January 25, 2012 Regulatory Update Report to NCC Marketing Committee Robert O. Winters

2 Agenda FSIS single ingredient meat and poultry nutrition labeling FSIS generic label approval proposed rule WTO ruling on country of origin labeling NRC/NAS recommendations on release of FSIS establishment-specific food safety data Modernization of poultry slaughter inspection system (NEW!)

Single Ingredient Meat & Poultry Nutrition Labeling Final rule new effective date: March 1, 2012 Requires nutrition labeling of: –Major cuts of single-ingredient, raw meat & poultry –Ground or chopped meat & poultry, with or without seasonings –Unless exemption applies Nutrition information required either on label or at point-of-purchase (e.g., by sign or brochure) 3

Single Ingredient Meat & Poultry Nutrition Labeling Major cuts (9 CFR ): –Whole bird (without neck & giblets) –Breast –Wing –Drumstick –Thigh Non-major cuts: –Whole bird (with neck & giblets) –“Tenders” 4

Single Ingredient Meat & Poultry Nutrition Labeling Exemptions for major cuts: –Products intended for further processing –Products no for sale to consumers –Products in individually wrapped small packages < 1 oz.  PROVIDED labels bear no nutrition claims or information Other exemptions for major cuts: –Products that are custom slaughtered or prepared –Products intended for export 5

Single Ingredient Meat & Poultry Nutrition Labeling Exemptions for ground/chopped products: –Products ground/chopped at customer’s request at retail –In packages with surface area for labeling <12 sq. inches (address/telephone number must be provided) –Products produced by small businesses that use %fat and %lean on label  PROVIDED labels bear no nutrition claims or information Other exemptions for ground/chopped products: –Products produced by a small business (per 9 CFR § (a)(1)) 6

Single Ingredient Meat & Poultry Nutrition Labeling “% Lean” claims on ground or chopped products that are not “low fat” are permitted, provided a statement of fat percentage is made that is: –contiguous to, –in same font type, size & color as, and –on same color background as lean claim 7

Generic Label Approval Proposed Rule Published on December 5, 2011 Intended to streamline generic approval process Would apply to greatly expanded categories of labels except: –Labels for temporary approval –Labels for products produced under religious exemptions –Labels for export with deviations from FSIS requirements –Labels with claims and special statements not defined by FSIS regulations/policies 8

Generic Label Approval Proposed Rule Undefined claim or special statement could be submitted in label context or in isolation, but only claim/statement would be reviewed –Health claims –Negative claims (e.g., “gluten free”) –Ingredient & processing claims (e.g., “high pressure processing”) –Structure/function claims –Organic and natural claims –Special instructions or disclaimers (“for cooking only” or “not tested for E. coli O157:H7”) –Heart graphics –Geographic landmarks 9

Generic Label Approval Proposed Rule Label eligible for generic approval must have all mandatory features as well as “well established” claims/statements: –Nutrient content claims –Claims of geographical significance (e.g., “Italian style”) –Country of origin labeling –Allergen statements –Calendar dates (e.g., “Sell by” or “Use before”) –“Fresh” claims on poultry –USDA quality-control system logo & accompanying wording –Irradiated product labeling 10

Generic Label Approval Proposed Rule Recordkeeping requirements for labeling, formulation, and processing procedures would remain FSIS would monitor compliance & review samples of generically approved labels from establishment records Comment period open until February 3, 2012 (extension likely?) 11

12 WTO Ruling on Country of Origin Labeling Provisions implemented by 2002 and 2008 Farm Bills + Vilsack letter recommending voluntary labeling Renewed challenge by Canada and Mexico after USTR settlement overturned by Obama Administration Focus on COOL labeling for cattle and hog muscle cuts

WTO Ruling on Country of Origin Labeling Dispute Settlement Body ruled in November 2011 that COOL requirements violate WTO rules: –Imported products receive less favorable treatment than domestic –“Unnecessary obstacles to international trade” because COOL was not shown to provide accurate & meaningful information to consumers –Vilsack letter was not a reasonable administration of COOL requirements US can appeal, amend COOL law/regulations, resolve, or get hit with retaliatory trade restrictions 13

14 NRC/NAS Recommendations on Data Release The Potential Consequences of Public Release of Food Safety and Inspection Service Establishment-Specific Data report released November 30, 2011 Conducted at request of FSIS to explore Internet-based release of data gathered by the agency during regulatory inspections

15 NRC/NAS Recommendations on Data Release Major findings and conclusions: –Release would increase transparency & public’s “right to know” –FSIS would benefit from consulting with other agencies that already disclose facility-specific information –Publicly released data could provide economic incentives to protect brand reputation, allow consumers to make more informed decisions, and provide better insights into food safety practices –The risks associated with release – e.g., inadvertent CBI disclosure costs of information systems, public misinterpretation – are outweighed by the benefits –Data disclosures need to be carefully designed and monitored –Release would improve food safety and ultimately result in public health benefits Unclear whether FSIS has resources to implement

Modernization of Poultry Slaughter Inspection Advance copy of proposed rule issued on Jan. 23 (90-day comment period) Would create new inspection system for young chicken and turkey slaughter establishments Would eliminate the existing Streamlined Inspection System (SIS), New Line Speed Inspection System (NELS) and New Turkey Inspection System (NTIS) Two inspection models would be available: –Proposed system –Traditional inspection 16

Modernization of Poultry Slaughter Inspection Key theme: Allow establishments more flexibility to monitor and control food safety risks in slaughter process while holding them responsible through recordkeeping sampling, and increased offline inspection Changes also would be made to traditional inspection and poultry inspection in general Waivers associated with technologies under the rule would no longer be necessary No effect on the Salmonella Initiative Project (SIP) More to come… 17

18 Questions?

Contact Information Robert O. Winters Regulatory Attorney Hogan Lovells US, LLP

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