Comments

Food Marketing Institute (FMI), on behalf of the food retail industry, seeks to provide input regarding the impact of current intermediaries in the pharmaceutical supply chain on retail pharmacies,  and potential solutions to enhance transparency and competition in delivering prescription drugs and medicines to retail pharmacies.

The Food Marketing Institute (“FMI”) submits these comments in response to the U.S. Food and Drug Administration’s (FDA) Food Labeling: Revision of the Nutrition and Supplement Facts Labels and Serving Sizes of Foods That Can Reasonably Be Consumed at One Eating Occasion; Dual-Column Labeling; Updating, Modifying, and Establishing Certain Reference Amounts Customarily Consumed; Serving Size for Breath Mints; and Technical Amendments; Proposed Extension of Compliance Dates, as published in the Federal Register on October 2, 2017.  More specifically, FDA proposes to extend the compliance date for manufacturers with $10 million or more in annual food sales in the final rules published on May 27, 2016, from July 26, 2018, to January 1, 2020, and the compliance date for manufacturers with less than $10 million in annual food sales in the final rules published on May 27, 2016, from July 26, 2019, to January 1, 2021. FMI appreciates the opportunity to submit comments on the proposed extension of the compliance date.

The Food Marketing Institute (“FMI”) submits these comments in response to the request for information (RFI) of the Department of Labor (“the Department”), as published in the Federal Register on July 26, 2017, to gather information to aid in formulating a proposal to revise the regulations at 29 C.F.R. Part 541, defining and delimiting the exemptions for executive, administrative, professional, outside sales and computer employees in Section 13(a)(1) of the Fair Labor Standards Act (“FLSA” or the “Act”), 29 U.S.C. § 213(a)(1).

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Re: Food Labeling; Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments; Extension of Compliance Date; Request for Comments; Docket No. FDA-2011-F-0172.

Dear Sir or Madam,

On May 4, 2017, the Food and Drug Administration (FDA or the Agency) published in the Federal Register an interim final rule (IFR) extending the compliance date for the final rule requiring  disclosure  of  certain  nutrition  information  for  standard  menu  items  in  certain restaurants and retail food establishments (the Menu Labeling rule). The IFR also extends the compliance date for the Menu Labeling rule until May 7, 2018. The IFR goes beyond extending the compliance date by signaling that the agency is reconsidering “fundamental questions and concerns” raised by the final rule. FDA explains in the preamble of the IFR that the Agency is taking this action consistent with Executive Orders (EOs) 13777, 13771, and 13563, as well as in response to the issues raised by affected stakeholders. The interim final rule also announces the establishment of a docket to receive comments on how the Agency might further reduce the regulatory burden or increase flexibility for these rules.

The Food Marketing Institute (FMI) proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, employing more than 3.5 million workers in the United States and representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org.

In the IFR, FDA seeks comments on the issues that have been identified as posing significant implementation challenges by affected stakeholders. Specifically, FDA is seeking comments on ways to reduce the regulatory burden or increase flexibility of the Menu Labeling rule with respect to:

• Calorie disclosure signage for self-service foods, including buffet and grab-and-go foods;
• Methods for providing calorie disclosure information other than on the menu or menu board, including how different kinds of retailers might use different methods; and
• Criteria  for  distinguishing  between  menus  and  other  information  presented  to  the consumer.

FMI appreciates the opportunity to submit comments to FDA regarding the Menu Labeling rule, and  ways  in  which  the  Agency  can  reduce  the  regulatory  burden  and  provide  additional flexibility. FMI also supports FDA’s decision to extend the compliance date to May 7, 2018. Additional  time  provides  both  FDA  and  covered  establishments  with  the  essential  time  to identify opportunities to address these persistent, fundamental implementation problems through reducing costs and enhancing flexibility beyond what is contemplated in the final rule and current guidance.

FMI members agree that it would not make sense to require establishments covered under the final rule to come into compliance, as well as to maintain significant ongoing compliance costs, when these requirements might change as a result of the IFR. Food retailers are committed to providing their customers with the information they demand, but need the flexibility to do so in a way that is consistent with their business model and operations. We believe if the changes highlighted below are incorporated in a revised rule, retailers will be able to meet the objectives of the statute in a less burdensome manner than the final rule and in a way that promotes continued innovation in the supermarket industry. As noted above and discussed in more detail below, there are still a large number of outstanding questions and concerns with the final Menu Labeling rule. While all of these are important, there are a number of areas that FMI members have identified as the most critical to provide much needed flexibility and to greatly reduce unnecessary regulatory costs.

Key Points

• First, in keeping with the statute, which states that menu labeling applies to “standard menu items,” the rule should only apply to those items that are truly standardized across a chain with 20 or more locations. FMI strongly urges FDA to revise the definition of a standard menu item to mean a restaurant-type food that is routinely included on a menu or menu board or routinely offered as a
self-service food or food on display at 20 or more locations.
• Second, platters, catering menus, and foods to be consumed over a period of time should be exempt from the rule.
• Third, for self-service and foods on display, FDA should allow establishments to identify one primary writing for the calorie disclosure rather than requiring multiple disclosures.
• Finally, FDA should provide flexibility for providing additional nutrition that must be made available upon request to allow companies to use new technology in a way that meets their customer preferences.
 
Finally, FMI believes that FDA has the current authority to make these critical changes under the Agency’s current authority. As noted in the final rule and discussed in more detail below, Section 403(q)(5)(H)(x) of the FD&C Act requires that the Secretary of Health and Human Services (Secretary) issue regulations to carry out requirements in section 403(q)(5)(H). Section 701(a) of the FD&C Act (21 U.S.C. 371(a)) vests the Secretary with the authority to issue regulations for the efficient enforcement of the FD&C Act. FMI strongly believes that  based on the above and the full text of the FD&C Act, FDA has the authority to make the revisions discussed below without additional authority granted by Congress.

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RE: Request for Comments on Negotiating Objectives Regarding Modernization of the
North American Free Trade Agreement with Canada and Mexico

Dear Mr. Gresser:

On May 23, 2017, the Office of the United States Trade Representative published in the Federal Register a request for comments on negotiating objectives regarding modernization of the North American Free Trade Agreement (NAFTA) with Canada and Mexico. Since entering into force on January 1, 1994, NAFTA has been an important vehicle for creating integrated supply chains among the three countries that allow the food wholesale and retail industry to provide consumers with safe, healthy and affordable eating options year-round. The Food Marketing Institute (FMI) appreciates the opportunity to submit comments on the modernization of NAFTA and urges American negotiators to maintain and expand the tariff concessions and overall market access that have made NAFTA a highly successful trade agreement and a significant source of growth in the U.S. economy.

The Food Marketing Institute (FMI) proudly advocates on behalf of the food wholesale and retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org.
 
I. NAFTA’s Role in the Evolution of the Food Wholesale and Retail Industry in the
United States

The food wholesale and retail industry is a significant economic sector that employs more than
4.8 million people in the United States and helps support almost 3 million additional jobs in supplier and upstream industries. These are jobs that cannot be exported. In 2015, the industry contributed more than $81 billion to the U.S. Treasury in federal taxes. The industry makes these contributions to the economy despite having an average profit margin below 2 percent. In fact, in the more than 30 years that FMI has tracked the industry’s net profits after taxes, the margin has never exceeded 1.91 percent in any given year.

Over the past thirty years, supermarkets and grocery stores have evolved in ways that would have been hard to predict in the days before NAFTA. Grocers – even ones far from borders and ports - now offer authentic and affordable food choices from around the world. Produce departments offer year-round access to high quality fruits and vegetables that once would only have been available during the limited growing period of the U.S. harvest. These changes were driven in part by the incredible creativity and productivity of the American farmer, whose efforts have established the United States as a global leader in food production.

NAFTA (and other free trade agreements) also played an important role in this transition. By opening new markets – not only to U.S. exports, but also for imports that can plug the gap in the U.S. growing season – the U.S. has maintained and expanded the safest and most affordable food system in the world. For example, avocados, watermelons, strawberries and limes are all imported seasonally from Mexico during periods when the growing season would largely not allow an exclusively U.S. supply to meet consumer demand.

It is important to note that as trade increased between the three NAFTA countries, supply chains became increasingly integrated and interdependent. Food retail no longer just imports and sells finished goods, but rather we see inputs crossing back and forth across the borders to create new products. Shiner Beer is brewed in Texas but uses bottles from Mexico. Mexican peppers, tomatoes and onions help support food manufacturing jobs in the United States and guarantee that consumers can have access to high-quality salsa year-round. We should never ignore the dislocations that trade agreements can cause, but we also should acknowledge the reality that - by virtually all accounts - NAFTA has been a net job creator, particularly in the food and agriculture sector.

Trade agreements like NAFTA not only create good-paying manufacturing jobs in the United States, they also support the low prices consumers pay for groceries. In 2014, the United States Depart of Agriculture estimated that Americans paid only 9.7 percent of their total disposable income on food; this is down from 20 percent in 1950. This frees up income to be spent in other areas and helps fuel the U.S. economy. These low prices are especially remarkable when you consider the incredible selection of products available at your neighborhood grocery store. Consumers are paying less for a wider variety of food products; this is made possible by open markets and integrated supply chains that maximize efficiency and selection. NAFTA has been a prime driver of this process.

II. FMI Recommendations for Negotiating Objectives in NAFTA Modernization Talks

Despite the incredible success of NAFTA, it is 23 years old and due for an update. FMI is glad to see the administration moving in this direction and would offer the following principles for negotiating objectives when talks begin. Please note that these comments are specifically directed at the food and agriculture portions of the agreement and should not be construed as recommendation for other areas, unless specifically noted.

Maintain and Build on the Successes of the Agreement

As outlined above, NAFTA has been an extraordinarily successful agreement that has helped fuel lower prices and increased selection for American consumers. These gains must be maintained in any new round of talks, and we would encourage negotiators to first and foremost adopt a ‘do no harm’ approach to moving forward.

Keep NAFTA a three-party agreement – The trilateral nature of NAFTA is one of its core strengths and has helped to create a very powerful North American trading bloc. While there are certain issues that are inherently bilateral in nature (e.g. the U.S.- Mexico dispute over sugar), we urge USTR to maintain the agreement as a trilateral one and resist any calls to break it into two bilateral deals.

Maintain Current Market Access and Tariff Levels - Since 2008, trade in food and agricultural products has been largely free of tariffs and quota restrictions. This status must be maintained and the supply chains that have been created - in part because of these commitments - respected.

Country of Origin Labeling for Beef and Pork Should Not Be an Agenda Item – Country of origin labeling (COOL) for beef and pork was the subject of a longstanding dispute between the United States, Canada and Mexico. The issue was fully adjudicated in the World Trade Organization (WTO), with the end result of Congress deciding to repeal this portion of the COOL law. Some interest groups have called for COOL for pork and beef to be included as part of any new negotiations. Congress’ actions should be respected; COOL should not be revisited as part of NAFTA talks.

Modernize NAFTA By Addressing Issues That Have Developed in the Twenty-Three Years
Since It Came Into Force

Intellectual Property Protections Should Be Brought on Par With Other US Trade Agreements – While NAFTA took critical first steps in protecting US intellectual properties and protecting the United States’ role as the world’s leader in innovation, US negotiators have since been able to secure more robust IP regimes in follow-on FTAs. The negotiation should seek to upgrade these protections to reflect levels in other FTAs and promote changes in Canadian and Mexican IP laws that will keep the playing field level.

Address E-Commerce and Other Aspects of the Digital Economy – The internet was in its infancy when NAFTA came into force, and thus much of the agreement remains silent on the issues that impact this important economic sector and cross-border trade. The agreement should be modernized to reflect global best practices in the transfer of data, consumer protection (including personal data), encryption, and breach protections. A ‘new” NAFTA should also recognize the validity of electronic signatures and other electronic certifications across borders.

The Safety of GMOs and Biotech Products Should Be Explicitly Recognized in the Modernized Agreement - FMI encourages negotiators to explicitly recognize the safety of biotech products intended for food and/or feed in all three countries. To the extent that is practical, efforts should be made to harmonize approaches to biotech products and to prevent trade disputes over these goods that may impact supply chains.

Ensure NAFTA’s Longevity By Creating Certainty and Harmonization

Sanitary and Phytosanitary Measures Need to Be Transparent and Science-Based – SPS provisions should not be used as a barrier to trade. WTO protocols provide a base level of protection against this, but NAFTA needs to be updated to help protect U.S. agriculture products. These measures need to be transparent, non-discriminatory and based on sound-science. In addition, negotiators should explore updating enforcement mechanisms that allow all parties to address these barriers in a timely fashion.

Work to Ensure Consistent Food and Product Labeling Standards – The regulatory regimes that govern food labeling vary for each of the three countries, which can lead to additional costs and complexity being injected into the system. To the extent practical, negotiators should seek to harmonize these labeling standards and promote recognition across the three NAFTA countries.

Promote Customs Modernization and Improve Infrastructure at the Border – The current chapter on Customs Procedures has greatly improved the transparency of administrative procedures required for importing/exporting and reduced delays at the border. These efforts should be updated to simplify recordkeeping and auditing procedures; the development of a single NAFTA Customs document should also be explored. FMI also encourages all parties to consider sharing and integrating border facilities to help create a more efficient flow of goods and reduce the costs of administration.

III. Conclusion

A stronger NAFTA will benefit all of the parties, but especially the United States. Millions of good-paying jobs are already directly supported by the agreement, and a modernized approach that reflects the changes to the US economy that have taken place over the last 23 years will help to create many more of these opportunities. FMI commends the administration for undertaking these new negotiations and fully supports efforts to help make one of the United States’ most successful trade agreements even stronger.

Thank you for the opportunity to comment on potential negotiating objectives for the modernization of NAFTA.


Contact:
Andrew S. Harig
Senior Director – Sustainability, Tax & Trade
Food Marketing Institute
aharig@fmi.org
202-220-0628

FMI's comments to the United States Department of Agriculture (USDA) on the recently released draft of Performance-Based Work Statement (PWS) as part of a Request for Information (RFI) to solicit comments on the anticipated Request for Proposal for an Electronic or Digital Disclosure Study to implement a provision included in the National Bioengineered Food Disclosure Standard (Pub. L. 114-216).