Produce Industry and the COOL Debate Getting Your Voice Heard Leigh Ann Love Dr. Allen Wysocki...
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Transcript of Produce Industry and the COOL Debate Getting Your Voice Heard Leigh Ann Love Dr. Allen Wysocki...
Produce Industry and the COOL Debate
Getting Your Voice Heard
Leigh Ann Love
Dr. Allen WysockiUniversity of Florida
2004 WCC-72 Panel Discussion
What is the REAL Question?
One of the main issues discussed in the 2002 Farm Bill was country of origin labeling, which would require all food
products to be labeled, indicating country of origin.
No doubt that actors in the produce industry support some form of
country of origin labeling.The question is whether COOL
should be voluntary or mandatory.
Produce Marketing ChannelIs there a consensus?
Consistency? Consensus? Packers/Shippers
differ between public and private opinion on issue—stuck between growers and retailers.
The link between the Integrated Retailers and Consumers is cost of implementing COOL.
Producers
Packers/Shippers
Integrated Retailers
Consumers
Mandatory COOL Overview
Included in the 2002 Farm Bill Voluntary until September 30, 2004, at
which point it becomes mandatory for fresh red meat products, seafood, produce and peanutsHas been postponed until September 2006Except Seafood (will be implemented this fall)
The USDA Agricultural Marketing Service is responsible for regulating and enforcing mandatory country-of-origin labeling.
Source: http://www.countryoforiginlabel.org
Covered Commodities and ExemptionsCovered Commodities Fresh beef Pork Lamb Veal Seafood Marinated products,
like marinated pork tenderloin
Produce Peanuts
Exemptions A product that is an
ingredient in a processed food item is exempted from the law. Different identity Covered commodity is
materially changed.
Salmon in sushi Tenderloin in Beef
Wellington Nuts in a candy bar
Source: http://www.countryoforiginlabel.org
Mandatory Labeling Proponents:National Farmers Union
“…Without mandatory labeling, consumers have no way to distinguish our quality products from imported
products. Voluntary labeling has not worked, even though it has been an option available to U.S. food
processors and packers for years. Voluntary labeling is not the answer.”
Officially called the Farmers Educational and Cooperative Union of America; Founded in 1902
General farm organization with a membership of over 300,000 farm and ranch families
In agreement with Farmers’ Unions in: AR, ID, IL, IN, MN, OK, OR, MO, MT, ND, SD, PA, TX, WA
Source: Letter from NFU to House Ag Committee Members (May 18, 2004)
National Farmers Organization
"Because 70 percent of consumers favor COOL, and business universally recognizes that consumers are
always right, I think the same opportunity exists today for the industry to truly help and protect consumers,
and uphold their right to know where their food comes from."
Non-profit organization founded in 1955 Based on the idea to create a way for producers
to communicate agricultural and rural concerns to congressional and local leaders.
In agreement with Farmers Organizations in: CA, IN, MO, MT, NY
Source: Statement from NFO Press Release (June 23, 2002)
American Farm Bureau Federation
“COOL will give American consumers the power to select a food product based on its country of origin,
while also benefiting American agriculture. U.S. consumers want the opportunity to choose food items
produced on America’s farms and ranches.”
Independent, non-governmental, voluntary organization
Governed by and representing farm and ranch families, represents over 5,000,000 members.
Based on local, county, and state Farm Bureau organizations and offices
In agreement with state associations in: ND, CA, OK, PA, FL, GA, WA, VI, KS, ME, IN
In agreement with various county associations in: CA, ND, FL, NE, KS
Source: Statement from AFBF President Bob Stallman (November 25, 2003)
Other Mandatory Proponents: National and State Organizations
National Family Farm Coalition National Potato Council
Oregon Potato CommissionWashington Potato Commission
National Onion Association Florida Fruit and Vegetable Growers Western Growers Association Texas Vegetable Association
Source: Personal Interviews (May 2004)
Other Mandatory Proponents: Grower Organizations
California Citrus Mutual Florida Strawberry Growers Florida Tomato Exchange Michigan Asparagus Commission Minnesota Apple Association Peace River Valley Citrus Growers Washington State Potato Growers Washington Tree Fruit Growers
Source: Personal Interviews (May 2004)
States That Require COOL
COOL on Fresh Produce Florida Maine
COOL on Other Products
Source: GAO Report to Congress on COOL (August 2003)
State Mandatory COOL Programs: Florida
Products covered: Produce at retail level Only imported products must be labeled Labeling must indicate the country of origin The industry complies through:
Hand-lettered signs Individual stickers placed on products Permanent printed signage Signs in which information easily slipped into slots on the
edges of display bins.
Inspections involve verification of signs or labels of origin in the retail display areas with shipping containers in the storage and unpacking areas at each location.
Source: GAO Report to Congress on COOL (August 2003)
State Mandatory COOL Programs: Maine
Products covered: Fresh produce at the retail level.
With the exception of apples and potatoes, only imported products must be labeled
Fresh produce may be labeled individuallyon the package or the binwith a placard near the producedisplayed in the original shipping container
Maine’s country-of-origin labeling program does not require retailers to maintain documents related to product origin.
Source: GAO Report to Congress on COOL (August 2003)
The Flip Side of the CoinProponents of Voluntary COOL Say…
Voluntary Labeling Is market-driven by consumer demand and
industry promotional needsRecognizes existing labeling programs should
not require additional country labels. i.e. Labels that identify the farm, state or region of origin or certified U.S. brands, such as Black Angus Beef
Minimizes record-keeping by utilizing country records made for other laws to verify where products originate. Only those companies that produce or directly import products would have to keep those records.
Source: Statements from Press Release on Proposed Voluntary COOL (May 26, 2004)
The Flip Side…Voluntary Labeling
Voluntary LabelingAllows flexibility in providing country
information. More than 75% of produce items already have some medium for providing country information, such as packaging, stickers and twist-ties. A voluntary labeling program would allow the industry to use these mediums.
Is cost-effective because labeling would be performed at the point in the supply chain where it is most efficient to do so. This may vary by product depending on the company that produces or imports the food and has firsthand knowledge of its origin.
Source: Statements from Press Release on Proposed Voluntary COOL (May 26, 2004)
Voluntary Labeling Proponents:Produce Marketing Association
“PMA supports a simple, voluntary approach to country of origin labeling. We believe a mandatory
system is unnecessary and that the system outlined by USDA in its proposal is burdensome to industry,
to regulators, and to consumers.”
Founded in 1949 Not-for-profit global trade association Serves more than 2,400 members who market fresh
fruits, vegetables, and related products worldwide Members are involved in the production, distribution,
retail, and foodservice sectors of the industry.
Source: Comments on COOL from PMA to USDA and Congress (January 2004)
United Fruits and Fresh Vegetables Association
“United’s position…has been clear and consistent… Make sure that any law or regulation implemented provides benefits to our members without adding needless costs to the industry and consumers or resulting in unintended consequences that might
change produce distribution and marketing practices in ways that harm our business.”
Founded in 1904 Mission is to promote the growth and success of
produce companies and their partners. Represents growers, shippers, brokers,
processors, wholesalers and distributors of produce
Source: Statement from an editorial in The Packer (September 15, 2003)
Food Marketing Institute (FMI)
“We do not need to create a bureaucratic nightmare that will drive small retailers and producers out of business. Food retailers have long promoted U.S. brands and their region, state or farm of origin. This initiative (voluntary COOL) can build on these efforts
and accomplish the same goal as the mandatory labeling law without the baggage of excessive
compliance costs.”
Conducts programs in research, education, industry relations and public affairs on behalf of its 2,300 member companies
Membership consists of food retailers and wholesalers in the US and around the world
US members operate approx. 26,000 retail food stores, combined annual sales of $340 billion
Source: Statement from FMI President Tim Hammonds (January 16, 2004)
Food Marketing Institute: COOL and Its Affect on Trade
“The mandate would undermine free trade, particularly with our largest and most valuable
trading partners: Canada and Mexico. Representatives from both nations have already stated that requiring country-of-origin labels is a protectionist action, serving as a barrier to free
trade. According to press reports, representatives from Canada are already considering plans to void
this mandate by taking action before the World Trade Organization.”
“In an increasingly borderless global marketplace, a country-of-origin mandate takes a step
backwards.”
Source: Statement from FMI Press Release (April 26, 2002
National Grocers Association
“N.G.A. has consistently supported repeal of mandatory labeling and its replacement with a
voluntary system. The current law and proposed regulations will hurt all segments of the food
industry – including producers, processors, and community-focused retail grocers and
wholesalers.”
National trade association Represents retail and wholesale grocers that
comprise the independent sector of the food distribution industry
Members include retail and wholesale grocers and their state associations, as well as manufacturers and service suppliers
Source: Statement from NGA Press Release (January 16, 2004)
Grocery Manufacturers of America
“GMA has consistently opposed additional mandatory country-of-origin labeling requirements. Particularly
as administered by USDA, the Farm Bill’s requirements will result in a duplicative, confusing and costly scheme that will actually harm the very people Congress sought to help – U.S. producers.”
Founded in 1908 in New York City, NY Advances the interests of the food, beverage and
consumer products industry on key issues that affect the ability of brand manufacturers to market their products profitably and deliver superior value to the consumer.
US membership has annual sales of more than $500 billion and employ more than 2.5 million workers in all 50 states.
Source: Statement from GMA Press Release (October 1, 2003)
Other Voluntary Proponents: National and State Organizations
American Mushroom Institute National Watermelon Promotion Board Wisconsin Potato and Vegetable Growers Texas Produce Association Sunkist Grower Cooperative
Has instituted own COOL labeling programMarketing Advantage under Voluntary
Regulations
Where is the industry split?
Depends on what sector of the industry being questionedRetailer/Marketing…YES to VOLUNTARYGrowers/Shippers…YES to MANDATORY
(In the Produce Industry) a strong majority consensus on mandatory COOL has existed. However, within the past
year, retailers have held an intimidating position (on COOL), causing a fracture of support for the issue in the industry. This fractured consensus is due to tactics by
the retail industry, eroding at the support for mandatory regulations.
Source: Statement from Wayne Mininger, National Onion Association. Interview (May 2004)
In Summary…
“County of Origin Labeling is a moving target.”
Ray Gilmer, Florida Fruits and Vegetables Association