FMI: GAO Report Fails to Cover Core Country of Origin Labeling Issues of Full Cost to Consumers

WASHINGTON, DC — September 10, 2003 — “The General Accounting Office (GAO) report issued today on country of origin labeling (COL) is extremely narrow and falls far short of addressing the full costs to consumers and the industry to implement this mandate,” said Tim Hammonds, president and CEO of the Food Marketing Institute (FMI), commenting on Country of Origin Labeling: Opportunities for USDA and Industry to Implement Challenging Aspects of the Law.

“We respectfully disagree with Mr. Daschle’s claim at a news conference today that this law can be implemented in a cost-effective manner. The only solution is to go back to square one and focus on programs that will truly help producers and preserve for consumers the value, variety and quality they demand.

“Critiquing USDA’s $2 billion estimate for record keeping in the first year, the report suggests that the figure could just as easily be understated or overstated or understated,” Hammonds said. “The USDA estimate covers only the labor for record keeping, and it fails to account for the much larger hard-dollar cost to reengineer a major part of our supply chain according to country rather than efficiency and consumer value.”

“A manufacturer of frozen stir-fry oriental vegetables, for example, determined that the label could have 216 combinations of countries listed based on all the sources of the seven produce items, including the U.S., Mexico, Guatemala, Ecuador, China, Canada, Turkey, Vietnam and Thailand.

“This law will increase to cost of hundreds of the most basic foods, imposing an invisible tax on consumers. It will shutter small growers and ranchers because they lack the resources to comply or because retailers will be forced to change suppliers as they seek companies capable of complying with the law.

“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.

“The law to mandate country of origin labels may sound simple, but it’s really a multibillion-dollar nightmare for the entire food industry and, ultimately, for consumers.”