Marketing and Regulatory Programs Country of Origin Labeling Finfish & Shellfish

Marketing and Regulatory Programs Country of Origin Labeling Consumer Notification Required at Retail l Country of Origin l Wild or Farm Raised (Fish and Shellfish) l Label or notice must: –Be legible –Be in English –Not obscure other required information Consumer Notification Required at Retail l Country of Origin l Wild or Farm Raised (Fish and Shellfish) l Label or notice must: –Be legible –Be in English –Not obscure other required information

Marketing and Regulatory Programs Country of Origin Labeling Principal Components of the Proposed Rule l Who must label l What must be labeled l Determining origin l Recordkeeping Principal Components of the Proposed Rule l Who must label l What must be labeled l Determining origin l Recordkeeping

Marketing and Regulatory Programs Country of Origin Labeling Who Must Label - Retailer l Retailer has meaning given in Perishable Agricultural Commodities Act (PACA) – a business engaged in the selling of fresh and frozen fruits and vegetables at retail with an annual invoice value of more than $230,000 l Exempts food service establishments including those within retail establishments (e.g. delis and salad bars) Who Must Label - Retailer l Retailer has meaning given in Perishable Agricultural Commodities Act (PACA) – a business engaged in the selling of fresh and frozen fruits and vegetables at retail with an annual invoice value of more than $230,000 l Exempts food service establishments including those within retail establishments (e.g. delis and salad bars)

Marketing and Regulatory Programs Country of Origin Labeling Retailers l USDA would identify retailers through PACA licenses l Approximately 4,500 licensees (37,000 stores) l PACA definition excludes butcher shops, fish markets, and exporters Retailers l USDA would identify retailers through PACA licenses l Approximately 4,500 licensees (37,000 stores) l PACA definition excludes butcher shops, fish markets, and exporters

Marketing and Regulatory Programs Country of Origin Labeling Covered Commodities l Beef, Pork, Lamb – muscle cuts and ground l Fish and Shellfish (Wild and Farm Raised) l Fresh and Frozen Fruits and Vegetables l Peanuts Covered Commodities l Beef, Pork, Lamb – muscle cuts and ground l Fish and Shellfish (Wild and Farm Raised) l Fresh and Frozen Fruits and Vegetables l Peanuts

Marketing and Regulatory Programs Country of Origin Labeling Farm Raised Fish and Shellfish l Harvested in controlled or selected environments, including: –Ocean-ranched fish (e.g. penned) –Shellfish confined to managed beds Farm Raised Fish and Shellfish l Harvested in controlled or selected environments, including: –Ocean-ranched fish (e.g. penned) –Shellfish confined to managed beds

Marketing and Regulatory Programs Country of Origin Labeling Wild Fish and Shellfish l Naturally-born or hatchery-originated and released in the wild l Harvested in the wild (from non-controlled waters or beds) Wild Fish and Shellfish l Naturally-born or hatchery-originated and released in the wild l Harvested in the wild (from non-controlled waters or beds)

Marketing and Regulatory Programs Country of Origin Labeling Exclusions l Covered commodities are excluded if an “ingredient in a processed food item” l Regulation defines “processed food item” l Does not exclude covered commodities just because they have been further prepared for consumption Exclusions l Covered commodities are excluded if an “ingredient in a processed food item” l Regulation defines “processed food item” l Does not exclude covered commodities just because they have been further prepared for consumption

Marketing and Regulatory Programs Country of Origin Labeling Processed Food Item – Change of Character l A combination of ingredients that include a covered commodity that has undergone a physical or chemical change, and has character that is different from that of the covered commodity Processed Food Item – Change of Character l A combination of ingredients that include a covered commodity that has undergone a physical or chemical change, and has character that is different from that of the covered commodity

Marketing and Regulatory Programs Country of Origin Labeling Processed Food Item l Examples of covered commodities excluded because of change of character: –Oranges squeezed to make orange juice –Pork bellies cured and smoked to make bacon Processed Food Item l Examples of covered commodities excluded because of change of character: –Oranges squeezed to make orange juice –Pork bellies cured and smoked to make bacon

Marketing and Regulatory Programs Country of Origin Labeling Processed Food Item – Combination of Substantive Food Components l A covered commodity that has been combined with: –Other covered commodities –Other substantive food components, And has a character different than that of the covered commodity Processed Food Item – Combination of Substantive Food Components l A covered commodity that has been combined with: –Other covered commodities –Other substantive food components, And has a character different than that of the covered commodity

Marketing and Regulatory Programs Country of Origin Labeling Processed Food Item l Examples of covered commodities excluded because they are a combination of substantive food components: –Bagged salad (e.g. lettuce, carrots and cabbage) –Fruit trays/Vegetable trays (e.g. party trays) –Seafood medley (e.g. shrimp, scallops and clams) –Mixed nuts Processed Food Item l Examples of covered commodities excluded because they are a combination of substantive food components: –Bagged salad (e.g. lettuce, carrots and cabbage) –Fruit trays/Vegetable trays (e.g. party trays) –Seafood medley (e.g. shrimp, scallops and clams) –Mixed nuts

Marketing and Regulatory Programs Country of Origin Labeling Covered Commodities Required to be Labeled l Examples: –Solution-enhanced and seasoned pork loin –Cooked beef roast –Canned salmon –Bagged lettuce –Canned roasted and salted peanuts –Breaded shrimp Covered Commodities Required to be Labeled l Examples: –Solution-enhanced and seasoned pork loin –Cooked beef roast –Canned salmon –Bagged lettuce –Canned roasted and salted peanuts –Breaded shrimp

Marketing and Regulatory Programs Country of Origin Labeling United States Country of Origin l Wild Fish and Shellfish: Must be derived exclusively from fish or shellfish: –Harvested in U.S. waters, or by a U.S. flagged vessel; and –Processed in the U.S., or aboard a U.S. flagged vessel United States Country of Origin l Wild Fish and Shellfish: Must be derived exclusively from fish or shellfish: –Harvested in U.S. waters, or by a U.S. flagged vessel; and –Processed in the U.S., or aboard a U.S. flagged vessel

Marketing and Regulatory Programs Country of Origin Labeling United States Country of Origin l Farm-raised Fish and Shellfish: Must be derived exclusively from fish or shellfish hatched, raised, harvested, and processed in the U.S. United States Country of Origin l Farm-raised Fish and Shellfish: Must be derived exclusively from fish or shellfish hatched, raised, harvested, and processed in the U.S.

Marketing and Regulatory Programs Country of Origin Labeling Mixed Origin Product l Products with an origin that includes production steps (e.g., born, raised, slaughtered) that occurred in more than one country, including the U.S. Mixed Origin Product l Products with an origin that includes production steps (e.g., born, raised, slaughtered) that occurred in more than one country, including the U.S.

Marketing and Regulatory Programs Country of Origin Labeling Mixed Origin Product – Examples l Shrimp harvested in Mexico and processed in the U.S. l Pork from animals born in Canada and raised and slaughtered in U.S. Mixed Origin Product – Examples l Shrimp harvested in Mexico and processed in the U.S. l Pork from animals born in Canada and raised and slaughtered in U.S.

Marketing and Regulatory Programs Country of Origin Labeling Labeling Mixed Origin Product – Examples l Pork –Imported from Canada, Raised and Slaughtered in United States l Halibut – Imported from Japan, Processed in the United States Labeling Mixed Origin Product – Examples l Pork –Imported from Canada, Raised and Slaughtered in United States l Halibut – Imported from Japan, Processed in the United States

Marketing and Regulatory Programs Country of Origin Labeling Blended Products l Specific covered commodities of different origins that are combined for retail sales – (e.g., shrimp or ground beef) Blended Products l Specific covered commodities of different origins that are combined for retail sales – (e.g., shrimp or ground beef)

Marketing and Regulatory Programs Country of Origin Labeling Labeling Blended Products l Each specific origin included in the blend must be included on the label in alphabetical order Labeling Blended Products l Each specific origin included in the blend must be included on the label in alphabetical order

Marketing and Regulatory Programs Country of Origin Labeling Labeling Blended Products-Examples l Shrimp tails –Product of Mexico and Product of USA l Ground beef – Product of Australia; Imported from Mexico, Raised and Slaughtered in U.S.A.; Product of U.S.A. Labeling Blended Products-Examples l Shrimp tails –Product of Mexico and Product of USA l Ground beef – Product of Australia; Imported from Mexico, Raised and Slaughtered in U.S.A.; Product of U.S.A.

Marketing and Regulatory Programs Country of Origin Labeling Labeling Imported Covered Commodities l Imported covered commodities shall retain the origin as determined by U.S. Customs and Border Protection Labeling Imported Covered Commodities l Imported covered commodities shall retain the origin as determined by U.S. Customs and Border Protection

Marketing and Regulatory Programs Country of Origin Labeling Labeling Imported Covered Commodities – Example l Farm Raised Salmon – Product of Chile Labeling Imported Covered Commodities – Example l Farm Raised Salmon – Product of Chile

Marketing and Regulatory Programs Country of Origin Labeling Information l Suppliers must provide origin information to buyers Information l Suppliers must provide origin information to buyers

Marketing and Regulatory Programs Country of Origin Labeling Recordkeeping l Requires documentation to substantiate origin claims l Provide chain of custody information Recordkeeping l Requires documentation to substantiate origin claims l Provide chain of custody information

Marketing and Regulatory Programs Country of Origin Labeling Recordkeeping - Suppliers l Must possess or have legal access to records that substantiate origin claims l Must maintain records unique to each transaction for 2 years l Records must identify previous source and subsequent recipient of product Recordkeeping - Suppliers l Must possess or have legal access to records that substantiate origin claims l Must maintain records unique to each transaction for 2 years l Records must identify previous source and subsequent recipient of product

Marketing and Regulatory Programs Country of Origin Labeling Recordkeeping - Retailers l Must maintain for 2 years from the date of retail sales records that identify the supplier, product unique to the transaction, and the origin information l Must maintain at the store for 7 days the records that were relied on at point of sale to make origin claims l Not required to verify the accuracy of information provided by suppliers, but will be responsible if they use erroneous information that they should have suspected was incorrect Recordkeeping - Retailers l Must maintain for 2 years from the date of retail sales records that identify the supplier, product unique to the transaction, and the origin information l Must maintain at the store for 7 days the records that were relied on at point of sale to make origin claims l Not required to verify the accuracy of information provided by suppliers, but will be responsible if they use erroneous information that they should have suspected was incorrect

Marketing and Regulatory Programs Country of Origin Labeling Compliance l USDA will seek to enter into cooperative agreements with each State for retail compliance reviews l USDA would coordinate the scheduling and determine procedures for reviews Compliance l USDA will seek to enter into cooperative agreements with each State for retail compliance reviews l USDA would coordinate the scheduling and determine procedures for reviews

Marketing and Regulatory Programs Country of Origin Labeling Is There a Significant Market Failure? l Strongest case is inadequate or asymmetric information l But, no apparent barriers to private provision of COOL l Thus, no compelling market failure justification Is There a Significant Market Failure? l Strongest case is inadequate or asymmetric information l But, no apparent barriers to private provision of COOL l Thus, no compelling market failure justification

Marketing and Regulatory Programs Country of Origin Labeling Benefits l Survey findings show that COOL is of interest to majority of consumers l Experimental & survey findings identify large consumer willingness to pay for COOL l Market evidence indicates limited demand for COOL l Limitations of studies coupled with market evidence suggest only small benefits from mandatory COOL Benefits l Survey findings show that COOL is of interest to majority of consumers l Experimental & survey findings identify large consumer willingness to pay for COOL l Market evidence indicates limited demand for COOL l Limitations of studies coupled with market evidence suggest only small benefits from mandatory COOL

Marketing and Regulatory Programs Farm-Raised Shellfish l Hatchery/nursery- Provide adequate information for an auditor to verify origin of seed, eyed larvae and set cultch. ospawning records oBrood stock records oSpat collection records oProduction records oImport permits oCrop reports l Hatchery/nursery- Provide adequate information for an auditor to verify origin of seed, eyed larvae and set cultch. ospawning records oBrood stock records oSpat collection records oProduction records oImport permits oCrop reports

Marketing and Regulatory Programs Grow-Out l Segregate by origin and manner of production  Cultch purchase records  Seed transfer records  Transplant records  Crop reports  Harvest records  Seed/eyed larvae records l Segregate by origin and manner of production  Cultch purchase records  Seed transfer records  Transplant records  Crop reports  Harvest records  Seed/eyed larvae records

Marketing and Regulatory Programs Processor/Dealer l Segregate according to origin and manner of production and label  Harvest reports  HACCP Records  Receiving logs  Shipping records/bills of lading  Invoices  Tags l Segregate according to origin and manner of production and label  Harvest reports  HACCP Records  Receiving logs  Shipping records/bills of lading  Invoices  Tags