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    Supermarket FRESH FOOD Business: COOL is a hot issue

    Complying with the looming country-of-origin labeling regulations will require careful attention and serious effort from retailers.

    By Michael F. Bavota

    The seafood industry is in the regulatory spotlight again, but this time the focus is on consumer awareness rather than on product inspection, as it was when the issue was HACCP. Supermarket operators in Florida and other states are familiar with the country-of-origin labeling (COOL) system required since 1979 for fruits and vegetables. Now, under a new federal regulation, most seafood sold in retail stores will have to be labeled with the country of origin.

    While this labeling is in an interim, voluntary phase, it will become mandatory Sept. 30, 2004. Furthermore, products that are wild or farm-raised must be marked as such. Many retailers are in the dark about this new seafood regulation, but being proactive now will help to prepare for compliance later.

    As with HACCP, the seafood industry is nervous about how much this new requirement will cost to implement. One would expect retailers to require their seafood suppliers to bear the cost and provide them with the necessary label materials. Of course, the final cost to the supplier will be passed along in cost of goods to the retailer and then to the consumer. Nevertheless, retailers will need to understand the regulations because, if imposed, noncompliance fines of $10,000 per violation per day will initially fall squarely onto their shoulders.

    Those who are familiar with reading and comprehending government regulations in the Federal Register may want to look for the complete regulation at www.ams.usda.gov/cool. There is a very helpful question and answer section.

    COOL has several key components that warrant careful attention. Here is an overview:

    Definition of a covered product and exclusions. Wild and farm-raised fish and shellfish are included in the regulation; however, all cooked and canned fish products are not. Such items are canned tuna, canned sardines, and restructured fish products like fish sticks and surimi. Products that have fish or shellfish as an ingredient, such as sushi, crab salad, and clam chowder, are excluded.

    This is important and needs to be carefully communicated to all seafood personnel. Consumers may notice the new labeling yet be unaware that the regulation exists. The best education they will receive will likely come from service counter associates. It is important that these associates fully understand which items are excluded to avoid compliance issues.

    During the next 18 months, consumers will hear and read about the regulations in the news. As usual with news reports, people may only remember the portion about "seafood" being required to have the country of origin declared. They may arrive at the store expecting all of the seafood to be labeled.

    Labeling for seafood produced exclusively in the United States. Where the U.S. is listed as the country of origin, this means that the farm-raised product, such as catfish and shrimp, must be derived exclusively from fish or shellfish hatched, harvested, and processed in this country.

    Wild fish and shellfish must be harvested in U.S. waters or by a U.S.-flagged vessel. The product must be processed in the U.S. or aboard a U.S.-flagged vessel.

    Labeling of imported products. Federal law requires that foods imported into the U.S. bear labels informing the ultimate purchaser of their country of origin. This would be the appropriate declaration to be used on the retail label. Some products may be exported to the U.S. from other countries, yet further processed here. With the exception of the products listed previously as excluded, the processor would still be required to inform the retailer of the country of origin.

    Country-of-origin notification. There are a variety of acceptable ways to satisfy the requirements. Retailers can use placards, signs, labels, stickers, and the like. The notification must be conspicuous and easy to read. In addition, the product must be identified as wild or farm-raised. A retailer that currently has a scale label that reads "Orange Roughy" can modify the label to say "Wild Orange Roughy—Product of New Zealand" and be in compliance.

    Record keeping. Now comes the part that makes retailers cringe and roll their eyes—the dreaded record keeping. Recording information takes time, and time is money. The supplier will play an important role in satisfying this requirement.

    Here is the record-keeping requirement for retailers: "Retailers must ensure that a verifiable audit trail is maintained through contracts or other means, recognizing that suppliers throughout the production/marketing chain have a responsibility to maintain the necessary supporting records." In layman's terms, "verifiable audit trail" means the retailer must have some kind of record, written or electronic, that proves he has exact knowledge of all covered product's country of origin. USDA estimates the cost to label and maintain such a paper trail throughout the supply chain to be $2 billion the first year and $1.6 billion each year after.

    As with any federal regulation that involves the food you sell in your store, the impact in terms of dollars and cents is specific to your operational methods. Retailers with high-tech record-keeping may find COOL to be just an addition to their current efforts. Some retailers may want to review the record-keeping procedures for HACCP and use them as a model to help them set up a system for a country-of-origin paper trail. Those who have voluntarily implemented HACCP may discover that recording country of origin could be added into the records of the plan.

    By Michael F. Bavota
    • About Michael F. Bavota

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