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USDA reveals latest trends in COOL compliance audits

by Joan Murphy | January 31, 2010
WASHINGTON -- Only about a third of retailers audited by the U.S. Department of Agriculture are in full compliance with mandatory country-of- origin labeling and recordkeeping rules, a top USDA official said Jan. 19 during a webinar sponsored by the Produce Marketing Association.

While that is an "outstanding attribute" for stores learning the ropes of the new COOL law, there is still room for improvement, said Martin O'Connor, chief of the Standards, Analysis & Technology Branch of the Livestock & Seed Program at USDA's Agricultural Marketing Service.

Mr. O'Connor shared results from the nearly 4,000 audits of store labels and records conducted by state officials since last summer during an hour-long webinar on COOL compliance trends.

The labeling rule that requires retailers to notify customers of the origin of certain foods went into effect in March 2009.

USDA is planning to review the results of more than 12,000 unannounced audits of retailers planned before Sept. 30 in which state officials check some 300 commodities per store, he said. Auditors check stores for labels that cover meats, fish, fresh and frozen fruits and vegetables, peanuts, pecans, macadamia nuts and ginseng.

So far, auditors found that 33 percent of the stores had records and labels aligned, and the remaining stores not in compliance had problems with fewer than 10 commodities.

Perishable agricultural commodities, nuts and ginseng accounted for 60 percent of all non-compliance findings in retail stores so far. The biggest offenders were vegetables, with nearly 40 percent cited for non-compliance, he added.

One problem is that retailers are carrying vegetables labeled locally grown, which is not sufficient under COOL.

"We need to get this word out to retailers," he said.

Another problem auditors are seeing is that retailers who cut watermelon or cantaloupe and repackage them are not including the origin labels for consumers.

Top items that retailers process in stores that are not labeled by origin are tray tomatoes, cut and cored pineapples, and bagged green beans. Auditors are citing retailers for inaccurate origin declarations in cases when the stickers and the retailer signs do not match.

Mr. O'Connor reminded webinar attendees that the origin of the individual stickers must be consistent with the origin listed on the signage.

He advised the industry to ensure that origin declarations are in conspicuous locations, close proximity to the display, readable and not covered over by other forms of marketing.

USDA also plans to check supplier audits planned for 400 covered commodities under the COOL program, and so far fresh produce items' documentation has been easy to trace through the supply chain, said Mr. O'Connor.

When asked how USDA ensures that auditors follow uniform rules, Mr. O'Connor said that USDA was holding a refresher course for auditors in February to make sure they're "all seeing alike," and added that USDA discusses any issues that surface in audit reports.

Schnuck Markets Inc. has had audits in stores in seven states, and the auditors have been professional, thorough and accommodating, said Mike O'Brien, PMA's chairman-elect and Schnuck's vice president of produce and floral, who also spoke during the Jan. 19 webinar.

What actions have the USDA taken when stores are out of compliance? When stores or suppliers are out of compliance with COOL, auditors leave a checklist of items that need to be fixed. Usually, the store makes the corrections instantaneously, he said.

After Washington reviews the report, a business is allowed 30 days to respond to a letter from USDA. If there's no reply, a business is allowed 15 more days to respond to a second letter.

"No one has passed the 15-day notification letter," said Mr. O'Connor. Under the new law, businesses can be fined for willful violations.