If nothing changes between now and Sept. 30, the seafood industry will be required to label nearly all its products to identify the country where the fish or shellfish originated, even though all other food products were allowed an extra two years to comply with a new law.
Seafood producers that import raw material from many countries are up in arms about the law, saying it will cost them millions and make them less competitive. Regulators from the U.S. Department of Agriculture estimate that when the law goes into effect for all food producers, the cost to U.S. business will be in the billions.
Changing their labels is the smallest part of the investment, say processors. They will need separate holding areas for seafood from each country, which may require adding space to their plants, and additional personnel for record-keeping, and more.
Part of an omnibus farm bill passed in 2000, the Country of Origin (COOL) rule is a retail labeling law requiring that stores identify the country where nearly all food products they sell, from produce to meat, originate. Retailers will rely on the food producers for the information, placing much of the economic burden of compliance on processors.
Congress did not require immediate implementation of COOL, and instead gave food producers two years to comply, during which time they could do volunteer COOL labeling.
No one did.
In January, Congress passed the Omnibus Appropriations Bill, which granted the food industry another two-year extension, to fall of 2006.
Except the seafood industry.
Seatrade International of Portsmouth, New Hampshire, imports scallops from several countries, buys U.S.-landed scallops and exports scallops to several countries. Separating, keeping track of and labeling the plant’s many scallop products will be a logistical nightmare, said controller Bob Blais.
“This law is too complicated. It won’t be effective to solve the problems it’s supposed to. It’s too much, too quickly and without enough thought,” said Blais. He expects Seatrade will have to upgrade software to do better tracking, add more clerical positions and perhaps expand space for holding and segregating product.
“If someone wants to contaminate a food product, this won’t stop them,” said Blais. “Processors import so much product, it moves hand to hand all over the place. You can’t keep track of it all.”
Justin LeBlanc is vice president for government relations with the National Fisheries Institute, an industry trade association in Washington, D.C., which is lobbying hard against COOL.
“The USDA has 60 to 90 days after the Feb. 27 deadline for public comment to publish the final rule,” said LeBlanc. “That means the rule could come as late as the end of May, and processors have to comply by Sept. 30. But retailers are demanding contracts by March 1 and the rule won’t even be out then.”
NFI is working with broad coalition of industry people to try to roll back the regulation and allow a voluntary program that would allow people who produce all-U.S. food products to use the country of origin as a marketing tool.
Ostensibly, COOL is designed to enhance the safety of the food chain, prompted by the one U.S. case of mad cow disease and an outbreak of Hepatitis A caused by imported green onions.
All U.S. seafood producers have operated under a mandatory self-policing inspection program called HACCP (Hazard Analysis Critical Control Point) since 1997. All companies in other countries that export product to the U.S. must operate under an equivalent program. Each importer is charged with verifying each foreign plant’s system. Food and Drug Administration inspectors make random checks of incoming products.
HACCP was designed as a guarantee of food safety, to ensure that seafood products from other countries purchased by American consumers would be as safe as U.S. products. In the past decade, all seafood producers buying or selling products in the U.S. invested a lot of capital in plant reconstruction, modern equipment and personnel training in order to operate under the stringent HACCP guidelines. HACCP includes detailed record keeping so producers can trace back any product with a problem.
Processors will have to order smaller quantities, and therefore pay more. Maintain segregation plans to separate products from different countries. “This would mean a processor would have to run all the Indian shrimp through a plant before dumping the Thai shrimp in,” LeBlanc said.
Based on surveys, lawmakers believe U.S. consumers want country of origin labeling.
“If you ask consumers if they want the country of origin to appear on the labels, they’ll say yes. I probably would, too,” said LeBlanc. “But if you ask them open-ended questions about their seafood concerns as some other surveys have, COOL doesn’t even make the top ten.”
“For the past two years since the bill was passed, it’s been voluntary for those who want to provide COOL, but no one has,” said LeBlanc. “Which shows us that if consumers wanted it, the marketplace would be providing it.”
There’s also no indication that consumers will make purchasing decisions based on the country of origin, LeBlanc added. “There’s a small segment of the market, people who are really patriotic who want to buy only products from the U.S. But to reach that market, a producer only has to label it as a U.S. product – use it as a marketing tool.”
“The system doesn’t deal with the realities of the supply chain. The seafood industry sources raw material from dozens of countries, and co-mingles it to achieve the value in value-added products that consumers want. We believe Congress intended to exempt many of these, as processed food items, but the agency has interpreted in a very narrow way,” said LeBlanc.