’s, had been purchased in December by a holding company that had invested $500,000 in the business.

Filer refused to identify the holding company, but a quick check of the Indiana secretary of State’s website shows that the parent company of Bonnie Doon Ice Cream Corp. is BD Acquisition, an Elkhart-based company that was created Dec. 13. Its principals were not listed online.

Bonnie Doon had around 30 employees, well below the 50-employee threshold for mandatory employer coverage, but Filer said that the parent company’s payroll pushed the number of total workers above 50.

Closing down “was a very difficult decision,” Filer told the South Bend Tribune. “But being part of a larger group [i.e., the holding company], Bonnie Doon falls into the whole Obamacare world, and looking at expenses in the future, the ability to continue from a financial standpoint is questionable.”


Not everyone buys the death-by-Obamacare story.

For starters, BD Acquisition had to have known it would be obligated to provide health insurance coverage to employees; it bought Bonnie Doon months after the U.S. Supreme Court upheld the Affordable Care Act last year. And it’s not as if costs are imminent; the employer mandate has been postponed until 2015, more than a year from now.

“It seems highly, highly implausible that someone would be closing a business now in anticipation of projections around health costs 15 months from now,” said Ken Jacobs, chairman of the UC Berkeley Center for Labor Research and Education. “Any business that says it’s shutting down because of Obamacare is likely going out of business anyway.”

Still, that hasn’t stopped the right-wing noise machine, hungry for “Obama-scare” stories, from running with a tale as insubstantial as the whipped cream topping on a banana split.


Gingrich, of course, told the story with typical brio on national radio .

The conservative website, Townhall, picked up the tale: “Decades-Old Ice Cream Plant Closes Because of Obamacare,” blared its headline. “Goodbye Bonnie’s Tracks, Peppermint Flake and Blue Moon ice cream,” began the Townhall post. “After 75 years the Bonnie Doon ice cream factory in Indiana is closing shop due primarily to Obamacare.”

And the area’s Republican congresswoman, a tea party member who professed her pleasure that the federal shutdown had ended despite voting against the resolution that reopened government, promulgated the misleading news in social media.

“Bonnie Doon Ice Cream in downtown Mishawaka is closing, citing #Obamacare as the reason,” posted U.S. Rep. Jackie Walorski on her Facebook page.


Now don’t get me wrong. I bemoan the loss of an ice cream producer as much as the next Peppermint Flake-guzzling chubbette.

But the idea that Obamacare is forcing Bonnie Doon Ice Cream Corp. out of business is a steaming pile of hot fudge.

[For the record, 4:30 p.m. EST, Oct.18: An earlier version of this post incorrectly identified DB Acquisition as the parent company of Bonnie Doon Ice Cream. The parent company is BD Acquisition.]



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