Senate Passes Bill Containing “Costly,” “Duplicative” Country-of-Origin Labeling Langauge

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Washington, D.C.The U.S. Senate has passed a bill containing language regarding country-of-origin labeling that FMI is calling “unworkable” for agricultural producers, food manufacturers, and grocery retailers. FMI is now advocating to prevent the language from passing in the U.S. House of Representatives.

FMI and 14 other food industry associations wrote a letter to members of the U.S. Senate asking them to vote “no” on the U.S. Innovation and Competition Act until the Country of Origin Labeling (COOL) Online Act requirements are removed. The letter explains that the COOL Online Act would require online sellers—including retailers that sell food through an online storefront—to include country of origin information in product descriptions on their websites and online advertisements, reflecting the origin of the exact product the customer will receive—for instance, an advertisement for blueberries would have to state the country of origin for the exact carton of blueberries a customer will receive.

The letter notes a number of problems:

  • The COOL Online Act would be inconsistent with USDA’s existing COOL program, which requires country of origin to be noted on the label of a product. This law has been enforced by USDA and U.S. Customs and Border Protection for over a decade, and the agencies report nearly universal compliance, according to the letter. The Online Act would extend enforcement authority to the FTC, confusing all involved with the system.
  • It could potentially trigger retaliatory tariffs. The letter notes that five years ago Congress amended the COOL provisions in the Agricultural Marketing Act of 1946 to exempt certain meat and pork products in response to four World Trade Organization ruling that nearly resulting in more than a billion dollars in retaliatory tariffs being levied on American products; this bill could require some of those products to provide origin labeling when sold online, but not when sold in a store. The letter states that this “disjointed labeling scheme makes little sense and could undermine important trade relationships that create market opportunities for U.S. farmers.”
  • The Act could have consequences for those experiencing food insecurity. USDA launched the SNAP online purchasing pilot program in 2019, and expanded it across the country. People nationwide are shopping from home due to the pandemic, and retailers have expanded online offerings to allow the purchase of items using SNAP benefits. Enacting these COOL requirements would create extra costs for retailers participating in SNAP online purchasing, and time delays as retailers try to become compliant.

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And in a press release, FMI notes that the COOL Online Act would create significant and costly new technology challenges for retailers. FMI Vice President, Tax, Trade, Sustainability, & Policy Development, Andy Harig, said in the press release: “The new FTC requirements, if implemented, would leave retailers with few options: making costly investments in real-time inventory tracking of every covered product in stores and online, in addition to the information on the package or product, reducing product offerings online to prevent fines and penalties under the new COOL requirements, or potentially canceling portions of customer orders if those goods cannot be sourced at the store-level with the country of origin that was advertised online. None of these options add value for U.S. consumers or the food supply chain.

Harig concluded: “Now is not the time to place additional, duplicative burdens on essential industries like food retailers with no additional benefit to customers. Online purchasing by customers has increased exponentially due to the COVID pandemic and retailers have expanded their online product offerings at significant costs to meet consumer needs. The new FTC requirements, if implemented, would leave retailers with few options: making costly investments in real-time inventory tracking of every covered product in stores and online, in addition to the information on the package or product, reducing product offerings online to prevent fines and penalties under the new COOL requirements, or potentially canceling portions of customer orders if those goods cannot be sourced at the store-level with the country of origin that was advertised online. None of these options add value for U.S. consumers or the food supply chain. The existing USDA COOL program works—it provides consumers with country-of-origin information in an efficient and cost-effective way that also has a high compliance rate from food retailers. FMI will advocate to prevent duplication and preserve the existing USDA COOL program as this legislation moves to the U.S. House of Representatives.”