Despite inconsistencies in federal oversight and retail implementation of country of origin labeling, there is no need for stepped up enforcement or fines on retailers, a spokesman for one leading retail association believes.
Retailers do agree with some of the conclusions of a recent Office of Inspector General report on COOL implementation, said Eric Lieberman, regulatory counsel for the Washington, D.C.-based Food Marketing Institute.
“Our members have seen some instances of inconsistencies between the states, which has been a problem,” Lieberman said. In one state, for example, state inspectors were flagging state of origin declarations being in violation when that is permitted under the regulation, he said.
However, the report’s conclusion that improved enforcement is needed raises concerns among FMI members, he said.
“When you examine the OIG analysis of the 2010 follow up reviews, you don’t see a significant level of problems,” he said. “Three percent of the retailers had worse compliance rates,” he said. “So 97% of retailers had actually improved their compliance rate, so I really don’t think that calls for increased enforcement.”
The World Trade Organization has said the program is an illegal trade barrier, and if the agency starts imposing fines, it is an even bigger trade barrier, he said.
“The USDA is going to take a look at this in light of that ruling and move in another direction to make this program less burdensome, if they don’t want our trading partners to retaliate.”
Many retailers have already been inspected for country of origin compliance, Lieberman said. About 8,400 retail stores out of 40,000 retail stores in the U.S. were inspected last year. Inspections can last up to four hours and imposes a significant burden on retailers, Lieberman said.
Of any of the covered commodities, labeling origin information on fresh produce is the toughest task for retailers, Lieberman said.
“It’s got the biggest number of SKUs, you’ve got consumers moving item from one bin to the other.”
Among all the covered commodities, fruits and vegetables are the commodities most often cited for noncompliance with country of origin labeling requirements, according to a USDA review of fiscal years 2009 and 2010. The USDA report shows vegetables accounted for 44% of noncompliance violations in fiscal year 2010, and fruits accounted for 16% of violations.
At the same time, fresh produce represents the biggest category of items covered by COOL. Fruits and vegetables combine to account for 60% of covered commodities sold by retailers, the USDA said.
Kathy Means, vice president of government relations and public affairs with the Newark, Del.-based Produce Marketing Association, said the OIG report shows the need for training store-level employees.
“The staff doing signage at the retail level is often young, part-time, and has high turnover,” Means said in an e-mail. “Keeping those folks trained on proper signage is a challenge for some retailers,”
She said retailers may find the USDA document on specific requirements of the regulation helpful to review.
Ray Gilmer, United Fresh Produce Association, Washington, D.C., said it was wise the USDA has not issued fines to retailers so far.
“This law has only been implemented since spring 2009 and it is a complicated thing to do in a retail store to manage the origin records and labeling for hundreds of different produce items,” he said.
Gilmer said it was important that COOL be a cooperative endeavor and not a “gotcha” program. “The objective here is to not fine retailers, it is to ensure consumers get information about the source of their food,” he said.
Gilmer believes it would be far better for the AMS to continue in a cooperative and educational mode rather than handing out massive fines to retailers.Lieberman said FMI agrees with the OIG recommendation that the retail selection process should be improved to include all retailers subject to the rule.
Having consistent application of the COOL rules is essential for retailers, Lieberman said. “You can’t have different standards in a federal program,” he said. “The enforcement has to be consistent.”He also said retailers also agree with the report’s recommendation of clear guidelines when follow up reviews are conducted.
Timeliness of reviews can also be improved, Lieberman said. “It is important (follow-up) letters are sent in a timely fashion,” he said. “If a retailer gets a letter three or four months after a violation, is going to be hard for them to identify that product and take the corrective actions they need to take.