Mar 1, 2007
Mandatory country of origin labeling (COOL) for seafood is failing to deliver the benefits promised by the law. It has not increased sales of U.S. seafood. At the same time, the supermarket industry’s cost to comply with the law is up to 10 times higher than the U.S. Department of Agriculture (USDA) estimated when it issued the interim final rule for labeling seafood.

Proponents of mandatory COOL are nonetheless urging Congress to implement the law for produce, meat and peanuts sooner than September 30, 2008. This move would be extremely unwise given the industry’s two and one-half years of experience labeling seafood under this law. The Food Marketing Institute (FMI) presented comments to USDA this week in response to the agency’s request for cost and benefit information.

“The industry’s experience underscores the need to replace the law with a flexible, industry-led program that would be far less costly and provide information that would actually resonate with consumers, such as ‘Wild Alaskan Salmon,’ ‘Georgia Peaches’ or ‘Vidalia Onions,’” said FMI President and CEO Tim Hammonds.

Hammonds added, “Because of limited label space and limited time for busy consumers to make their decisions, when government continually mandates requirements for signs and labels that generate large fines for noncompliance, we have the labeling equivalent of Gresham’s Law: Bad information drives out the good.

“A law this flawed cannot be corrected simply by tinkering with the administrative rules. The likely result of tinkering around the margins would be to make the bureaucratic nightmare and the resulting costs even worse, not better. The only way out of this mess is to replace the current law with something useful.”

The comments contrasted USDA’s first-year cost estimates to implement the law for retailers and their intermediary suppliers with the industry’s actual expenses based on FMI case studies involving more than 1,000 stores:

Retailer cost per store

USDA Estimate:$1,530

Actual Cost: $9,000-$16,000

Supplier cost per company

USDA Estimate: $1,890

Actual Cost: $200,000-$250,000

The food industry has proposed an effective, flexible labeling model that would communicate the same information in ways consumers would actually find useful without driving costs sky high. “It is time for Congress to correct its mistake and let the industry implement a plan that delivers more without building in the excessive costs that ultimately discourage consumers from buying the seafood we all want to promote. Food retailers are not opposed to providing consumers with country of origin information. We are opposed to doing it with a government program that drives the cost of food unnecessarily high,” Hammonds said.