[Federal Register Volume 79, Number 250 (Wednesday, December 31, 2014)]
[Rules and Regulations]
[Pages 79044-79062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-30472]



[[Page 79043]]

Vol. 79

Wednesday,

No. 250

December 31, 2014

Part IV





 Department of Agriculture





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 Food Safety and Inspection Service





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9 CFR Parts 317 and 381





 Descriptive Designation for Raw Meat and Poultry Products Containing 
Added Solutions; Final Rule

  Federal Register / Vol. 79 , No. 250 / Wednesday, December 31, 2014 / 
Rules and Regulations  

[[Page 79044]]


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DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Parts 317 and 381

[Docket No. FSIS-2010-0012]
RIN 0583-AD43


Descriptive Designation for Raw Meat and Poultry Products 
Containing Added Solutions

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is amending its 
regulations to require the use of a descriptive designation as part of 
the product name on the labels of raw meat and poultry products that 
contain added solutions and that do not meet a standard of identity. 
The descriptive designation will have to include the percentage of 
added solution, and the individual ingredients or multi-ingredient 
components in the solution listed in descending order of predominance 
by weight. The print for all words in the product name, including the 
descriptive designation, must appear in a single easy-to-read type 
style and color and on a single-color contrasting background. The print 
may appear in upper and lower case letters, with the lower case letters 
not smaller than one-third (\1/3\) the size of the largest letter. The 
percent solution must appear as a number (e.g., 15, 20, 30) with the 
percentage sign (%) and may be declared with the word ``containing'' or 
``contains.'' Under this final rule, the word ``enhanced'' is not 
allowed in the product name. The Agency is also removing the standard 
of identity regulation for ``ready-to-cook poultry products to which 
solutions are added''.

DATES: Effective Date: January 1, 2016.
    Applicability Date: The regulation that prescribes that the product 
name appear with the lower case letters not smaller than one-third (\1/
3\) the size of the largest letter in the product name (9 CFR 
317.2(e)(2)(iv) and 381.117(h)(4)) will be applicable on January 1, 
2018.

FOR FURTHER INFORMATION CONTACT: Ms. Rosalyn Murphy-Jenkins, Director, 
Labeling and Program Delivery Staff, Office of Policy and Program 
Development, FSIS, USDA; Telephone: (301)504-0879.

SUPPLEMENTARY INFORMATION: 

Executive Summary

    This rule requires a descriptive designation as part of the product 
name for raw meat and poultry products that contain added solutions. 
The Agency proposed changes to the labeling of these products on July 
27, 2011, in response to two petitions that requested that the Agency 
prevent consumers from being misled by the on-going marketing of added 
solution poultry products.
    FSIS, in response to the petitions and after evaluating its 
experience in reviewing labels, determined that some added- solution 
product labels that follow current labeling guidance and comply with 
current regulations are misleading because they do not clearly and 
conspicuously show that the product contains an added solution, and 
that, without updated labeling regulations that require the conspicuous 
labeling of the added solution, consumers likely cannot distinguish 
between raw single-ingredient products versus similar raw products 
containing added solution.
    Under the Federal Meat Inspection Act (FMIA) and the Poultry 
Products Inspection Act (PPIA), the labels of meat and poultry products 
must be truthful and not misleading, and the labels must accurately 
disclose to consumers what they are buying when they purchase any meat 
or poultry product. The FMIA and PPIA give FSIS broad authority to 
promulgate rules and regulations necessary to carry out the provisions 
of the Acts.
    To increase consumer awareness of the added solution and the amount 
of the added solution in raw meat and poultry products, FSIS proposed 
that the common or usual name of the product include the percentage and 
the ingredients of the added solution. In addition, the Agency proposed 
that the print for all of the words in the name, including the 
percentage and ingredients in the solution, appear in a single font 
size, color, and style of print and appear on a single-color 
contrasting background.
    This final rule requires a descriptive designation as part of the 
product name, not as part of the common or usual name of the product. 
FSIS made this change to make clear that the descriptive designation is 
required to be part of the product name but does not need to be on the 
same line as the rest of the name. The descriptive designation can be 
above, below, or next to the product name (without intervening text or 
graphics) on the principle display panel. FSIS also made this change to 
make this labeling rule more consistent with the rule concerning the 
labeling of mechanically tenderized beef products. This rule adopts all 
of the proposed rule's provisions for the listing of the individual 
ingredients or multi-ingredient components in the solution in 
descending order of predominance by weight, with the clarification that 
the added solution percentage must be a number and a percent symbol 
(e.g., 15%), and that upper- and lower-case lettering may be used, 
provided that the lower-case lettering is not smaller than one-third 
(\1/3\) the size of the largest letter in the product name. The 
requirements concerning type style, color, and background for the 
product name (including the descriptive designation) are consistent 
with those in the proposed rule. The final rule also prohibits the use 
of the word ``enhanced'' in the product name (including the descriptive 
designation) of meat and poultry products containing added solutions 
that do not meet a standard of identity.
    The final rule will result in one-time costs to establishments and 
retail facilities that produce and package raw meat and poultry 
products that contain added solutions and that do not meet a standard 
of identity. All of the costs pertain to the label modification 
procedures for the affected products, and are quantified below.

[[Page 79045]]



                 Table 1--Summary of Costs and Benefits
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                                            Lower bound     Upper bound
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                                  Costs
========================================================================
Annualized Cost (3% Discount Rate, 10 Year).............................
Annualized Cost (7% Discount Rate, 10 Year).............................
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
 Improved public awareness of product identities by providing
 truthful and accurate labeling of meat and poultry products to clearly
 differentiate products containing added solutions from single-
 ingredient products....................................................
 Consumers can better determine whether products containing
 added solutions are suitable for their personal preferences and dietary
 needs through the added solutions descriptive designation. For example,
 consumers' choices of meat and poultry products with added solutions
 with a high sodium content could have unintended health consequences if
 labels of these products were inadequate in revealing the information
 of added ingredients to the consumers..................................
 More complete label information may help consumers make more
 informed decisions leading to an increase in consumer welfare..........
------------------------------------------------------------------------

Background

    The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601-695) and 
Poultry Products Inspection Act (PPIA) (21 U.S.C. 451-470) (``the 
Acts'') provide that the labels of meat and poultry products must be 
approved by the Secretary of Agriculture, who has delegated this 
authority to FSIS, before these products can enter commerce. The Acts 
also prohibit the distribution in-commerce of meat or poultry products 
that are adulterated or misbranded. The FMIA and PPIA give FSIS broad 
authority to promulgate such rules and regulations as are necessary to 
carry out the provisions of the Acts (21 U.S.C. 621 and 463(b)).
    To prevent meat and poultry products from being misbranded, the 
meat and poultry product inspection regulations require that the labels 
of meat and poultry products contain specific information, and that 
such information be displayed as prescribed in the regulations (9 CFR 
part 317 and part 381, subpart N). On July 27, 2011, FSIS published a 
proposed rule to amend the meat and poultry regulations to establish a 
common or usual name for raw meat and poultry products that contain 
added solutions that do not meet a standard of identity (76 FR 44855). 
As FSIS explained in the proposed rule (76 FR 44856), the poultry 
products regulations include labeling requirements for ready-to-cook, 
bone-in poultry carcasses and parts with added solutions that increase 
the weight by approximately 3 percent over the raw product after 
chilling and washing (9 CFR 381.169). However, since 9 CFR 381.169 was 
codified on May 16, 1972 (37 FR 9706), and subsequently amended on 
October 7, 1974 (39 FR 36000), poultry processors developed new 
technologies that could incorporate more solution into products. In an 
effort to keep pace with industry practice and prevent false or 
misleading labeling, FSIS issued labeling guidance for raw bone-in 
poultry products that contain more than the 3 percent solution 
permitted by 9 CFR 381.169, and for boneless poultry products that 
contain added solutions. Policy Memo 042, ``Raw Bone-in Poultry 
Products Containing Added Solutions,'' (issued February 1982) provided 
that solutions may be added to raw bone-in poultry and poultry parts at 
various levels if the product name contained an appropriate qualifying 
statement. Policy Memo 044A, ``Labeling of Raw Boneless Poultry and 
Poultry Parts to Which Solutions are Added,'' (issued September 1986) 
provided for the addition of solution at any level to raw boneless 
poultry and poultry parts if the addition and the amount of solution 
were identified. FSIS also issued Policy Memo 066C, ``Uncooked Red Meat 
Products Containing Added Substances,'' (November 2004) to provide 
similar guidance for red meat products that contain added solutions.
    As discussed in the proposal (76 FR 44856), the intent of the 
policy memoranda guidance was to assist industry in developing 
truthful, easy-to-read labeling information about the solutions added 
to products, so that consumers would be aware of the added solutions 
and could make informed purchasing decisions. However, it came to the 
Agency's attention from petitions, comments submitted by the public, 
and FSIS review of labels, that some product labels are misleading 
because they do not clearly and conspicuously identify that the raw 
meat or poultry products contain added solution, and that products that 
contain added solution have the same product name as products that do 
not contain added solution. For example, the name for both a single-
ingredient chicken breast and a chicken breast with added solution is 
``chicken breast,'' even though one is 100 percent chicken, and the 
other is not. Although the labeling of the product must include a 
qualifying statement that reflects the fact that the product contains 
added solution, this fact may not be readily apparent to consumers 
because the statement is not part of the product name (76 FR 44857). 
The petitions discussed in the proposed rule are found at http://www.fsis.usda.gov/wps/portal/searchhelp/sitemap/!ut/p/a0/04_Sj9CPykssy0xPLMnMz0vMAfGjzOINAg3MDC2dDbz8LQ3dDDz9wgL9vZ2dDdx9jfQLsh0VAcILpdM!/?1dmy&current=true&urile=wcm%3Apath%3A%2Ffsis-content%2Fobsolete-archives%2Fproposed-rules%2Ffederal-proposed-rules-archive-2011.
    Therefore, to ensure that labels adequately inform consumers that 
those raw products that do not meet a standard of identity in 9 CFR 
part 319 or 9 CFR part 381, subpart P, contain added solutions, the 
Agency proposed to establish a common or usual name for such raw 
products. FSIS proposed that the common or usual name of such product 
consist of the following: an accurate description of the raw meat or 
poultry component; the percentage of any added solution incorporated 
into the raw meat or poultry product (total weight of solution 
ingredients divided by the weight of the raw meat or poultry without 
solution or any other added ingredients, multiplied by 100) using 
numerical representation and the percent symbol ``%;'' and the common 
or usual name of all individual ingredients or multi-ingredient 
components in the solution listed in descending order of predominance 
by weight.
    After the publication of the proposed rule, the Agency received a 
letter requesting a 60-day extension of the comment period, and the 
information, data, and evidence the Agency

[[Page 79046]]

considered in developing the proposed rule. On November 8, 2011, in 
response to the request to extend the comment period, the Agency 
reopened the comment period for 60 days (76 FR 69146). The Agency's 
letter responding to the request for additional information, including 
links to data and specific labels of concern is posted on its Web site 
at http://www.fsis.usda.gov/wps/wcm/connect/cf80e9a5-7e39-470f-90c9-0911402268b0/2010-0012_Response_to_AMI_508.pdf?MOD=AJPERES.
    After review and consideration of all the comments submitted, FSIS 
is amending and clarifying the July 2011 proposed amendments. As is 
explained above, this rule is necessary because we have found that 
under current regulations, some product labels are misleading because 
they do not clearly and conspicuously identify to consumers that the 
raw meat or poultry products contain added solution. Therefore under, 
this final rule, such labels would be misbranded.
    In response to comments, rather than requiring the added solution 
information as part of the common or usual name, the final rule 
requires a product name with a descriptive designation that clearly 
indicates that the product contains added solutions. The descriptive 
designation will need to appear as part of the product name on the 
principal display panel and may be above, below, or next to the product 
name (without intervening text or graphics).
    All of the print and color requirements in the final rule, i.e., a 
single easy-to-read type style and color and single-color contrasting 
background are consistent with those from the proposed rule and are 
applicable to the product name and the descriptive designation. 
However, in the final rule, FSIS made changes to the regulatory text to 
clarify that the percentage of added solution must be represented by a 
number and a percent symbol (e.g., 15%), not words (e.g., fifteen 
percent), and provide that upper and lower case lettering may be used 
for the in the product name, provided that the lower case lettering is 
not smaller than one-third (\1/3\) the size of the largest letter. Some 
added solution product labels may comply with current guidance for the 
labeling these products (Policy Memorandum 042, ``Raw Bone-In Poultry 
Products Containing Solutions;'' Policy Memorandum 044A, ``Raw Boneless 
Poultry Containing Solutions;'' and Policy Memorandum 066C, ``Uncooked 
Red Meat Products Containing Added Substances''). The labeling guidance 
provides that added solution statements must be one-fourth (\1/4\) the 
size of the largest or most prominent letter in the product name. To 
reduce costs to establishments that produce added solutions products, 
the applicability date for the one-third (\1/3\) size requirement for 
the descriptive designation is January 1, 2018.
    The Agency is also providing for the use of the words 
``containing'' or ``contains'' (e.g., ``containing 15% added solution 
of water and salt'') and prohibiting the use of the word ``enhanced'' 
in the product name (including the descriptive designation) of meat and 
poultry products containing added solutions that do not meet a standard 
of identity. The amendments and clarifications are discussed in further 
detail below in the summary of and response to comments.

Summary of and Response to Comments

    FSIS received a total of 889 comments. These were from consumers; a 
coalition representing poultry producers and consumers; consumer 
advocacy organizations; health organizations; dieticians; State and 
county departments of agriculture, weights and measures; trade 
associations that represent meat and poultry processors; an association 
of agricultural commissioners and sealers; a trade association that 
represents ingredient manufacturers; a trade association that 
represents food retailers and wholesalers; and poultry, beef, and pork 
products manufacturers. The majority of comments were identical form 
responses submitted electronically by individuals that identified their 
organization as the coalition of poultry producers and consumers or one 
of the poultry producers that belong to the coalition.

A. General Support for the Proposed Common or Usual Name Requirements

    The majority of comments generally supported the proposed 
amendments. Many commenters agreed that the current labels for meat and 
poultry products containing added solutions are misleading. Many 
commenters stated that the current solution statement is too small to 
read, and that other claims or statements on the product label make it 
difficult for consumers to differentiate between single-ingredient 
products and those with added solutions. One meat association 
acknowledged that containing statements can appear in fonts that are 
tall, slanted, and difficult to read. Many commenters stated that 
product labels should be truthful, clear, easy to read (e.g., clear 
font, size, color, and style), and easily understandable, so that 
consumers can compare products and make informed choices. These 
commenters stated that the proposed regulations accomplish these goals. 
Additionally, these commenters stated that the proposed regulations 
would ensure fair competition among retailers and manufacturers.

B. Opposition to the Proposed Common or Usual Name Requirements

    Comment: Several commenters stated that the petitions submitted by 
the Truthful Labeling Coalition (TLC) (with attached research studies) 
and the California Agriculture Commissioners and Sealers Association 
(CACSA) did not support the need for the proposed amendments, and that 
the research was limited and not compelling.
    Response: FSIS acknowledged in the proposed rule that findings 
included in the TLC petition were not generalizable but constituted 
anecdotal evidence that consumers read and use labels (76 FR 44857). 
The Sorensen Associates Research, included with the TLC petition, found 
that consumers of ``enhanced'' chicken products were not aware that the 
``enhanced'' product contained additives until they were specifically 
directed to look at the label. Even after looking at the label, nearly 
1 out of 5 ``enhanced'' chicken buyers didn't realize that the chicken 
contained additives. The CACSA petition stated that in 2006, California 
Weights and Measures officials conducted a study that indicated that 
consumers, because they pay for the solution added to products, pay an 
estimated $246 million for the added solution in California alone. 
CASCA then estimated, assuming that California has an approximate 
market share of 12 percent, that the impact to consumers nationwide is 
projected at $2 billion annually. Also, information from FSIS's 
Labeling and Program Delivery Staff's (LPDS), formerly the Labeling and 
Program Delivery Division (LPDD), review of labels and compliance 
activities indicated that some product labels do not clearly and 
conspicuously identify that the raw meat or poultry products contain 
added solution even though they meet current regulatory requirements 
and follow current guidance. The findings, projected costs from the 
CACSA petition, and label approval and compliance information were the 
best data available to the Agency.
    Comment: Several meat and poultry companies argued that the 
proposed requirements would obscure the identity of the meat or poultry 
component of their products and submitted labels to illustrate this 
point.

[[Page 79047]]

Two companies conducted consumer surveys to compare consumer 
understanding of labels that meet the current labeling requirements 
versus those that meet the proposed labeling requirements. The two 
companies stated that the surveys demonstrated that consumers preferred 
the current added-solution product labeling to the proposed required 
labeling.
    One consumer survey compared a current meat with added solution 
label with a meat with added solution label meeting the proposed 
requirements. The results of the 66 respondent survey showed that the 
79 percent of respondents agreed that the ``current'' label and the 
``proposed'' label were ``easy to understand.'' The results also showed 
that eighteen percent of the panelists responded that the current label 
``could be confusing,'' in comparison with twenty-three percent of the 
respondents that stated the proposed label was ``confusing'' (a five 
percent increase).
    The other consumer survey was conducted online with a panel of 857 
respondents. The overall results of this survey showed that 65 percent 
of the respondents preferred the current ``large'' font size label.
    Response: The majority of the label examples submitted to 
illustrate that the proposed amendments would obscure the identity of 
the meat or poultry component of their products did not accurately 
reflect the proposed requirements. The common or usual names included 
superfluous text (e.g., ``tenderness and juiciness improved''), spelled 
out percentages (e.g., ``twelve percent''), and contained only 
uppercase letters.
    The one consumer survey did not accurately represent the proposed 
requirements, and the ``current'' label's containing statement was 
considerably larger than the \1/4\ size provided in labeling guidance 
and, therefore, may have been more conspicuous to survey participants 
than product labels currently available at retail.
    Another consumer survey, conducted online, did not offer 
respondents labels that accurately represented the current labeling 
guidance versus the proposed labeling requirements. The company 
presented two versions of four different added solution product labels, 
fresh chicken breast, frozen chicken wing sections, pork loin, and 
beef. Respondents were asked to compare the labels that meet the 
current labeling guidance with the labels that meet the proposed 
requirements. Three of the four current labels appeared to have 
containing statements larger than the minimum of \1/4\ size permitted 
under the current regulation (9 CFR 381.169) and labeling guidance. The 
containing statement on three of the four labels that represented the 
proposed requirements is in upper case letters, which is not a proposed 
requirement. FSIS proposed to require the added solutions statement in 
the common or usual name. However, in response to these comments, the 
Agency is amending this final rule to provide that a descriptive 
designation that clearly indicates that the product contains added 
solution will be required on the label as part of the product name, but 
not as a part of the common or usual name. In addition, the product 
name (including the descriptive designation) may appear in upper and 
lower case letters, with the lower case letters not smaller than one-
third (\1/3\) the size of the largest letter (9 CFR 317.2(e)(2)(iii) 
and 381.117(h)(3)). Current labeling guidance for added solutions 
statements provide for a one-fourth (\1/4\) size requirement in 
comparison to the largest letter in the product name. However, the one-
third (\1/3\) size requirement is based on several regulatory 
requirements (9 CFR 319.104 and 319.105) and is consistent with the 
requirements in the Descriptive Designation for Needle- or Blade-
Tenderized (Mechanically Tenderized) Beef Products final rule.
    FSIS is also amending this final rule to require that the percent 
solution must appear as a number (such as, 15, 20, 30) and the percent 
symbol (%) (9 CFR 317.2(e)(2)(i) and 381.117(h)(1)). These amendments 
will ensure that the descriptive designation is easy to recognize and 
understand, and that the meat or poultry component of the product is 
not obscured. Also, the product name (including the descriptive 
designation) must be printed in a single easy-to-read type style and 
color and must appear on a single-color contrasting background, which 
will ensure the overall prominence of the descriptive designation on 
the label (9 CFR 317.2(e)(2)(v) and 381.117(h)(5)).
    Examples of labels that met the proposed labeling requirements were 
included in the proposed rule (76 FR 44860 and 44861). Label examples 
are included again in this final rule as guidance (Figures 1, 2, and 
3). The label in Figure 1 is an example of a product with a descriptive 
designation that includes a multi-ingredient component. The ingredients 
of the component are not declared in the descriptive designation but 
are declared in a separate ingredients statement along with all of the 
ingredients in the product (9 CFR 317.2(e)(2)(iii) and 381.117(h)(3)). 
The label in Figure 2 is an example of a product with a descriptive 
designation that includes the term ``contains'' and lists the 
individual ingredients in the added solution in descending order of 
predominance by weight (9 CFR 317.2(e)(2)(i), 317.2(e)(2)(ii), 
381.117(h)(1), and 381.117(h)(2)). The label in Figure 3 is an example 
of a descriptive designation that includes the term ``flavored with'' 
and lists the individual ingredients in the solution in descending 
order of predominance by weight (9 CFR 317.2(e)(2)(ii) and 
381.117(h)(2)).
    Comment: One commenter agreed that it is important to inform 
consumers when differences exist between single-ingredient raw meat and 
poultry products and similar raw meat and poultry products containing 
added solutions, but it did not agree with establishing a common or 
usual name to describe these differences. The commenter stated that 
there should be a general common or usual naming convention for all 
meat and poultry products. In addition, the commenter stated the 
proposed requirements would change the product names and ingredient 
declarations of secondary products in which these added solution 
products are used, resulting in complicated naming conventions for 
ordinary foods and expanding ingredient declarations.
    Response: The intent of this rule is to ensure that consumers have 
specific, clear, and conspicuous information about the percentage of 
added solution. As discussed above, although FSIS proposed to require 
that the percentage and ingredients of the added solution as part of 
the common or usual name, in response to comments, in this final rule, 
FSIS is requiring a descriptive designation as part of the product 
name, consistent with prior labeling guidance FSIS has provided in 
Policy Memoranda. The declaration of the secondary product's name and 
the product's ingredients will continue to follow the applicable 
labeling regulations.

C. Comments Opposed to Removing Ready-To-Cook Poultry Products 
Regulatory Requirements (9 CFR 381.169) and Rescinding Policy Memoranda 
for Products With Added Solutions

    Comment: Several commenters opposed removing the regulatory 
requirements and policy guidance for products with added solutions (9 
CFR 381.169; Policy Memorandum 042, ``Raw Bone-In Poultry Products 
Containing Solutions;'' Policy Memorandum 044A, ``Raw Boneless Poultry 
Containing Solutions;'' and Policy Memorandum 066C, ``Uncooked

[[Page 79048]]

Red Meat Products Containing Added Substances''). These commenters were 
specifically concerned about removing the requirement in 9 CFR 
381.169(a) that states that the added materials shall increase the 
weight of the poultry product by approximately 3 percent over the 
weight of the raw product, and the policy guidance limiting the amount 
of solution used in products labeled with the terms ``basted,'' 
``marinated,'' or ``for flavoring,'' because removing these provisions 
would result in the unbridled addition of solutions. The commenters 
also objected to removing the regulatory requirement in 9 CFR 
381.169(c) for processors to control the finished product within a 
range of three-tenths of 1 percent accuracy, using an approved plant 
control procedure.
    Response: As discussed above, FSIS explained in the proposed rule 
(76 FR 44856) that after the regulation for ready-to-cook, bone-in 
poultry (9 CFR 381.169) was codified and amended in the 1970's, poultry 
processors developed technologies, such as injecting solutions deep 
into muscle tissue, that increased the amount of solution that could be 
incorporated into products. Therefore, to provide labeling guidance for 
ready-to-cook, bone-in poultry products that contained more than the 
approximate 3 percent added solution and ready-to-cook, boneless 
poultry products with added solution, the Agency issued Policy 
Memoranda for the industry to develop truthful, easy-to-read labeling 
information so that consumers could make informed purchasing decisions. 
The Agency also later issued labeling guidance for raw red meat 
products with added solutions. The regulatory requirements provided in 
9 CFR 381.169(c) for processors to control the finished product within 
a specified range are only applicable to ready-to-cook, bone-in poultry 
products with approximately 3 percent added solution. Raw meat and 
ready-to-cook, boneless poultry products that contain added solutions, 
and ready-to-cook, bone-in poultry products that contain more than 
approximately 3 percent added solution follow the labeling guidance 
provided in the Policy Memoranda.
    FSIS does not believe, and the comments did not provide any 
evidence, that the terms ``marinated,'' ``basted,'' and ``for 
flavoring,'' provided in Policy Memoranda imply to today's consumers a 
specific level of added solution in the product. This final rule 
establishes consistent regulatory requirements for a descriptive 
designation as part of the product name for all raw meat and poultry 
products containing added solutions that do not have a standard of 
identity (9 CFR 317.2(e)(2) and 381.117(h)), regardless of the amount 
of solution or other information provided on the label. For this 
reason, the requirements in 9 CFR 381.169 are no longer needed, and 
will be deleted with this final rule. In addition, when this rule 
becomes effective, FSIS will eliminate the Policy Memoranda that 
provides labeling guidance for meat and poultry products with added 
solutions. The terms ``marinated,'' ``basted,'' ``for flavor,'' and 
``flavored with,'' may be used with any level of solution, provided 
that the product labeling contains a descriptive designation. The final 
rule includes an example of added solution product label (Figure 3) 
that uses the term ``flavored with'' in the descriptive designation.
    Comment: The commenters that opposed removing 9 CFR 381.169 and the 
FSIS Policy Memoranda for products with added solution wanted the 
Agency to retain the requirement of the method of solution introduction 
and the function of the added materials. In addition, approximately 133 
comments that had been submitted as part of a write-in campaign stated 
that FSIS should require that the method by which solutions are added 
to the product be included in the product name.
    Response: As discussed above, FSIS is deleting 9 CFR 381.169 
because it contains regulatory requirements that are outdated and 
inconsistent with industry practice. Also, FSIS has never required the 
method of addition or function of the added solution in the labeling of 
meat products or boneless poultry products. Companies use various 
methods to add solutions to meat and poultry products, and the 
solutions can have various functions. The Agency does not have any data 
suggesting that including the method of addition and function of the 
added solution in the product name provides useful information to 
consumers. Therefore, FSIS has concluded that the product name does not 
have to refer to the method of addition or the function of the added 
solution.
    Comment: Some commenters were concerned that when Policy Memorandum 
066C, ``Uncooked Red Meat Products Containing Added Substances,'' is 
rescinded, it will eliminate the limit on the addition of enzyme 
solutions (3 percent) to meat products.
    Response: The 3 percent limit for tenderizing solutions is a 
regulatory requirement (9 CFR 424.21 and 381.87(b)(25)) that is not 
affected by this final rule.
    Comment: Several commenters stated that many products with added 
solutions currently in the marketplace do not meet regulatory 
requirements or comply with labeling guidance. The commenters stated 
that the LPDS should be reviewing and ensuring the accuracy of labels 
during label review.
    Response: The LPDS reviews labels that are submitted to ensure 
compliance with the labeling regulations in 9 CFR parts 317 and 381. 
However, as provided by 9 CFR 412.2, FSIS authorizes establishments to 
use generically approved labels without submitting them for approval. 
Generically approved labels must bear all applicable mandatory labeling 
features in a prominent manner in compliance with part 317 or part 381, 
and is not otherwise false or misleading. Inspection program personnel 
periodically review products with these labels to ensure compliance 
with labeling requirements. When the LPDS receives a labeling complaint 
and determines that a label is false or misleading, FSIS contacts the 
company and advises it to make corrections. If the company does not 
make corrections, FSIS may rescind or refuse label approval under 9 CFR 
500.8, ``Procedures for Rescinding or Refusing Approval of Marks, 
Labels, and Containers.''

D. Use of the Term ``Enhanced''

    Comment: Several commenters stated that FSIS should not allow the 
use of the term ``enhanced'' in the product name of raw meat or poultry 
products that contain added solutions. These commenters stated that the 
term ``enhanced'' suggests the meat is a higher quality or that the 
meat has been improved by added solutions when it actually may contain 
increased levels of sodium, which is a concern for consumers trying to 
limit their sodium intake. These commenters also asserted that the word 
``contains'' does not imply a judgment about the product. One commenter 
recommended that FSIS prohibit the use of the word ``enhanced'' (or 
similar terms) anywhere on products containing added solutions.
    One commenter argued that the term ``enhanced'' should be permitted 
because the added solution results in a product that is juicier and has 
an improved value, quality, desirability, and attractiveness over non-
enhanced products.
    Response: FSIS agrees that the term ``enhanced'' suggests that the 
product has been increased or improved in value, quality, desirability, 
or attractiveness, based on the Merriam-

[[Page 79049]]

Webster dictionary definition.\1\ A product with added solution may or 
may not be ``juicier'' when consumed, depending on the way it is cooked 
or used. Whether or not a product with added solution is of improved 
value, quality, desirability, or attractiveness is dependent on 
individual preference. FSIS stated in the proposed rule that it 
recognized that the term ``enhanced'' could imply a judgment about the 
value of the product; for this reason, the Agency did not propose to 
include the term ``enhanced'' in the common or usual name for products 
containing added solutions (76 FR 44858). The Agency has concluded the 
term ``enhanced'' is not appropriate in the product name (including the 
descriptive designation) for raw meat and poultry products containing 
added solution and is stating in the regulatory text that the term 
``enhanced'' must not be used in the product name of meat and poultry 
products containing added solutions that do not meet a standard of 
identity. The term ``enhanced,'' however, can be used elsewhere on the 
label, e.g., in a starburst, or in advertising language.
---------------------------------------------------------------------------

    \1\ http://www.merriam-webster.com/dictionary/enhance.
---------------------------------------------------------------------------

    The Agency agrees that the word ``contains'' does not imply a 
judgment about the product, and, to provide additional clarification 
and flexibility to producers, FSIS is clarifying in this final rule 
that the words ``containing'' or ``contains'' may be used in the 
descriptive designation of raw meat and poultry products containing 
added solutions, e.g., ``containing 15% Added Solution of Water and 
Salt,'' or ``contains 15% Added Solution of Water or Teriyaki Sauce.'' 
Other terms that may be used in the descriptive designation include 
``basted'' or ``marinated,'' as listed in the foregoing sections.

E. Comments on Sodium and Salt

    Comment: Many commenters expressed the opinion that the current 
labeling of products with added solutions does not sufficiently alert 
consumers to the fact that the products contain added solutions, or the 
fact that salt is almost always included in the added solutions. One 
commenter recommended that the labels of products with added salt and 
sodium solutions contain a disclosure statement such as ``Contains 
SALT: See sodium content on the Nutrition Facts Panel.'' Another 
commenter recommended that a similar statement be displayed on raw, 
partially-heat treated, and fully cooked meat and poultry products with 
added solutions.
    However, other commenters indicated that the appropriate place for 
nutrition information, and where consumers will look for that 
information, is the Nutrition Facts panel. Additionally, some 
commenters stated that the proposed amendments would provide improved 
consumer awareness of the added ingredients, and that consumers would 
look at the ingredients statement for ingredients of concern, such as 
salt.
    Response: FSIS agrees that the Nutrition Facts panel is the 
appropriate place for the sodium content to be displayed and is where 
consumers will look for that information. This conclusion is supported 
by the 2010 Food and Health Survey conducted by the International Food 
Information Council (IFIC) Foundation,\2\ which found that 68 percent 
of consumers use the Nutrition Facts panel to obtain nutrition 
information. Additionally, the survey reported that, when asked which 
specific elements consumers use on the Nutrition Facts panel, 63 
percent of consumers mentioned the statement of sodium content. FSIS 
also agrees that the proposed amendments will alert consumers to 
products containing added solutions, and that, being so alerted, 
consumers are likely to look at the Nutrition Facts panel and the 
ingredients statement where all ingredients must be listed.
---------------------------------------------------------------------------

    \2\ Available at http://www.foodinsight.org/Content/3651/2010FinalFullReport.pdf.
---------------------------------------------------------------------------

F. Comments on Fully-Cooked or Partially Heat-Treated Products 
Containing Added Solutions

    Comment: A few commenters stated that FSIS should establish common 
or usual name requirements for non-standardized fully-cooked or 
partially-heat treated products that contain added solutions. One of 
the commenters argued that consumers need this information to make 
informed choices, because consumers will not be aware that a solution 
was added that could make up a significant portion of the product 
weight or contain significant amounts of other ingredients.
    Other commenters stated that FSIS should not establish a common or 
usual name for non-standardized fully cooked or partially-heat treated 
products that contain added solutions. The commenters stated that 
consumers understand that fully cooked or partially heat-treated 
products are not single-ingredient products, and that the required 
qualifiers, e.g., ``Breaded,'' ``Coated,'' and ``Glazed,'' alert 
consumers to any added ingredients in the products or that the products 
have been further processed in some way. One commenter expressed 
concern that it would not be appropriate to require that the common or 
usual name for these types of products include a listing of 
ingredients. One commenter suggested that FSIS, in the regulatory text, 
specifically exclude these products.
    Response: FSIS agrees with the commenters that non-standardized 
fully-cooked or partially heat-treated products, which are typically 
breaded, coated, and glazed, are obviously not single-ingredient 
products, and that consumers understand that these products may contain 
ingredients that affect the products' weight. These commenters support 
the Agency's tentative conclusion, stated in the proposed rule (FR 76 
44858), that consumers are unlikely to be misled into thinking that 
non-standardized fully cooked or partially-heated treated products that 
contain added solutions are single-ingredient products.
    The regulatory text clearly states that the requirements are for 
raw meat and poultry products that contain added solutions and that do 
not meet a regulatory standard (9 CFR 317.2(e)(2) and 381.117(h)). 
Therefore, the Agency sees no need to add regulatory text to exclude 
fully-cooked or partially-heat treated products that contain added 
solutions.

G. Comments on Retail Labeling of Products With Added Solutions

    Comment: A trade association that represents food retailers and 
wholesalers commented that the proposed rule would impose a burden on 
the supermarket industry. The association stated that retailers would 
be affected directly because it is not feasible to calculate marinade 
absorption rates at the retail level because they do not operate in the 
same manner as a Federal establishment and do not have precise 
marination times, temperatures, or solution composition; that retail 
signage would have to be altered; and that retailers would have to 
redesign labels at a very significant cost. The trade association also 
stated that the $1,557 per label cost estimate was too low.
    Response: As discussed in the proposed rule (76 FR 44859), the 
misbranding provisions of the Acts apply to all meat and poultry 
products, including products that are not subject to the inspection 
provisions of the Acts (21 U.S.C. 623(d) and 464(e)). Therefore, these 
regulations apply to raw meat and poultry products containing added 
solutions that do not meet a regulatory standard of identity and that 
are sold for retail sale, institutional use, or further

[[Page 79050]]

processing. Retail stores must comply with amendments in this final 
rule, including determining marinade absorption rates, redesigning 
labels, and altering retail signage.
    FSIS requested comment on the number of retail facilities that 
produce product containing added solution and the volume of such 
product that would be subject to the proposed requirements (76 FR 
44862). The Agency did not receive any comments addressing the number 
of facilities or the volume of product produced at retail. As discussed 
in the ``Cost and Benefits'' section below, to acquire a better cost 
estimate, the Agency utilized the March 2011 FDA labeling cost model 
and contracted for an expert elicitation on the market shares for raw 
meat and poultry products containing added solutions, including 
products produced at retail, and has adjusted the per-label cost 
estimate to $310 per label for a coordinated minor change and $4,380 
for an uncoordinated minor change. The expert elicitation concluded 
that very few products containing added solutions are produced at 
retail establishments (<5%). FSIS believes the revised label change 
cost, provided from the March 2011 labeling cost estimate, is a 
superior estimate as it represents the most detailed study available on 
the costs associated with labeling of consumer products. FSIS included 
the expected costs borne by the retailers in the final estimate.

H. Use of the Term ``Natural''

    Comment: Numerous consumers commented that products with added 
solutions should not be labeled as ``natural.'' Several commenters 
wanted FSIS to take immediate action or quickly move forward on a 
proposed rule.
    Response: Products with added solutions may meet the current FSIS 
labeling policy guidance for the term ``natural'' if (1) the product 
does not contain any artificial flavor or flavoring, coloring 
ingredient, or chemical preservative (as defined in 21 CFR 101.22), or 
any other artificial or synthetic ingredient; and (2) the product and 
its ingredients are not more than minimally processed (the practice of 
marinating or tenderizing products prior to consumption is a minimal 
process).
    The Agency is developing a proposed rule to define the ``natural'' 
claim in response to comments received on the 2009 advance notice of 
proposed rulemaking, ``Product Labeling: Use of the Voluntary Claim 
``Natural'' in the Labeling of Meat and Poultry Products'' (74 FR 
46951).

I. Compliance Date and Label Review Time

    Comment: One commenter stated that the proposed January 1, 2014, 
compliance date was excessive and unnecessary. The commenter believed 
that immediate action should be taken, and that the effective date of 
the final rule could be 30-60 days after publication of the final rule 
because labeling changes can be easily implemented by industry at a 
minimal cost.
    Another commenter stated that processors need ample time to get 
through their label inventories and requested that the status of 
products in-commerce on the effective date of the final rule be 
clarified by the Agency.
    Response: The January 1, 2014, uniform compliance date was 
applicable for meat and poultry product labeling final rules published 
between January 1, 2011 and December 31, 2012. On December 31, 2012, 
FSIS published a final rule establishing January 1, 2016, as the 
uniform compliance date for meat and poultry product labeling 
regulations issued between January 1, 2013, and December 31, 2014 (77 
FR 76824). Therefore, the effective date of this final rule is January 
1, 2016. However, as discussed above, the Agency is providing an 
applicability date of January 1, 2018 for the one-third (\1/3\) type 
size requirement for the descriptive designation to provide additional 
time and flexibility for establishments to make labeling changes. Based 
on current guidance for the labeling of these products, many 
establishments likely use one-fourth (\1/4\) type size for the 
descriptive designations or qualifying statements for products with 
added solutions. Establishments may continue to do so until January 1, 
2018.
    Comment: Several commenters expressed concern that the proposed 
amendments would overly burden the Agency's label approval process, 
especially since the proposed labeling changes could not be generically 
approved within the parameters of 9 CFR 317.5 and 381.133.
    Response: On November 7, 2013, FSIS published the final rule, 
``Prior Label Approval System: Generic Label Approval'' (78 FR 66826) 
that expands the circumstances in which FSIS generically approves meat 
and poultry labels. The labels of meat and poultry products containing 
added solutions can be generically approved, i.e., the labels do not 
have to be submitted to FSIS for approval, provided that they display 
all mandatory features in a prominent manner in compliance with part 
317 or part 381, and are not otherwise false or misleading in any 
particular (9 CFR 412.2). In addition, in May 2012, the Agency launched 
the Label Submission and Approval System (LSAS). The LSAS will have a 
significant impact on the speed and accuracy of label review.

J. Comments on Costs and Benefits of the Proposal

    Comment: A number of commenters suggested that FSIS underestimated 
the costs to the industry of the proposed amendments and did not 
accurately identify the proportion of products with added solution in 
the marketplace.
    Response: FSIS used the more up-to-date model \3\ from the 
secondary cost analysis in the proposed rule to estimate the cost of 
label changes for the industry. Although a few commenters provided 
additional cost estimates for label plates, FSIS did not receive any 
additional numbers that contradict the cost estimates presented in the 
proposed rule. FSIS continues to believe that these cost estimates are 
accurate because they represent the most detailed study available on 
the costs associated with the labeling of consumer products.
---------------------------------------------------------------------------

    \3\ Model to Estimate Costs of Using Labeling as a Risk 
Reduction Strategy for Consumer Products Regulated by the Food and 
Drug Administration, FDA, March 2011 (Contract No. GS-10F-0097L, 
Task Order 5).
---------------------------------------------------------------------------

    In the proposed rule, FSIS estimated that the proportion of 
products containing added solutions to be about 39 percent of all raw 
meat and poultry products sold (76 FR 44862). This percentage was based 
on FSIS's label review process estimates and the pounds of poultry, 
beef, and pork consumed by households. The sources cited for the pounds 
of poultry, beef, and pork consumed by household were the U.S. Poultry 
& Egg Association: Poultry Statistics, 2007; the Economic Research 
Service, USDA, U.S. Beef and Cattle Industry: Background Statistics and 
Information, 2007; and the National Pork Producers Council: Background 
Statistics and Information, 2007. However, the source of the 
information for the pounds of poultry, beef, and pork consumed by 
households should have been ``Livestock, Dairy, and Poultry Outlook,'' 
Dec. 17, 2009. The proposed rule also stated that the number of pounds 
of poultry consumed by households was 49.2 billion (76 FR 44862), that 
number, based on the corrected source information, should have been 
42.7 billion pounds.
    For a better estimate of the amount of product with added solution 
purchased, FSIS contracted for an expert elicitation on the market 
shares for raw meat and poultry products containing added

[[Page 79051]]

solutions. The results of that elicitation showed that the amount of 
product with added solution purchased is approximately 60 percent of 
the total. The cost analysis in this final rule uses this market share 
analysis.
    Comment: A number of commenters suggested that the costs associated 
for the rule would be borne by the consumer in a time of economic 
uncertainty. Conversely, a number of commenters also suggested that 
consumers unfairly pay a premium price for products with added 
solutions. Some commenters suggested that this rule will place products 
with added solutions at a competitive disadvantage to products without 
the solution.
    Response: The overall impact of the final rule on costs to the 
consumer is expected to be minimal. The estimated additional cost per 
package is between $0.0013 and $0.003. Thus, the increase in cost of 
buying two packages per week is between $.13 and $0.36 per year, and 
the consumer will only pay a portion of the this cost based on the 
relative elasticity of demand. Given the high elasticity of demand for 
this product because of the availability of close substitutes, the 
minimal cost imposed may be borne more by the producers than the 
consumers.
    FSIS has no data to determine that this rule places products with 
added solutions at a competitive disadvantage to products without the 
solution and has no evidence to suggest that the market for these 
products will be adversely impacted.
    Comment: One commenter suggested that the current labeling 
practices will result in higher health care costs.
    Response: This rule does not provide new nutrition information. 
FSIS did not quantify the health care costs and benefits of this rule.

K. Miscellaneous Comments

    Comment: One commenter recommended that all of the proposed 
requirements apply to meat and poultry products that meet standards of 
identity.
    Response: As explained in the preamble to the proposed rule, under 
this rule, meat and poultry products that comply with a standard of 
identity in the regulations will continue to be labeled as the named 
food specified in the standard. For example, ``corned beef,'' which 
includes curing solution, is allowed up to a 10 percent gain from the 
fresh weight of the uncured beef in accordance with the 9 CFR 319.100 
standard of identity for corned beef. Products that comply with this 
standard would be named and labeled as ``corned beef.'' However, if a 
product similar to ``corned beef'' includes a solution amount that is 
greater than the standard allows, the product is no longer a 
standardized product, and, under this proposed rule, it would need to 
be labeled with a descriptive designation.
    Standard of identity regulations provide requirements for added 
solutions for standardized products. Therefore, consumers likely 
understand and are aware that products with a standard of identity, 
such as corned beef or poultry roast, include solutions. The intent of 
this final rule is to eliminate confusion between single-ingredient 
products and those similar types of products that contain additional 
ingredients and solutions. Therefore, the Agency will not include 
products with a standard of identity in this rulemaking.
    Comment: FSIS received numerous comments on an array of issues 
including: Country of origin labeling for all meat, poultry, fruits, 
and vegetables; the labeling of genetically modified foods; organic 
claims; concerns over raising conditions of animals and the use of 
hormone implants; pesticides and herbicides; mandatory nutrition 
labeling for liquor products; mandatory declaration of potassium and 
phosphorus in the Nutrition Facts panel; healthy eating; and nutrition 
education.
    Response: These comments are outside the scope of this rulemaking.

Compliance With This Final Rule

    To facilitate Agency verification of compliance with regulatory 
labeling requirements, FSIS requires that establishments make labeling 
records available to any authorized USDA official upon request (9 CFR 
320.4). Inspection program personnel will perform labeling verification 
activities to ensure that establishments are complying with the 
requirements of this final rule. FSIS also performs verification and 
post-market surveillance activities in-commerce to ensure that meat and 
poultry product labels comply with all applicable regulations. The 
Agency will provide guidance on its Web site to assist establishments 
in meeting the requirements in this final rule. Figures 1 and 2 (below) 
are examples of labels of pork product containing added solutions and 
Figure 3 (below) is an example of poultry product containing added 
solution, all three examples meet the labeling requirements of this 
final rule.
BILLING CODE 3410-DM-P

[[Page 79052]]

[GRAPHIC] [TIFF OMITTED] TR31DE14.000


[[Page 79053]]


[GRAPHIC] [TIFF OMITTED] TR31DE14.001


[[Page 79054]]


[GRAPHIC] [TIFF OMITTED] TR31DE14.002


[[Page 79055]]


BILLING CODE 3410-DM-C

Executive Orders 12866 and 13563 and the Regulatory Flexibility Act

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order (E.O.) 13563 emphasizes the importance of quantifying both costs 
and benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This final rule has been reviewed under E.O. 12866. The 
Office of Management and Budget (OMB) has determined that it is a 
significant regulatory action under section 3(f) of E.O. 12866 and, 
therefore, it has been reviewed by OMB.
    The final rule will apply to all in-commerce raw meat and poultry 
products containing added solution that do not meet a standard of 
identity. The labeling requirements would apply to such products that 
are produced at federal establishments, retail facilities, such as 
grocery stores, and products produced in countries deemed equivalent 
under 9 CFR 327.2 and 381.196.
    FSIS updated the Regulatory Impact Analysis to take into account 
recently updated source data and modified timelines for implementation 
of the final rule. The changes to the costs and benefits sections 
incorporate the following factors:
     Information Resources, Inc., (IRI) scanner data was used 
to calculate the number of raw meat and poultry products in the retail 
market and the number of private and branded products. IRI gathers data 
by scanners in supermarkets, drugstores, and mass merchandisers and 
maintains a panel of consumer households that record purchases at 
outlets by scanning UPC codes on the products purchased.
     FSIS used the FDA March 2011 labeling cost model \7\ from 
the secondary cost analysis in the proposed rule to estimate the cost 
of label changes for the industry. FSIS believes the FDA March 2011 
labeling cost model represents the most detailed study available on the 
costs associated with labeling of consumer products and reflects more 
recent data than the primary analysis used in the proposed rule, and 
therefore is used in the final rule.
---------------------------------------------------------------------------

    \7\ FDA March 2011 labeling cost model: A copy of the document 
is available in the FSIS Docket Room, Patriots Plaza 3, 355 E. 
Street SW., Room 8-164, Washington, DC 20250-3700.
---------------------------------------------------------------------------

     In response to the change in compliance period when 
calculating the relabeling cost, FSIS adjusted the percentage of 
coordinated and uncoordinated label changes.

Need for the Rule

    Under FSIS's current regulatory approach, some raw products are not 
conspicuously identifying that they contain added solution. A survey 
\8\ submitted during the comment period found that only 40 percent of 
all consumers are aware that the products they purchase may contain 
added solutions, and therefore, FSIS assumes that current regulations 
are insufficient to fully inform consumers about the nature of the 
product they purchase. It is important for consumers to have readily 
available information on meat and poultry products with added solutions 
as 87 percent of chicken purchasers care if their chicken contains 
additives (Sorensen, November 2004).\9\ Fifty-four percent of the 
respondents in this study indicated they felt deceived at the 
disclosure that some chicken products include additives and 10 percent 
indicated they felt angry. This research has some limitations such as 
no reported peer review and some methodological weakness. The research 
did not provide information on response rate or sample selection which 
could contribute to survey bias. On the other hand, this study is 
strengthened by the diversity of the six primary sampling units \10\ 
and a significant sample size; moreover, its results are similar to 
those of other consumer studies.\11\
---------------------------------------------------------------------------

    \8\ Label Contaminant Statement Package Test: Study Results, 
Prepared for: Tyson Foods, Inc. by Lunt Associates. Question 10. May 
2011.
    \9\ ``Enhanced'' Chicken, Consumer Research, November 2004, SAI 
Project 04177, Sorensen Associates, Minneapolis, Minnesota (888-616-
0123), Portland, Oregon (800-542-4321).
    \10\ The research in the Sorensen Study was conducted in six 
primary sampling units; Atlanta, Chicago, San Francisco, Kansas 
City, Dallas and Seattle.
    \11\ Label Contaminant Statement Package Test: Study Results, 
Prepared for: Tyson Foods, Inc. by Lunt Associates. May 2011.
---------------------------------------------------------------------------

    FSIS, in response to stakeholder petitions and after evaluating its 
experience in reviewing labels, determined that some added-solution 
product labels that follow current labeling guidance and comply with 
current regulations are misleading because they do not clearly and 
conspicuously show that the product contains an added solution, and 
that, without updated labeling regulations that require the conspicuous 
qualifying statement, consumers likely cannot distinguish between raw 
single-ingredient products versus similar raw products containing added 
solution. A market failure exists when raw products with added 
solutions are misbranded and information is not readily available for 
the consumer. This market failure results from inadequate information 
in misbranded products and information asymmetry between producers and 
retail consumers and leads to suboptimal equilibrium quantities for 
both products containing solutions and products not containing 
solutions because consumers cannot readily identify the differences 
between the two groups. For example, the name for a single-ingredient 
chicken breast and a chicken breast with added solution is ``chicken 
breast,'' even though one is 100 percent chicken breast and one may be 
60 percent chicken breast and 40 percent solution. The new regulation 
presented in the final rule addresses the market failure by requiring 
that all labels for these types of products provide clear and 
conspicuous labeling.

Baseline

    FSIS contracted for an expert elicitation on the market shares for 
raw meat and poultry products containing added solutions (February 2012 
report).\12\ The February 2012 report, using FSIS data on the number of 
establishments that produce each type of product by species and 
establishment size and the 2010 total volume,\13\ provided estimates of 
numbers of establishments that produce products with added solutions 
only (i.e., without mechanical tenderization) and establishments that 
produce mechanically tenderized products with added solutions and 
estimates of the total volume of these products.
---------------------------------------------------------------------------

    \12\ Expert Elicitation on the Market Shares for Raw Meat and 
Poultry Products Containing Added Solutions and Mechanically 
Tenderized Raw Meat and Poultry Products. Final Report. Research 
Triangle Institute. February 2012. Available at: http://www.fsis.usda.gov/wps/wcm/connect/3a97f0b5-b523-4225-8387-c56a1eeee189/Market_Shares_MTB_0212.pdf?MOD=AJPERES.
    \13\ FSIS data estimated the 2010 total volume by multiplying 
slaughter volumes by average carcass weights.

[[Page 79056]]



                  Table 1--Estimated Number of Establishments That Produce Each Type of Product by Species and Establishment Size \14\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Species                                      Product                    Very small         Small           Large           Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
Beef...........................................  Containing added solutions only \15\...             181             218              21             420
                                                 Mechanically tenderized with added                  251             218              21             490
                                                  solutions.
Pork...........................................  Containing added solutions only........             285             439              34             758
                                                 Mechanically tenderized with added                  256             293              27             576
                                                  solutions.
Lamb and Goat..................................  Containing added solutions only........              24              29               0              53
                                                 Mechanically tenderized with added                   35              34               0              69
                                                  solutions.
Chicken........................................  Containing added solutions only........             282             371             131             784
                                                 Mechanically tenderized with added                  267             346             116             729
                                                  solutions.
Turkey.........................................  Containing added solutions only........              80             123              21             224
                                                 Mechanically tenderized with added                   75             127              21             223
                                                  solutions.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Establishments may produce multiple types of products and species and, therefore, may be represented in more than one row of the table.

    The February 2012 report also provided updated estimates for the 
proportion of products containing added solutions. The preliminary 
regulatory impact analysis estimated that the proportion of products 
containing added solutions was 39 percent (76 FR 44855-44865). Based on 
the findings of the February 2012 report, FSIS estimates that 
approximately 60 percent of all raw meat and poultry products sold 
contain added solutions. The proportions and volumes for specific 
product classes are found in Table 2.
---------------------------------------------------------------------------

    \14\ Expert Elicitation on the Market Shares for Raw Meat and 
Poultry Products Containing Added Solutions and Mechanically 
Tenderized Raw Meat and Poultry Products. Final Report. Table 3-11 
and 3-16. Available at: http://www.fsis.usda.gov/wps/wcm/connect/3a97f0b5-b523-4225-8387-c56a1eeee189/Market_Shares_MTB_0212.pdf?MOD=AJPERES.
    \15\ The expert elicitation report referred to products 
``containing added solutions'' as ``enhanced.''

         Table 2--Proportion of Raw Products Containing Added Solutions in Millions of Pounds by Species
----------------------------------------------------------------------------------------------------------------
                                                                                                     Estimated
                                                                                   Proportion of   amount of raw
                                                                                      product         product
                                                                      Volume        containing      containing
                        Product category                             produced          added           added
                                                                    (2010) \1\     solutions (%)     solutions
                                                                                        \2\          (volume *
                                                                                                    proportion)
----------------------------------------------------------------------------------------------------------------
Beef............................................................          24,300              21           5,127
Pork............................................................          21,400              57          12,134
Lamb and Goat...................................................             185              30              55
Chicken.........................................................          49,400              78          38,532
Turkey..........................................................           7,000              74           5,194
                                                                 -----------------------------------------------
    Total.......................................................         102,285              60          61,042
----------------------------------------------------------------------------------------------------------------
\1\ Numbers derived from FSIS data, as reported in the Expert Elicitation on the Market Shares for Raw Meat and
  Poultry Products Containing Added Solutions and Mechanically Tenderized Raw Meat and Poultry Products. Final
  Report. Research Triangle Institute. February 2012. Section 3.2.1 Available at http://www.fsis.usda.gov/wps/wcm/connect/3a97f0b5-b523-4225-8387-c56a1eeee189/Market_Shares_MTB_0212.pdf?MOD=AJPERES.
\2\ Id., Table 3.6. Derived by summing median estimates for ``enhanced only'' and ``mechanically tenderized and
  enhanced.''
* Totals in Estimated Amount do not necessarily add up due to rounding in Proportion of Product Containing Added
  Solutions.

    Currently, although labeling regulations and guidance state that 
the labeling of products must include a qualifying statement that 
reflects the fact that the product contains added solution, the 
statement may not be readily apparent to consumers. This is because the 
statement is not conspicuous. For example, through label review, FSIS 
has found product labels contain product names in bold fonts with 
strong contrasting backgrounds, with the qualifying statement on added 
solution printed in narrow or slanted fonts at the smallest height 
permitted, and on background of poor color contrast. While such 
labeling may be consistent with existing Agency regulations and 
guidance, it does not clearly identify to consumers that the product 
contains added solutions. This rule addresses these issues.
    The final rule will apply to all in-commerce raw meat and poultry 
products containing added solution that do not meet a standard of 
identity. These products will require a new label in order to comply 
with the final rule.
    A March 2011 FDA report \16\ defines all labeling changes as minor, 
major, or extensive. A minor change is one in which only one color is 
affected, and the label does not need to be redesigned. Examples of 
this type of change include changing an ingredient list or adding a 
toll-free number. A major change requires multiple color changes and 
label redesign. An example of a major change is adding a facts panel or 
modifying the front of a package. An extensive change is a major format 
change requiring a change to the product packaging to accommodate 
labeling information. An example of an extensive change is adding a 
peel-back label or otherwise increasing the

[[Page 79057]]

package surface area. FSIS estimates the cost of label modification to 
accommodate the requirements of this final rule to fall into the minor 
category.
---------------------------------------------------------------------------

    \16\ Model to Estimate Costs of Using Labeling as a Risk 
Reduction Strategy for Consumer Products Regulated by the Food and 
Drug Administration, FDA, March 2011 (Contract No. GS-10F-0097L, 
Task Order 5).
---------------------------------------------------------------------------

    The March 2011 FDA Report divides the minor category into minor 
coordinated and minor uncoordinated changes based on the assumption 
that all products are typically relabeled at least as often as every 3 
to 4 years. The cost estimate is $310 per label (with a range of $170 
to $440) for minor coordinated changes and $4,380 per label (with a 
range of $2,417 to $7,330) for minor uncoordinated changes.\17\ The 
model, defined in the report, assigns additional costs, e.g. labor, to 
any change that does not fall into this 3 to 4 year period and is 
designated to be an uncoordinated change that requires additional cost 
attributes.
---------------------------------------------------------------------------

    \17\ FDA March 2011 labeling cost model: A copy of the document 
is available in the FSIS Docket Room, Patriots Plaza 3, 355 E. 
Street SW., Room 8-164, Washington, DC 20250-3700.
---------------------------------------------------------------------------

    This rule will affect foreign establishments that manufacture and 
export raw meat or poultry products containing added solutions to the 
United States, the same as it affects U.S. establishments. The labeling 
costs for the affected foreign establishments are captured in the total 
costs outlined later in this analysis. However, these products are not 
typically imported; based on label review data,\18\ the amount of raw 
meat and poultry products containing added solutions imported into the 
United States is estimated to be less than 1 percent of the products 
imported into the United States. For the purposes of this analysis, 
FSIS assumes that the majority (>99.0 percent) of the affected products 
are domestically produced.
---------------------------------------------------------------------------

    \18\ Source: FSIS Labeling and Program Delivery Staff.
---------------------------------------------------------------------------

Regulatory Alternatives

    We have identified three regulatory options for this rule.

    1. Require or propose the use of ``enhanced'' in the containing 
statement;
    2. The final rule, except no requirement on background color for 
the qualifying statement;
    3. Amend FSIS regulations to establish a common or usual name 
for raw meat and poultry products that contain added solutions; and
    4. The final rule.

1. Require the Use of ``Enhanced'' in the Containing Statement

    Under this alternative, FSIS would require the word ``enhanced'' in 
the qualifying statement, or propose the use of the term ``enhanced'' 
in the containing statement, e.g., ``enhanced with a 15% solution . . 
.''
    FSIS did not select this alternative to require the word 
``enhanced'' in the qualifying statement because the word implies that 
the product is improved by the addition of the solution. The intent of 
this rule is to increase transparency to consumers, not to suggest that 
the product is either better or worse than a raw product without the 
added solution. The cost for this alternative is the same or slightly 
less than the preferred alternative; however benefits for consumers may 
be reduced as a result of decreased transparency of products with and 
without added solutions.
    In addition, consumer research (Sorensen, November 2004)\19\ showed 
that the containing statement, ``enhanced with up to 15% solution of 
water, salt, and sodium phosphates'' was preferred by fewer study 
participants (about 10% fewer) than the use of the description 
``contains up to 15% water, salt, and sodium phosphates.''
---------------------------------------------------------------------------

    \19\ Enhanced'' Chicken, Consumer Research, November 2004, SAI 
Project 04177, Sorensen Associates, Minneapolis, Minnesota (888-616-
0123), Portland, Oregon (800-542-4321).
---------------------------------------------------------------------------

2. Final Rule, Except No Requirement on Background Color for the 
Qualifying Statement

    Under this alternative, the color and style of the product's 
qualifying statement is not required on a single-color contrasting 
background. FSIS would still require the qualifying statement to 
include an accurate description of the raw meat or poultry component, 
the percentage of added solution, and the common or usual names of the 
ingredients in the solution, with all of the print in a single font 
size.
    FSIS did not select this alternative because the benefits would 
likely be reduced. A benefit of this rule is to help consumers 
determine whether products containing added solutions are suitable for 
their personal preference and dietary needs. Removing the requirement 
for background color choice would decrease transparency, as a result of 
the reduction in contrast, to consumers.
    The cost for this alternative is slightly less than the preferred 
alternative because some existing labels already meet these 
requirements. FSIS does not have supporting data to estimate the 
precise number of labels in compliance with this alternative, but we 
expect the number is minimal. FSIS expects reduced benefits from this 
alternative as consumers are less likely to distinguish products with 
and without added solutions, resulting in less informed decisions. 
Consumers would not fully benefit from improved consumer awareness and 
understanding that raw meat or poultry products may contain added 
solutions.

3. Amend FSIS Regulations To Establish a Common or Usual Name for Raw 
Meat and Poultry Products That Contain Added Solutions

    Under this alternative, the common or usual name for a raw meat or 
poultry product that contains an added solution would need to include 
the percentage of added solution, and list the individual ingredients 
or multi-ingredient components of the solution in descending order of 
predominance by weight. Also, FSIS considered finalizing the proposed 
provisions that would require that the print for all words in the 
common or usual name appear in a single font size, color, and style of 
print. As discussed above, after considering the comments, FSIS 
concluded that the proposed requirements were more onerous and stricter 
than necessary. Therefore, FSIS did not select this alternative and 
made changes to the proposed rule to provide more flexibility and more 
consistency with other labeling regulations.

4. The Final Rule

    Under this alternative, FSIS would require that the qualifying 
statement includes an accurate description of the raw meat or poultry 
component, the percentage of added solution, and the common or usual 
names of the ingredients in the solution, with all of the print in a 
single font size, color, and style on a single-color contrasting 
background.
    FSIS selected this alternative because it is preferred to the other 
alternatives and is likely to improve consumer awareness and 
understanding that the raw meat or poultry product contains an added 
solution. The percentage of the solution and the ingredients of the 
solution included in a qualifying statement is information consumers 
need to make informed purchasing decisions.

Expected Cost of the Final Rule

    The final rule will result in one-time costs to establishments and 
retail facilities that produce and package raw meat and poultry 
products containing added solutions. Producers may bear most of the 
cost burden, not the consumers, given the high elasticity of demand for 
this product because of the availability of close substitutes. All of 
the costs pertain to the label modification procedures for the affected 
products. The estimated cost of modifying labels is determined by the 
number of label plates or digitized label

[[Page 79058]]

templates required to be modified and the average cost of modifying 
labels. This methodology provides an estimated cost for all labels of 
products with added solution in-commerce, including those for retailers 
and foreign entities that sell meat and poultry in the United States.

Market Share

    FSIS has updated the estimates for the proportion of products 
containing added solutions to reflect the data received in the February 
2012 report. Based on the findings of the report, FSIS estimates that 
approximately 61.0 billion pounds or 60 percent of the 102.3 billion 
pounds of meat and poultry products produced by federally inspected 
establishments in the U.S. contain added solutions (Table 2). The 
February 2012 report applies the estimate to the estimated pounds of 
enhanced-only products and mechanically tenderized and enhanced 
products by species, packaging, and labeling type. Based on this data, 
FSIS is able to estimate (Table 3) the breakdown by percentage of 
labels for products containing added solutions in the marketplace.\20\
---------------------------------------------------------------------------

    \20\ Expert Elicitation on the Market Shares for Raw Meat and 
Poultry Products Containing Added Solutions and Mechanically 
Tenderized Raw Meat and Poultry Products. Final Report. Tables 3-15 
and 3-16. Available at: http://www.fsis.usda.gov/wps/wcm/connect/3a97f0b5-b523-4225-8387-c56a1eeee189/Market_Shares_MTB_0212.pdf?MOD=AJPERES.

              Table 3--Percent of Enhanced-Only and Mechanically Tenderized and Enhanced Products by Species, Packaging, and Labeling Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               Pork*      Lamb and goat*      Chicken         Turkey          All*\1\
               Packaging or labeling type                 Beef (percent)     (percent)       (percent)       (percent)       (percent)       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Brand Name Label for Retail Sales.......................              21              35              34              36              38              35
Private Label for Retail Sales..........................              22              31              27              22              22              24
Foodservice.............................................              51              30              38              37              35              37
Retail..................................................               6               5               2               5               5               5
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Unweighted average.
* Totals do not necessarily add up due to rounding.

Costs for Label Modification

    IRI scanner data indicate that there are 13,697 \21\ raw meat and 
poultry labels in retail, 16.39 percent (or 2,245) of which are private 
label, with the remainder (or 11,452) branded. Although IRI's 
geographic coverage--which includes the largest urban areas in the U.S. 
and a few whole states--may yield a reasonable estimate of the universe 
of branded retail labels, a substantial number of chains that are large 
enough to have their own private labels but that only serve small or 
medium-sized cities may be missed. For this reason, the IRI results 
will be used as a lower bound on the number of retail labels affected 
by this rule. To estimate an upper bound, we make use of the estimates 
in Table 3, to calculate that 37.5 percent (24%/[35% + 24% + 5%]) of 
retail labels may be private label. In this case, there are an 
estimated 6,871 private retail labels and 18,323 (11,452 + 6,871) total 
retail labels. Because the IRI scanner data do not capture food service 
labels, these estimates must be adjusted upward; based on the contents 
of Table 3, about 37 percent of all meat and poultry products are for 
food service. From this, FSIS estimates about 37 percent of meat and 
poultry labels are for food service and the remaining 63 percent of 
label are for retail, yielding estimates of 21,741 (13,697/63%]) to 
29,084 (18323*/63%) raw meat and poultry product labels in the 
marketplace. The market share of raw meat and poultry products that 
contain added solutions is estimated to be 60 percent. Therefore, FSIS 
estimates approximately 13,045 (21,741 * 60%) to 17,450 (29,084 * 60%) 
unique labels for meat and poultry raw products containing added 
solution in-commerce.
---------------------------------------------------------------------------

    \21\ Information Resources, Inc, (IRI) scanner data was used to 
calculate the number of raw meat and poultry products in the retail 
market. IRI gathers data by scanners in supermarkets, drugstores, 
and mass merchandisers and maintains a panel of consumer households 
that record purchases at outlets by scanning UPC codes on the 
products purchased.
---------------------------------------------------------------------------

    This cost analysis uses the label design modification costs for a 
minor coordinated label change and a minor uncoordinated label change 
as defined in the March 2011 FDA Report.\22\ The use of the label 
design modification costs for minor coordinated and uncoordinated label 
changes are further supported by the 2-year compliance increments 
defined in the FSIS regulation titled ``Uniform Compliance Date for 
Food Labeling Regulations.'' \23\ That regulation helps affected 
establishments minimize the economic impact of labeling changes because 
affected establishments possibly could incorporate multiple label 
redesigns required by multiple Federal rules into one modification 
during the 2-year increments. Moreover, the ``Uniform Compliance Date 
for Food Labeling Regulations'' allows establishments time to use 
existing labels and would, therefore, result in minimal loss of 
inventory of labels, if any. In other words, the ``Uniform Compliance 
Date for Food Labeling Regulations'' increases the number of 
establishments that can incorporate new requirements as a coordinated 
change, which reduces the cost of complying with the final regulation. 
(For example, FSIS is simultaneously developing a final rule that would 
require additional labeling for beef products that are mechanically 
tenderized. The cost associated with the labels for mechanically 
tenderized beef products containing added solutions are lessened if 
both rules' changes are required as of the same Uniform Compliance 
Date.)
---------------------------------------------------------------------------

    \22\ Model to Estimate Costs of Using Labeling as a Risk 
Reduction Strategy for Consumer Products Regulated by the Food and 
Drug Administration, FDA, March 2011 (Contract No. GS-10F-0097L, 
Task Order 5).
    \23\ 77 FR 76824.
---------------------------------------------------------------------------

    The labeling cost model states that the allocation of label changes 
between coordinated and uncoordinated depends on the compliance period 
allowed by the regulation under consideration. For some products 
affected by this rule, the only necessary label change is an increase 
in the formatting of the descriptive designation so that the size of 
the smallest letter is at least one-third, rather than just one-fourth, 
the size of the largest letter; the cost impact for such products would 
be appropriately analyzed using the model's results for a 36-month 
compliance period (100% of branded and 57% of private label changes 
able to be coordinated). On the other hand,

[[Page 79059]]

many products--including the ones currently labeled with term 
``enhanced''--will be subject to a 12-month compliance period (for 
which the model shows 11% of branded and 5% of private label changes 
can be coordinated). In the absence of data on the portion of products 
that will need to have label changes in 12 months and the portion that 
will need to have label changes in 36 months, we present results using 
only the 12-month estimates, acknowledging that this approach leads to 
an overstatement of the actual rule-induced costs.
    The mid-point label design modification costs for a minor 
coordinated label change is an estimated $310 per label (with a range 
of $170 to $440) and $4,380 per label (with a range of $2,417 and 
$7,330) for a minor uncoordinated change.\24\ Using these costs for the 
number of minor coordinated and uncoordinated changes in branded and 
private modified labels from Table 4, FSIS estimates that the one-time 
total cost of modifying labels for all federally inspected processors 
is between $52 and $84 million as lower and upper bound estimates. Over 
a ten year period, the lower and upper bound annualized cost for the 
industry is $5.9 and $9.6 million at a 3 percent discount rate (DR) 
over ten years and $6.9 and $11 million at a 7 percent DR over ten 
years.
---------------------------------------------------------------------------

    \24\ All costs are shown in 2010 Dollars.
---------------------------------------------------------------------------

    The relabeling cost estimate is an overestimate for several reasons 
beyond those already discussed. The model used to calculate the cost 
for updating food labels encompasses all food labels products, 
including FDA food labels. Information from FSIS's Labeling and Program 
Delivery Staff's (LPDS) determined label changes for FSIS products 
occur more frequently than the model indicates, resulting in an 
overestimate of costly uncoordinated changes. Additionally, the 
relabeling estimate includes all unique labels with added solutions 
while many products with added solutions are already in compliance with 
regulations provided in this rule. For these reasons, FSIS considers 
the relabeling cost estimate an overestimate.

     Table 4--Relabeling Cost for Meat and Poultry Products With Added Solutions, 12 Month Compliance Period
----------------------------------------------------------------------------------------------------------------
                                      Branded         Private                          Cost
           Lower bound           -------------------------------------------------------------------------------
                                      10,907           2,138           Lower            Mid            Upper
----------------------------------------------------------------------------------------------------------------
Coor Chg........................       1,200 11%          107 5%        $222,129        $405,059        $574,922
Uncoor Chg......................       9,707 89%       2,031 95%      28,371,037      51,412,967      71,154,236
                                 -------------------------------------------------------------------------------
    Total Lower Bound Cost......  ..............  ..............      28,593,166      51,818,026      71,729,158
                                 ===============================================================================
Annualized Cost (3% DR, 10 Year)  ..............  ..............       3,254,360       5,897,722       8,163,928
Annualized Cost (7% DR, 10 Year)  ..............  ..............       3,804,695       6,895,066       9,544,503
----------------------------------------------------------------------------------------------------------------


 
                                      Branded         Private                          Cost
           Upper bound           -------------------------------------------------------------------------------
                                       7,670           3,464           Lower            Mid            Upper
----------------------------------------------------------------------------------------------------------------
Coor Chg........................       1,944 11%          173 5%         359,879         656,250         931,452
Uncoor Chg......................      15,727 89%       3,291 95%      45,964,902      83,295,933     139,397,075
                                 -------------------------------------------------------------------------------
    Total Upper Bound Cost......  ..............  ..............      46,324,781      83,952,183     140,328,526
                                 ===============================================================================
Annualized Cost (3% DR, 10 Year)  ..............  ..............       5,272,502       9,555,104      15,971,635
Annualized Cost (7% DR, 10 Year)  ..............  ..............       6,164,118      11,170,937      18,672,547
                                 -------------------------------------------------------------------------------
Minor Coordinated...............  ..............  ..............             170             310             440
Minor Uncoordinated.............  ..............  ..............           2,417           4,380           7,330
----------------------------------------------------------------------------------------------------------------

    The cost of modifying the labels is small relative to the total 
volume of meat and poultry products. On a per pound basis, the upper 
bound one-time cost for this rule is $.0014/per pound ($83 million/61.0 
billion pounds). Further, the 2010 National Meat Case Study \25\ found 
that the average number of pounds per package in the market place is 2 
pounds. In the study, chicken and pork packages tended to be slightly 
heavier at 2.5 and 2.1 pounds respectively. Therefore, by applying a 
range of 1.5 to 2.5 pounds per package to the low and high range mid-
point cost estimates, the estimated additional cost per package is 
between $.0013 and $.003. This cost is only incurred once and would be 
even smaller if annualized (per package) over future years.
---------------------------------------------------------------------------

    \25\ 2010 National Meat Case Study Executive Summary. Accessed 
here: http://www.beefretail.org/CMDocs/BeefRetail/research/2010NationalMeatCaseStudy.pdf.
---------------------------------------------------------------------------

FSIS Budgetary Impact of the Final Rule

    This final rule will result in no impact on the Agency's 
operational costs because the Agency will not need to add any staff or 
incur any non-labor expenditures.

Expected Benefits of the Final Rule

    FSIS anticipates benefits for the consumer such as improved 
consumer awareness and understanding that raw meat or poultry products 
may contain added solutions. This may increase consumer welfare.
    The rule will likely improve public awareness of product identities 
by providing truthful and accurate labeling of meat and poultry 
products to clearly differentiate products containing added solutions 
from single-ingredient products. As noted in the need for rule 
sections, nearly 60 percent of consumers are unaware that meat and 
poultry products contain added solutions. Therefore, 60 percent of 
consumers purchasing a chicken containing 15 percent added solution are 
unaware they are purchasing a product that is 85 percent chicken and 15 
percent added solution. Providing truthful and

[[Page 79060]]

accurate information on the label allows consumers to compare value 
among such products and make a more informed purchasing decision.
    Consumers can better determine whether products containing added 
solutions are suitable for their personal preferences and dietary needs 
through the added solutions qualifying statement. Consumers' choices of 
meat and poultry products with added solutions with a high sodium 
content could have unintended health consequences if labels of these 
products were inadequate in revealing the information of added 
ingredients to the consumers. For example, a raw chicken breast 
containing added solutions averages an additional 333 mg of sodium than 
chicken without added solutions, (122mg-455mg).\26\ High intakes of 
sodium are directly associated with elevated blood pressure leading to 
risks of cardiovascular disease (CVD) and stroke.\27\ While some 
research \28\ suggests a U-shape relationship between sodium and health 
with favorable sodium intake between 2,645 and 4,945 mgs, a Nutrition 
Impact Model developed by Tim Dall estimates 1.5 million fewer cases of 
hypertension with a potential annual savings of $2.3 billion if adults 
with uncontrollable hypertension reduced their daily sodium intake by 
400 mg.\29\
---------------------------------------------------------------------------

    \26\ U.S. Department of Agriculture, Agricultural Research 
Service. 2013. USDA National Nutrient Database for Standard 
Reference, Release 26. Nutrient Data Laboratory Home Page, available 
at: http://ndb.nal.usda.gov/ndb/.
    \27\ Institute of Medicine (IOM) of the National Academies. 
``Sodium Intake in Populations: Assessment of Evidence (2013), 
Chapter 4: Sodium Intake and Health Outcomes,'' Washington, DC: 
National Academies Press; 2013. pp.57.
    \28\ N. Graudal, G. Jurgens, B. Baslund, M.H. Alderman. Compared 
With Usual Sodium Intake, Low- and Excessive-Sodium Diets Are 
Associated With Increased Mortality: A Meta-Analysis. American 
Journal of Hypertension, 2014; DOI: 10.1093/ajh/hpu028.
    \29\ Dall, T.M., V.L. Fulgoni III, Y. Zhang, K.J. Reimers, P.T. 
Packard, and J.D. Astwood. 2009. Potential health benefits and 
medical cost savings from calorie, sodium, and saturated fat 
reductions in the American diet. American Journal of Health 
Promotion. 23 (6), 12-22.
---------------------------------------------------------------------------

    Additionally, it is estimated that there are about 3 million pre-
hypertensive and hypertensive persons in the US population.\30\ A 
consumer research study indicates that 39% of consumers read but do not 
understand current labels,\31\ and an FDA consumer study estimates that 
49% of consumers would read and be able to understand new labels.\32\ 
Considering that difference and the estimates of pre-hypertensive and 
hypertensive adults in the U.S. population, about 1 million individuals 
may be able to better understand and apply the new label information 
and, thereby, be better able to stay within their dietary salt intake 
requirements.
---------------------------------------------------------------------------

    \30\ Estimate is derived using U.S. Census Bureau, 2013 
population estimates and studies that indicate that about 31% of 
American adults have high blood pressure (CDC. Vital signs: 
awareness and treatment of uncontrolled hypertension among adults--
United States, 2003-2010. MMWR. 2012;61(35):703-9) and an additional 
one in three have prehypertension (Go AS, Mozaffarian D, Roger VL, 
et al. Heart disease and stroke statistics--2013 update: a report 
from the American Heart Association. Circulation. 2013;127:e6-245).
    \31\ Label Contaminant Statement Package Test: Study Results, 
Prepared for: Tyson Foods, Inc. by Lunt Associates. Question 10. May 
2011.
    \32\ FDA. ``Consumer Behavior Research 2008 Health and Diet 
Survey'' Topline Frequencies. Question C3. Available at: http://www.fda.gov/Food/FoodScienceResearch/ConsumerBehaviorResearch/ucm193895.htm.
---------------------------------------------------------------------------

    More complete label information should increase consumer welfare. 
Based on 2009-2010 National Health and Nutrition Examination Survey 
data, NHANES, 46 percent of consumers rarely or never read food labels 
when buying raw meat, poultry or fish products.\33\ Of the consumers 
who rarely or never using food labels, 21 percent specified they are 
not checking food labels because they did not know what to look for. 
Results from the 2008 Health and Diet Survey indicated 29 percent of 
respondents who never read food labels are not using labels because it 
is hard to understand. The new requirements in this rule may make it 
easier for consumers to understand the label and identify what to look 
for. Providing more complete label information, currently unavailable 
in the marketplace, will reduce transaction costs for consumers trying 
to satisfy individual dietary or other preferences. Consumers with 
complete information will be better able to discriminate between 
products with added solutions and those without and select the products 
they prefer, resulting in an increase in consumer welfare.
---------------------------------------------------------------------------

    \33\ NHANES. 2013 ``Questionnaires, Datasets, and Related 
Documentation'' Center for Disease Control and Prevention. Accessed 
on 6/16/2014. Available at: http://www.cdc.gov/nchs/nhanes/nhanes_questionnaires.htm.
---------------------------------------------------------------------------

Regulatory Flexibility Analysis

    The FSIS Administrator certifies that, for the purposes of the 
Regulatory Flexibility Act (5 U.S.C. 601-602), the final rule will not 
have a significant economic impact on a substantial number of small 
entities in the United States.
    There are about 6,099 federally inspected establishments, of which 
2,616 are small (with 10 or more but less than 500 employees), and 
3,103 are very small (with fewer than 10 employees) based on the 
classifications outlined in the Pathogen Reduction; Hazard Analysis 
Critical Control Point (HACCP) final rule (61 FR 38819). Hence, more 
than 90 percent of the federal establishments \34\ that produce meat 
and poultry products with added solutions which could possibly be 
affected by this rule are small or very small according to the FSIS 
HACCP definition.
---------------------------------------------------------------------------

    \34\ Expert Elicitation on the Market Shares for Raw Meat and 
Poultry Products Containing Added Solutions and Mechanically 
Tenderized Raw Meat and Poultry Products. Final Report. Table 3-11. 
Available at: http://www.fsis.usda.gov/wps/wcm/connect/3a97f0b5-b523-4225-8387-c56a1eeee189/Market_Shares_MTB_0212.pdf?MOD=AJPERES.
---------------------------------------------------------------------------

    In the cost analysis above, FSIS estimated that the total upper and 
lower bound one-time cost for the industry is about $52 to $84 million. 
This results in an average one-time cost per establishment of about 
$8496 ($52 million/6,099 establishments) to $13765 ($84 million/6,099) 
or $967 to $1567 annualized (3 percent, 10 years). The small and very 
small establishments produce less output and fewer unique labels, and 
therefore their average one-time cost per establishment will be lower. 
Thus, FSIS believes that the cost to small and very small 
establishments of providing modified labels for the meat and poultry 
products with added solutions will be negligible.

Executive Order 13175

    This final rule has been reviewed in accordance with the 
requirements of Executive Order 13175, ``Consultation and Coordination 
with Indian Tribal Governments.'' FSIS has concluded, on the basis of 
its evaluation, that this final rule will not have substantial and 
direct effects on Indian Tribes, on the relationship between the 
Federal Government and Indian Tribes, or on the distribution of power 
or responsibilities between the Federal Government and Indian Tribes. 
Nonetheless, FSIS will include Tribes and intertribal organizations, 
involved in or interested in the meat and poultry sectors, in the 
Agency's outreach efforts associated with implementation and 
administration of this final rule.

Executive Order 12988 Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Under this rule: (1) All State and local laws and 
regulations that are inconsistent with this rule will be preempted; (2) 
no retroactive effect will be given to this rule; and (3) no 
retroactive proceedings will be required before parties may file suit 
in court challenging this rule.

[[Page 79061]]

Paperwork Reduction Act

    In accordance with section 3507(d) of the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.), the information collection or record 
keeping requirements included in this final rule have been submitted 
for approval to the Office of Management and Budget (OMB). This 
information collection request is at OMB awaiting approval. FSIS will 
collect no information associated with this rule until the information 
collection is approved by OMB.
    Copies of this information collection assessment can be obtained 
from Gina Kouba, Paperwork Reduction Act Coordinator, Food Safety and 
Inspection Service, USDA, 1400 Independence Avenue SW., Room 6083, 
South Building, Washington, DC 20250-3700; (202) 690-6510.

E-Government Act

    FSIS and USDA are committed to achieving the purposes of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things, 
promoting the use of the Internet and other information technologies 
and providing increased opportunities for citizen access to Government 
information and services, and for other purposes.

Additional Public Notification

    FSIS will announce this rule online through the FSIS Web page 
located at http://www.fsis.usda.gov/wps/portal/fsis/topics/regulations/federal-register/interim-and-final-rules.
    FSIS will also make copies of this Federal Register publication 
available through the FSIS Constituent Update, which is used to provide 
information regarding FSIS policies, procedures, regulations, Federal 
Register notices, FSIS public meetings, and other types of information 
that could affect or would be of interest to constituents and 
stakeholders. The Update is communicated via Listserv, a free 
electronic mail subscription service for industry, trade groups, 
consumer interest groups, health professionals, and other individuals 
who have asked to be included. The Update is also available on the FSIS 
Web page. In addition, FSIS offers an electronic mail subscription 
service which provides automatic and customized access to selected food 
safety news and information. This service is available at http://www.fsis.usda.gov/wps/portal/fsis/programs-and-services/email-subscription-service. Options range from recalls to export information 
to regulations, directives and notices. Customers can add or delete 
subscriptions themselves, and have the option to password protect their 
accounts.

USDA Nondiscrimination Statement

    No agency, officer, or employee of the USDA shall, on the grounds 
of race, color, national origin, religion, sex, gender identity, sexual 
orientation, disability, age, marital status, family/parental status, 
income derived from a public assistance program, or political beliefs, 
exclude from participation in, deny the benefits of, or subject to 
discrimination any person in the United States under any program or 
activity conducted by the USDA.
    To file a complaint of discrimination, complete the USDA Program 
Discrimination Complaint Form, which may be accessed online at http://www.ocio.usda.gov/sites/default/files/docs/2012/Complain_combined_6_8_12.pdf, or write a letter signed by you or your 
authorized representative.
    Send your completed complaint form or letter to USDA by mail, fax, 
or email:
    Mail: U.S. Department of Agriculture, Director, Office of 
Adjudication, 1400 Independence Avenue SW., Washington, DC 20250-9410.
    Fax: (202) 690-7442.
    Email: [email protected].
    Persons with disabilities who require alternative means for 
communication (Braille, large print, audiotape, etc.) should contact 
USDA's TARGET Center at (202) 720-2600 (voice and TDD).

List of Subjects

9 CFR Part 317

    Food labeling, Food packaging, Meat inspection, Nutrition, 
Reporting and recordkeeping requirements.

9 CFR Part 381

    Food labeling.

    For the reasons discussed in the preamble, FSIS is amending 9 CFR 
chapter III as follows:

PART 317--LABELING, MARKING DEVICES, AND CONTAINERS

0
1. The authority citation for part 317 continues to read as follows:

    Authority: 21 U.S.C. 601-695; 7 CFR 2.18, 2.53.


0
2. Amend Sec.  317.2 by redesignating paragraph (e) as paragraph (e)(1) 
and adding paragraph (e)(2) to read as follows:


Sec.  317.2  Labels: definition; required features.

* * * * *
    (e) * * *
    (2) The product name for a raw meat product that contains added 
solution and does not meet a standard of identity in 9 CFR part 319 
must contain a descriptive designation that includes:
    (i) The percentage of added solution (total weight of the solution 
ingredients divided by the weight of the raw meat without solution or 
any other added ingredients multiplied by 100). The percentage of added 
solution must appear as a number (such as, 15, 20, 30) and the percent 
symbol (%). The percentage of added solution may be declared by the 
words ``containing'' or ``contains'' (such as, ``contains 15% added 
solution of water and salt,'' or ``containing 15% added solution of 
water and teriyaki sauce'').
    (ii) The common or usual name of all individual ingredients or 
multi-ingredient components in the solution listed in descending order 
of predominance by weight.
    (iii) When the descriptive designation includes all ingredients in 
the solution, a separate ingredients statement is not required on the 
label. When the descriptive designation includes multi-ingredient 
components and the ingredients of the component are not declared in the 
descriptive designation, all ingredients in the product must be 
declared in a separate ingredients statement on the label as required 
in Sec.  317.2(c)(2) and (f).
    (iv) The product name and the descriptive designation must be 
printed in a single easy-to-read type style and color and must appear 
on a single-color contrasting background. The print may appear in upper 
and lower case letters, with the lower case letters not smaller than 
one-third (\1/3\) the size of the largest letter.
    (v) The word ``enhanced'' cannot be used in the product name.
* * * * *

PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS

0
3. The authority citation for part 381 continues to read as follows:

    Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.7, 
2.18, 2.53.


0
4. Amend Sec.  381.117 by adding paragraph (h) to read as follows:


Sec.  381.117  Name of product and other labeling.

* * * * *
    (h) The product name for a raw poultry product that contains added 
solution and does not meet a standard of identity in this part must 
contain a descriptive designation that includes:
    (1) The percentage of added solution (total weight of the solution 
ingredients divided by the weight of the raw poultry without solution 
or any other added

[[Page 79062]]

ingredients multiplied by 100). The percentage of added solution must 
appear as a number (such as, 15, 20, 30) and the percent symbol (%). 
The percentage of added solution may be declared by the words 
``containing'' or ``contains'' (such as, ``contains 15% added solution 
of water and salt,'' or ``containing 15% added solution of water and 
teriyaki sauce'').
    (2) The common or usual name of all individual ingredients or 
multi-ingredient components in the solution listed in descending order 
of predominance by weight.
    (3) When the descriptive designation includes all ingredients in 
the solution, a separate ingredients statement is not required on the 
label. When the descriptive designation includes multi-ingredient 
components and the ingredients of the component are not declared in the 
product name, all ingredients in the product must be declared in a 
separate ingredients statement on the label as required in Sec.  
381.118.
    (4) The product name and the descriptive designation must be 
printed in a single easy-to-read type style and color and must appear 
on a single-color contrasting background. The print may appear in upper 
and lower case letters, with the lower case letters not smaller than 
one-third (\1/3\) the size of the largest letter.
    (5) The word ``enhanced'' cannot be used in the product name.


Sec.  381.169  [Removed and Reserved]

0
5. Remove and reserve Sec.  381.169.

    Done at Washington, DC, on December 23, 2014.
Alfred Almanza,
Acting Administrator.
[FR Doc. 2014-30472 Filed 12-30-14; 8:45 am]
BILLING CODE 3410-DM-P