New Label Laws To Cost a COOL $4B

Oct 28, 2003

By George Anderson

New country of origin labeling (COOL) requirements could cost the food industry up to $4 billion in the first year, more than twice the original estimate, according to anonymous
sources inside the USDA.

The Associated Press reports the labels, which become mandatory in September 2004, will cost the food industry and farmers “$3.3 billion to separate pigs, cattle and sheep before
they’re slaughtered. Record-keeping would cost another $600 million. ”

The Food Marketing Institute (FMI) is among those calling for a repeal of the COOL regulations.

Tim Hammonds, president and CEO, FMI said in a released statement, “We believe USDA is making a good-faith effort to implement severely flawed law. The greatest travesty is that
this law is not needed. 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.”

Initial estimates for the cost of the program were $2 billion to track livestock and produce as they move through the supply chain.

Moderator’s Comment: What are your thoughts on the country of origin labeling law?

We share the concern of FMI and others within the industry that unintentional mistakes will happen and the fines, up to $10,000, will still fly. [George
Anderson – Moderator

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