Oct 27, 2003
WASHINGTON, DC — October 27, 2003 — “At up to $3.9 billion, the price tag to implement the country of origin labeling (COOL) law — with no clear benefits — is unacceptable to consumers and the industry. The only reasonable recourse is to repeal the statute,” said Tim Hammonds, president and CEO of the Food Marketing Institute (FMI), commenting today on the release of proposed U.S. Department of Agriculture (USDA) regulations on COOL.

“The proposed regulations provide yet another reason for repeal,” Hammonds said. “Under the regulations, growers, ranchers, retailers and others are still subject to $10,000 fines for the inevitable mistakes trying to implement a law grounded in quicksand. The entire industry must still track, segregate by country and document the millions of shipments each year of every fresh and frozen fruit and vegetable, every cut of beef, pork and lamb, and every fish and peanut.

“The regulations will reduce product assortment as the industry is forced to provide more space in feedlots, trucks, warehouses and stores to separate products by country. It will dramatically increase costs for the segregation and record-keeping required. The law and proposed regulations will undermine efficiency by forcing the industry to reengineer one of the world’s most efficient distribution systems. It will require the industry to separate thousands of products by country — from the farm, through packers, through feeding lots, through wholesalers and other intermediaries.

“And all this for what? No quantifiable benefits to producers or consumers at a first-year expense of as much as $3.9 billion, according to USDA’s cost-benefit analysis. In fact,” Hammonds added, “the analysis suggests that the COOL rules could drive many companies to source products outside the U.S., undermining the core objective of the law. The current system is set up for a global marketplace to provide consumers the variety and value they demand.

“This analysis confirms what producers said in a recent survey: 53 percent are not confident that the law will increase sales, including 29 percent who are “not at all confident.” The survey also found that 62 oppose the law in its current form and want it changed or repealed.” FMI commissioned the survey by Wilson Research Strategies, which released the results in mid-October.

“USDA’s cost-benefit analysis,” Hammonds said, “still questions whether the regulations will benefit consumers. Over the past 20 years, FMI has surveyed consumers on how they would improve their supermarket; and when shopping for food, consumers are concerned most about quality, value and convenience. They just do not mention country of origin labeling as a factor.

“We believe USDA is making a good-faith effort to implement severely flawed law. The greatest travesty is that this law is not needed. Food retailers and wholesalers have long supported voluntary labeling — from Washington Apples to Vidalia Onions. Supermarkets frequently feature the products of farmers in their community, promoting their fresh taste, low cost and contribution to the local economy. These programs work because they are voluntary, flexible and clearly benefit consumers, farmers and food retailers.”

A copy of the proposed rule is available at http://www.ams.usda.gov/cool/ls03-04prdoc.pdf.