April 24, 2002

Dear Senate Agriculture Staff:

Re:        Urgent Notice - Farm Bill Negotiations
              Country of Origin Labeling Should NOT Apply to Processed Product

We are writing today to inform you that in attempt to do something helpful for consumers, the Senate Conferees on the farm bill are attempting to cast a wide, new net upon domestic industries that choose to process food in the United States. Specifically, there is a proposal to require mandatory country of origin labeling at the retail level on the ingredients of processed food products such as pizza, soups, frozen entrees and canned tuna.

Current U.S. Country of Origin Marking Rules Are Sufficient

For the last 70 years, U.S. law has addressed the matter of country of origin marking in Section 304 of the Tariff Act of 1930. Section 304, in brief summary, requires that an imported article of foreign origin be marked to inform the ultimate purchaser of the country of origin of the article. Our industries do not object to the country of origin marking requirement, and has never done so, but it is in the interest of all U.S. businesses, that the country of origin marking requirement be administered fairly and reasonably and not be misused as a disguised barrier to trade.

Section 304 does not require, and has never required, labeling to disclose the country of origin of the foreign ingredients or materials present in the good. Such a requirement would depart from well-established and long-standing precedent under which a good is not required to be labeled for country of origin if it is transformed in the United States into a new and different article, as determined under applicable origin rules. In other words, our tariff laws, for good reason, have always applied the country of origin labeling rule to the good itself, not its components.

Ingredient Labeling For Processed Products Will Only Harm U.S. Processors

Since retailers will be unable to verify the origin of contents of packaged food products, they will simply mandate in contracts with suppliers that the package be labeled with its contents' countries of origin prior to shipping. Moreover, because these items are already labeled if they are grown or processed in a foreign country, this section puts a burden on processors that choose to use U.S. produce or locate their facilities in the United States.

Ingredient Labeling Will Confuse Consumers

The Senate proposals would serve only to confuse consumers, while burdening the processed food industry, as well as other segments of the food industry, with unnecessary costs.

To demonstrate our concern over the Senate proposal, please refer to the attached label for a typical, domestically produced frozen meat lasagna. This product includes 23 individual components. In the real world, in order to maintain consistent supply, quality and taste for its products, the processor must have multiple sources for each of these components. In some cases, suppliers of particular ingredients may be from other countries. So, for certain ingredients, suppliers may vary throughout the year depending on variations in growing season, weather phenomena, as well as cost and consistent availability, all of which must be factored into corporate procurement decisions.

Referring back to the lasagna package, Attachment 2 demonstrates an ingredient statement that includes the potential countries of origin from which each component could be sourced in today's market. As you can see, there are many countries listed here, including the U.S. and 16 others. If the United States adopts an "ingredient marking" requirement for certain ingredients, an unsound precedent would be created, here and in other countries, to do the same for any or all food ingredients. As a result, if a company were required to label each potential source of each of these components, a typical label might look like the one depicted in Attachment 2. If each package were required to show the specific country of origin of each ingredient in that particular item, as opposed to the potential options shown here, a company would have to maintain hundreds of variations of labeling for this one product.

Important Information Lost In A Sea Of Irrelevant Cataloguing

As these potential labels demonstrate clearly, country of origin marking at the ingredient level would complicate significantly the manufacture of a frozen meat lasagna or other food product because companies would be required to segregate ingredients, as well segregate finished products, in order to ensure compliance with this type of labeling requirement. Who would benefit from all this complicated and costly manufacturing process and confusing label? No one. The same concern exists for items such as peanut butter, french fries, canned tuna, fish fillets or a fish soup.

Even if the food processor is able to comply with such a labeling requirement, the average consumer shopping for a processed product will be given no additional useful information when examining an ingredient statement with ingredient country of origin labeling. A consumer who examines a complicated statement of origins for various ingredients on a food product label will be confronted with an overload of information that will not serve a useful purpose in a purchasing decision. A change in the statement necessitated by a sourcing change will not be noticed by a customer considering a repeat purchase of the same product, because the change will be lost in a sea of overly complicated country references. The actual country of origin of the good - disclosure of which is the whole purpose of Section 304 of the Tariff Act - will be reduced to an abstraction.

We urge Senators to contact their colleagues and reject the proposed mandatory country of origin labeling provision for processed products. The practical effects on the consumer will be negative, as the imposition of all this additional regulatory burden will reduce consumer choice, increase product prices, and replace intelligent information with confusing cataloguing.

Sincerely,

American Frozen Food Institute
Grocery Manufacturers of America
International Dairy Foods Association
National Fisheries Institute
National Food Processors Association
Snack Food Association