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COOL final rule harbors no surprises

by Joan Murphy | January 20, 2009
WASHINGTON -- Fresh fruit and vegetable businesses should not expect any surprises from the U.S. Department of Agriculture's long-awaited final country-of-origin labeling regulation that goes into effect March 15.

The Jan. 15 final rule is similar to the Aug. 1, 2008, interim final rule, according to Ken Gilliland, director of transportation and international trade for the Western Growers Association. "It pretty much follows the interim final rule with a slight tweaking," he told The Produce News.

The produce industry fought for changes to the initial COOL regulations in the 2007 farm bill and successfully eased the recordkeeping and penalty requirements. Retailers and suppliers complained to Congress that the unwieldy regulation would have been too costly to implement.

But the final regulation is more aligned to the industry-supported farm bill changes. "This is all pretty straight forward, and a lot of this work has already been done by industry," said Mr. Gilliland.

Products covered under the COOL law will need to be labeled by their country of origin at retail, but commodities included as an ingredient in a processed food item will be exempt, according to the Jan. 15 rule. COOL applies to fresh and frozen fruits and vegetables, macadamia nuts, pecans, ginseng, peanuts, meats, and fish. It does not apply to foodservice establishments.

The definition of a processed food item remains unchanged from the Aug. 1 interim final rule, according to USDA. Excluded from COOL labeling are items derived from a covered commodity that has undergone a physical or chemical change -- such as cooking, curing, or smoking -- or that has been combined with other covered commodities or other substantive food components such as chocolate, breading and tomato sauce, said USDA.

One difference in the final rule is how USDA makes the distinction in defining commingled products. The Produce Marketing Association asked USDA to clarify when distinct items within a category of products are considered different products when combined. USDA said in the Jan. 15 rule that it would rely on the U.S. Grade Standards for fruits and vegetables in determining a combination product.

For example, different-colored sweet peppers combined in a package will require country-of-origin labeling because there is one U.S. grade standard for sweet peppers, regardless of color, said PMA. But there are separate standards for Iceberg lettuce and Romaine lettuce, so a salad mix would be exempt from the new labeling law.

Mr. Gilliland said that there is an exception for oranges because there are different grade standards for oranges grown in Florida, California and Texas. Even so, they would all be considered oranges under the final rule, he added. On the issue of abbreviations on labels, PMA said that USDA's final rule allows abbreviations for state, regional or locality labels, and there are no restrictions for suppliers to use abbreviations in shipping documents.

The final rule includes a few more details on recordkeeping, but the final regulations and a contract between buyers and sellers are two different things, said Mr. Gilliland. If a buyer decides that COOL information must be on all bills of lading rather than invoices, that is a business decision between the two parties, he said.

The rule is silent on the percentage of products that must be stickered if, for example, apples from the United States and New Zealand are mixed in a store bin, he said. That was one issue on which WGA was looking for more guidance that was not addressed in the final rule.

"Compared to where we started, though, the rule has simplified quite a bit," he said.

But not everyone was happy with the final rule, particularly on the definition of processed products.

"USDA takes great liberty with the definition of 'processed products,' effectively leaving several food products without labels and denying consumers the knowledge of their food's country of origin," said National Farmers Union President Tom Buis, who expressed disappointment with the final rule.

It also contains a loophole that allows meat packers to use a North American Free Trade Agreement label and list multiple countries rather than labeling U.S. products as products of the United States, he said. "The intent was to provide country-of-origin labeling, not trade-agreement-origin labeling. If a product is exclusively born, raised and processed in the United States, it should be labeled as such," he said.

One consumer group expressed outrage with the final rule. "Given the recent scandals about the safety of imported food, it is unacceptable that the rule was approved with an overly broad definition for which foods are 'processed,'" said Wenonah Hauter, executive director of Food & Water Watch, a consumer group.

"This definition exempts from labeling over 60 percent of pork; the majority of frozen vegetables; an estimated 95 percent of peanuts, pecans, and macadamia nuts; and multi-ingredient fresh produce items such as fruit salads and salad mixes," she said.

In the meantime, USDA planned to expand training for state employees, develop an automated review tracking system, conduct a retailer survey and conduct audits of the retail supply chain.