Fresh Produce: Potential Consequences of Country-of-Origin Labeling
(Letter Report, 04/21/99, GAO/RCED-99-112).
Pursuant to a legislative requirement, GAO provided information on the:
(1) potential costs associated with the compliance and enforcement of a
mandatory country-of-origin labeling requirement at the retail level for
fresh produce; (2) potential trade issues associated with such a
requirement; (3) potential impact of such a requirement on the ability
of the federal government and the public to respond to outbreaks of
illness caused by contaminated fresh produce; and (4) consumers' views
of country-of-origin labeling.
GAO noted that: (1) the magnitude of compliance and enforcement costs
for a country-of-origin labeling requirement at the retail level would
depend on several factors, including the extent to which labeling
practices would have to be changed; (2) according to an association
representing grocery retailers, changing store signs to ensure that
produce is properly labeled would cost about 2 staff hours per store per
week; (3) however, it is unclear who would bear the burden of any such
additional labeling costs--retailers could absorb some or all of the
costs or pass them to consumers or to their suppliers; (4) regarding
enforcement, the Food and Drug Administration, in commenting on a
recently proposed bill, estimated that federal monitoring would cost
about $56 million annually and said that enforcement would be difficult;
(5) inspectors would need documentary evidence to determine the
country-of-origin of the many produce items on display, and this
documentation is often not available at each retail store; (6)
enforcement is carried out in only one of the three states with labeling
laws; (7) Florida inspectors told GAO that they sometimes have no
reliable means to verify the accuracy of labels; (8) according to
Department of Agriculture officials and industry representatives,
mandatory labeling at the retail level could be viewed by other
countries as a trade barrier; (9) officials also noted that countries
concerned with a labeling law could take actions that could adversely
affect U.S. exports; (10) about half of the countries that account for
most of the U.S. trade in produce require country-of-origin labeling for
fresh produce at the retail level; (11) when outbreaks of foodborne
illness occur, country-of-origin labeling for fresh produce would be of
limited benefit to food safety agencies in tracing the source of
contamination and to the public in responding to a warning of an
outbreak; (12) it can take weeks or months for food safety agencies to
identify an outbreak, determine the type of food involved, identify the
source of the food contamination, and issue a warning; (13) retail
labeling would help consumers only if they remembered the country of
origin or still had the produce, or if the produce were still in the
store; and (14) according to nationwide surveys sponsored by the fresh
produce industry, between 74 and 83 percent of consumers favor mandatory
country-of-origin labeling for fresh produce, although they rated
information on freshness, nutrition, and handling and storage as more
important.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-99-112
TITLE: Fresh Produce: Potential Consequences of Country-of-Origin
Labeling
DATE: 04/21/99
SUBJECT: Labeling law
Food and drug law
Importing
Safety standards
Consumer protection
Agricultural products
Cost effectiveness analysis
Health hazards
International trade restriction
State programs
IDENTIFIER: NAFTA
North American Free Trade Agreement
Florida
Texas
Maine
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO report. Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved. Major **
** divisions and subdivisions of the text, such as Chapters, **
** Sections, and Appendixes, are identified by double and **
** single lines. The numbers on the right end of these lines **
** indicate the position of each of the subsections in the **
** document outline. These numbers do NOT correspond with the **
** page numbers of the printed product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
** A printed copy of this report may be obtained from the GAO **
** Document Distribution Center. For further details, please **
** send an e-mail message to: **
** **
** **
** **
** with the message 'info' in the body. **
******************************************************************
Cover
================================================================ COVER
Report to Congressional Committees
April 1999
FRESH PRODUCE - POTENTIAL
CONSEQUENCES OF COUNTRY-OF-ORIGIN
LABELING
GAO/RCED-99-112
Country-of-Origin Labeling
(150094)
Abbreviations
=============================================================== ABBREV
CDC - Centers for Disease Control and Prevention
EPA - Environmental Protection Agency
EU - European Union
FDA - Food and Drug Administration
NAFTA - North America Free Trade Agreement
USDA - U.S. Department of Agriculture
WTO - World Trade Organization
Letter
=============================================================== LETTER
B-282173
April 21, 1999
The Honorable Thad Cochran
Chairman
The Honorable Herb Kohl
Ranking Minority Member
Subcommittee on Agriculture, Rural
Development, and Related Agencies
Committee on Appropriations
United States Senate
The Honorable Joe Skeen
Chairman
The Honorable Marcy Kaptur
Ranking Minority Member
Subcommittee on Agriculture, Rural
Development, Food and Drug Administration,
and Related Agencies
Committee on Appropriations
House of Representatives
The containers in which fresh produce of foreign origin enters the
United States must be marked with the country-of-origin. However,
this identification is not required to be maintained for loose, or
bulk, produce at the retail level.\1 In the past few years, several
legislative proposals have been introduced to require that fresh
produce be labeled at the retail level by its country of origin.
As requested by the Senate and House conferees for the Omnibus
Consolidated and Emergency Supplemental Appropriations Act, 1999,\2
we reviewed a number of issues associated with the potential costs
and benefits of a mandatory labeling requirement. Specifically, as
agreed with your offices, this report provides information on (1) the
potential costs associated with the compliance and enforcement of a
mandatory country-of-origin labeling requirement at the retail level
for fresh produce, (2) the potential trade issues associated with
such a requirement, (3) the potential impact of such a requirement on
the ability of the federal government and the public to respond to
outbreaks of illness caused by contaminated fresh produce, and (4)
consumers' views of country-of-origin labeling. Finally, appendix I
identifies U.S. trading partners that have country-of-origin
labeling requirements for fresh produce, the nature and scope of
those requirements, and the record of U.S. challenges to those
requirements.
For the purpose of this report, and as agreed with your offices, we
assumed that the retailer would be responsible for ensuring that
produce is labeled as to its country of origin and that the term
�label� means any label, mark, sticker, stamp, placard, or other
clear visible sign.
--------------------
\1 This report uses the term �loose produce� to refer to bulk
produce.
\2 Conference Report 105-825 accompanied H.R. 4328, which became the
Omnibus Consolidated and Emergency Supplemental Appropriations Act,
1999 (P.L. 105-277, Oct. 21, 1998).
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
The magnitude of compliance and enforcement costs for a
country-of-origin labeling requirement at the retail level would
depend on several factors, including the extent to which current
labeling practices would have to be changed. According to an
association representing grocery retailers, changing store signs to
ensure that produce is properly labeled would cost about 2 staff
hours per store per week. However, it is unclear who would bear the
burden of any such additional labeling costs--retailers could absorb
some or all of the costs or pass them to consumers or to their
suppliers. Regarding enforcement, the Food and Drug Administration,
in commenting on a recently proposed bill, estimated that federal
monitoring would cost about $56 million annually and said that
enforcement would be difficult. Inspectors would need documentary
evidence to determine the country-of-origin of the many produce items
on display, and this documentation is often not available at each
retail store. Enforcement is carried out in only one of the three
states with labeling laws�in Florida, where inspectors check shipping
boxes against display signs during semiannual routine state health
inspections. Florida inspectors told us that they sometimes have no
reliable means to verify the accuracy of labels.
According to U.S. Department of Agriculture officials and industry
representatives, mandatory labeling at the retail level could be
viewed by other countries as a trade barrier. For example, a country
currently exporting produce to the United States may be concerned
about the additional costs its exporters may incur if they are
required to label loose produce. Officials also noted that countries
concerned with a labeling law could take actions that could adversely
affect U.S. exports. For example, these countries may develop or
more strictly enforce their own labeling laws. Currently, about half
of the countries that account for most of the U.S. trade in produce
require country-of-origin labeling for fresh produce at the retail
level. Additionally, officials from the departments of Agriculture
and State believe that a U.S. labeling law is more likely to be
challenged than other countries' labeling laws because the United
States is such a large importer and exporter of fresh produce.
When outbreaks of foodborne illness occur, country-of-origin labeling
for fresh produce would be of limited benefit to food safety agencies
in tracing the source of contamination and to the public in
responding to a warning of an outbreak, according to officials from
the Food and Drug Administration and the Centers for Disease Control
and Prevention. It can take weeks or months for food safety agencies
to identify an outbreak, determine the type of food involved,
identify the source of the food contamination, and issue a warning.
Retail labeling would help consumers only if they remembered the
country of origin or still had the produce, or if the produce were
still in the store.
Finally, according to nationwide surveys sponsored by the fresh
produce industry, between 74 and 83 percent of consumers favor
mandatory country-of-origin labeling for fresh produce, although they
rated information on freshness, nutrition, and handling and storage
as more important.\3 Most consumers also prefer to buy domestic
produce if price, taste, and appearance are equal. In addition,
survey responses show that consumers believe that U.S. produce is
safer than imported produce; however, officials from the U.S.
Department of Agriculture, the Food and Drug Administration, and the
Centers for Disease Control and Prevention told us that sufficient
data are not available to make this determination.
--------------------
\3 Based on nationally representative samples of U.S. households:
Three surveys were conducted between 1990 and 1998 by Vance
Publishing Corporation for The Packer newspaper and were published in
its annual supplement, Fresh Trends and one survey was conducted by
the Charlton Research Group in 1996 for the Desert Grape Growers
League. For the data we included in our report, we obtained
frequency counts, survey instruments, and other documents, in order
to review the wording of questions, sampling, mode of administration,
research strategies, and the effects of sponsorship. We used only
the data that we judged to be reliable and valid.
BACKGROUND
------------------------------------------------------------ Letter :2
The Tariff Act of 1930, as amended, generally requires imported
articles--such as clothing, appliances, and canned and frozen
goods--to be marked by country of origin. Under the statute,
however, certain articles, including fresh produce, are not required
to be marked individually. For these items, the container holding
the article must be marked by the country of origin. U.S. Customs
Service rulings provide that when fresh produce is taken out of its
container and put into an open bin or display rack, there is no
obligation to identify the items by the country of origin.\4
Three states--Florida, Maine, and Texas--have enacted
country-of-origin labeling laws for fresh produce. Florida requires
all imported fresh produce to be identified by the country-of-origin
by, for example, marking each produce item or placing a sign or label
adjacent to the bin. Maine requires country-of-origin labeling for
fresh produce at the retail level when it has been imported from
countries identified as having specific pesticide violations.\5
Texas requires country-of-origin labeling for fresh grapefruit. In
addition, labeling laws for fresh produce have been proposed in at
least five other states: California, Connecticut, Oregon, Rhode
Island, and Virginia.
Most large grocery stores carry over 200 produce items. Fresh
produce is often imported to fill seasonal needs when U.S.
production is not sufficient to cover demand or to satisfy the demand
for tropical fruits not normally grown in the United States.
Two-thirds of imported fresh produce arrives between December and
April, when U.S. production is low and limited to the southern
portions of the country. The majority of these imports are
warm-season vegetables like peppers, squash, and cucumbers, although
some imports, such as tomatoes, occur year round.
Total U.S. consumption of fresh produce has increased 43 percent
since 1980, from about 56 billion pounds to nearly 80 billion pounds
in 1997, the latest year for which the U.S. Department of
Agriculture (USDA) has compiled such data. During this same period,
the amount of fresh produce the United States imported more than
doubled--from 7.5 billion pounds to 16 billion pounds. The domestic
share increased by one third�from about 48 billion to about 64
billion pounds.
In 1997, most imported produce came from Mexico, Canada, and Chile,
as shown in figure 1.
Figure 1: Source of Fresh and
Frozen Imported Produce, 1997,
by dollar value
(See figure in printed
edition.)
Source: GAO's analysis of data from USDA's Economic Research
Service.
The United States is also the world's largest exporter of fresh
produce, valued at $2.9 billion in 1998. Three-fourths of exported
U.S. produce goes to Canada, the European Union, Japan, Hong Kong,
and Mexico.\6
--------------------
\4 U.S. Customs ruling HRL 722992. This ruling was interpreted in
Customs ruling HRL 733798 not to require marking because open bins or
display racks were not determined to constitute �containers.'
\5 Maine also requires packages of Maine apples to state that they
are from Maine and potatoes packaged in Maine to be labeled as to
their country-of-origin.
\6 The European Union is composed of Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, and the United Kingdom.
UNCERTAINTIES EXIST ABOUT THE
COSTS ASSOCIATED WITH
COMPLIANCE AND ENFORCEMENT
------------------------------------------------------------ Letter :3
Complying with mandatory country-of-origin labeling for fresh produce
could change the way retailers and others involved in the production
and distribution of produce do business, thereby affecting their
costs and consumers' choices. Furthermore, such a law could be
difficult to enforce.
MAGNITUDE OF COMPLIANCE
COSTS AND THE RESPONSIBILITY
FOR THESE COSTS ARE
UNCERTAIN
---------------------------------------------------------- Letter :3.1
The fresh produce industry and retailers will have to incur costs to
comply with a mandatory country-of-origin labeling law. The
additional efforts and associated costs for compliance would depend
on the specific requirements of the law and the extent to which
current practices would have to be changed. For example, some
produce is already labeled with a brand sticker. In these cases,
compliance would require adding the name of the country to the
sticker. For unlabeled produce, the additional effort would be more
significant.
Associations we spoke with representing grocery retailers are
particularly concerned that a labeling law would be unduly burdensome
for a number of reasons. First, retailers would have to display the
same produce items from different countries separately if each
individual item is not marked, which in some cases would result in
only partially filled bins. According to these retailers, consumers
are less likely to buy from such bins because they are less
appealing, causing the retailers to lose sales. Second, retailers
report that they do not have sufficient display space to separate
produce and still stock all the different varieties consumers want.
Large grocery stores usually carry over 200 produce items. Third,
because the country of origin of retailers' produce shipments may
vary each week, retailers would incur costs to change store signs and
labels to reflect the origins of the different shipments. According
to the Food Marketing Institute, an association representing grocery
retailers, it would take about 2 staff hours per store per week to
ensure that imported produce is properly labeled. Costs would also
be incurred if retailers were required to maintain paperwork at each
store as evidence of the origin of these multiple shipments. Florida
does not require its retail stores to maintain paperwork documenting
the country of origin.
It is unclear who would bear the burden of compliance. A law
requiring retailers to ensure that produce is properly labeled would
initially place at least some of the compliance costs on retailers.
However, retailers would not necessarily bear all these costs.
Retailers could raise prices to pass their costs to consumers.
However, if consumers reduce their purchases of fresh produce in
response, retailers will absorb part of the cost through lower sales
volume. For produce that does not have close substitutes, and for
which consumer demand is relatively insensitive to price changes,
retailers are likely to be more successful in passing costs on to
consumers through price increases without experiencing significant
declines in sales volume.
Retailers may decide to require their suppliers to either package
produce or label individual produce items. If retailers can impose
this requirement without paying more for the same quantity and
quality, they will have shifted the labeling costs to their
suppliers. Consumer responses may also influence the eventual effect
of a country-of-origin law. If consumers prefer domestic produce,
they may buy more domestic and less imported produce, which would
allow domestic producers to gain market share and/or raise their
prices. However, if foreign countries respond by imposing their own
labeling requirements, and if this resulted in foreign consumers'
buying less U.S. produce, then U.S. exports could suffer.
It is also possible that a country-of-origin labeling requirement
would result in fewer choices for consumers. This would occur if
retailers decide to stock more prepackaged produce, which would
already be labeled, and fewer bulk items, which would have to be
labeled. Furthermore, if a law required labeling for imported
produce only, retailers could decide to stock fewer imported produce
items in order to avoid the compliance burden.
An additional cost would be borne by restaurants and other food
service providers if the labeling law applies to them. They would
have to let their customers know the country of origin of the produce
they use, which could involve, for example, changing information on
menus each time the source of the produce changed. According to the
National Restaurant Association, the cost of changing menus would be
�prohibitive.�
FEDERAL AGENCIES WOULD NEED
ENFORCEMENT RESOURCES FOR AN
INHERENTLY DIFFICULT TASK
---------------------------------------------------------- Letter :3.2
According to Food and Drug Administration (FDA) and USDA officials we
spoke with, enforcing a labeling law would require significant
additional resources. The agency enforcing such a law would have to
implement a system to ensure that the identity of produce is
maintained throughout the distribution chain. While inspectors could
ensure that retailers have signs or labels in place and could review
documentation�if it were available--they might not be able to
determine from a visual inspection that produce in a particular bin
was from the country designated on the sign or label. Such
documentation is often unavailable at the retail store.
It is also unclear who would be responsible for these inspections.
Grocery store inspections for compliance with federal health and
safety laws are now generally conducted by state and local officials,
often under memorandums of understanding with the Food and Drug
Administration. USDA officials pointed out that if state and local
governments were to carry out the inspections required by a federal
country-of-origin labeling law, such a law would have to specify the
states' enforcement role and provide funding for enforcement
activities.
In commenting on a Senate amendment to the fiscal year 1999
appropriations bill regarding country-of-origin labeling, FDA
expressed �reservations about its priority as a public health issue,
its cost to administer, and [FDA's] ability to enforce it.� FDA
further noted that the cost of enforcement �would be significant,�
and �it is unclear that enforcement would even be possible.� Among
other enforcement problems, FDA cited the need for accompanying
paperwork to verify country-of-origin labels and said this would
place �an enormous burden� on industry. FDA estimated that the
federal cost for 1-year's monitoring under this proposed amendment
would be about $56 million.
The three states that have labeling laws vary in their degree of
enforcement. In Florida, which has a mandatory labeling law for all
imported produce, enforcement occurs during the course of routine
state health inspections that are conducted about twice each year in
every store. During the routine inspections, officials check the
shipping boxes and packages in the store against the display signs or
labels--a task they estimate requires about 15 minutes per visit.
However, they said they sometimes have no reliable means to verify
the accuracy of these signs and labels. When violations are found,
Florida officials said that it takes 5 minutes to process paperwork
for new violations and 30 minutes for repeat violations. Figure 2
shows produce labeled in Florida grocery stores.
Figure 2: Labeled Produce in
Florida Grocery Stores
(See figure in printed
edition.)
According to the Inspection Manager for Maine's Department of
Agriculture, Maine does not enforce its country-of-origin labeling
requirements because the list of countries to be identified keeps
changing and paperwork to verify the country of origin is often
unavailable. In Texas, the labeling law applies only to grapefruit.
According to a Texas Department of Agriculture official, grapefruit
is rarely imported into Texas, and the labeling law is not currently
being enforced.
A LABELING LAW COULD HAVE TRADE
IMPLICATIONS
------------------------------------------------------------ Letter :4
Depending on what it might require and how it might be implemented, a
law mandating country-of-origin labeling for fresh produce could have
adverse trade implications. U.S. trading partners might challenge
the law's consistency with international trade obligations or take
steps to increase their own country-of-origin labeling requirements.
Moreover, according to USDA officials, enacting a labeling law could
make it more difficult for the United States to oppose foreign
countries' labeling requirements that it finds objectionable.
Any labeling law would need to be consistent with U.S. international
trade obligations in order to withstand potential challenges from
U.S. trading partners. International trade rules that the United
States has agreed to, such as those embodied in the World Trade
Organization (WTO) and the North American Free Trade Agreement
(NAFTA), permit country-of-origin labeling.\7 For example, WTO
provisions recognize the need to protect consumers from inaccurate
information while minimizing the difficulties and inconveniences
labeling measures may cause to commerce. WTO rules require, among
other things, that the labeling of imported products must not result
in serious damage to the product, a material reduction in its value,
or an unreasonable increase in its cost.\8 Correspondence from the
Office of the U.S. Trade Representative (USTR) stated that our
trading partners could raise concerns that country-of-origin labeling
requirements adversely affect their exports by raising costs.
Similarly, NAFTA requires that any country-of-origin marking
requirement must be applied in a manner that would minimize
difficulties, costs, and inconveniences to a country's commerce.
USTR and Department of State officials stated that Mexico requested
consultations to discuss its concerns that one recently proposed U.S.
country-of-origin labeling bill would violate certain NAFTA
provisions on country-of-origin marking.
USDA officials and food industry representatives expressed concern
that mandatory country-of-origin labeling at the retail level could
be viewed as a trade barrier and might lead to actions that could
hurt U.S. exports. For example, a country currently exporting
produce to the United States may be concerned about additional costs
if its exporters are required to label loose produce. Such a country
could respond by enacting or more strictly enforcing retail labeling
laws that could hinder U.S. exports. The officials were also
concerned that adopting mandatory country-of-origin labeling at the
retail level could complicate U.S. efforts to address other
countries' labeling laws that the United States found objectionable.
According to USDA officials, the United States has opposed certain
country-of-origin labeling in other countries for various reasons,
including concerns about the potential of those laws to raise the
costs of U.S. exports and discourage consumers from purchasing
imported goods.
While U.S. representatives have worked informally and cooperatively
to oppose certain foreign country-of-origin labeling requirements,
the United States has not formally challenged any such requirements
within the WTO. WTO officials said they were unaware of any formal
challenges to any country's country-of-origin labeling requirement.
However, USDA and WTO officials agreed that the absence of any formal
challenge does not necessarily indicate that existing
country-of-origin labeling requirements are consistent with WTO
rules. Moreover, the absence of formal challenges to existing laws
does not preclude these laws from being challenged in the future.
Finally, because the United States is such a large importer and
exporter of fresh produce, officials with USDA and the Department of
State pointed out that a U.S. labeling law is more likely to be
formally challenged than are other countries' laws.
In February and March 1999, we surveyed U.S. embassy agricultural
attach�s in 45 countries with which the United States exports and
imports agricultural products to determine which countries have and
enforce country-of-origin labeling requirements for fresh produce at
the retail level. Our survey included 28 countries that account for
most of the U.S. produce imports and exports and 17 countries that
USDA identified as having produce labeling requirements.\9 Of the 28
countries, 13 (46 percent) require country-of-origin labeling for
bulk produce at the retail level, and 15 require such labeling for
packaged produce.\10 Attach�s in these countries reported the
countries with requirements generally have a high level of compliance
and moderate to high levels of enforcement.\11 Appendix I identifies
the U.S. trading partners that require country-of-origin labeling
for fresh produce and the scope of their requirements.
--------------------
\7 The WTO was established in 1995, as a result of the Uruguay Round
of the General Agreement on Tariffs and Trade (1986-94). WTO
facilitates the implementation, administration, and operation of
multiple agreements that govern trade among its member countries.
NAFTA is a multilateral trade agreement that contains obligations
governing trade among Canada, Mexico, and the United States. NAFTA
negotiations began in 1991 and the agreement entered into force in
1994.
\8 In addition, country-of-origin labeling is covered as a technical
regulation subject to the WTO Agreement on Technical Barriers to
Trade. This agreement provides guidelines for developing and
applying technical regulations.
\9 USDA surveyed these countries in 1998.
\10 The European Union (EU) has a single requirement for labeling of
both loose and packaged produce that applies to all 15 EU member
countries. Our 28 largest produce trading partners include 6 EU
member countries.
\11 Although the EU has a single labeling requirement for all 15
member countries, we surveyed these countries individually to obtain
a better understanding of compliance and enforcement with the
labeling requirement.
LABELING WOULD PROVIDE LIMITED
BENEFITS IN RESPONDING TO
OUTBREAKS OF FOODBORNE
ILLNESSES
------------------------------------------------------------ Letter :5
Considerable time--several weeks or months--generally passes between
the outbreak of a produce-related illness, the identification of the
cause, and a warning to the public about the risks of eating a
specific produce item, according to the Centers for Disease Control
and Prevention (CDC) and FDA officials. By the time a warning is
issued, country-of-origin labeling would benefit consumers only if
they remembered the country of origin or still had the produce, or if
the produce were still in the store. Consequently, country-of-origin
labeling would be of limited value in helping consumers respond to a
warning of an outbreak.
Several factors contribute to the delays in identifying causes of
foodborne illness, including how quickly consumers become ill after
purchasing and eating the food and whether they seek medical
attention. State and local agencies report known or suspected
foodborne illnesses to CDC, which uses this information to identify
patterns of related illnesses--outbreaks--and to work with state,
local, and FDA officials to identify the source. Once the source is
identified, state and local public health officials generally issue a
warning to the public if the product is still available in the
marketplace.
In most cases of foodborne illness, however, officials are not able
to identify the specific point at which the food associated with the
outbreak became contaminated. Between 1990 and 1998, CDC identified
98 outbreaks of foodborne illnesses linked to fresh produce. In 86
of these cases, the point of contamination was never identified. The
remaining 12 cases were traced to contamination in food handling and
to seed that was contaminated. Appendix II provides information on
outbreaks of illnesses related to contaminated fresh produce since
1990.
Because of the time needed to identify the cause of an outbreak,
country-of-origin labeling would not generally be useful in
preventing more consumers from becoming ill. For example, when
cyclospora-contaminated raspberries from Guatemala caused outbreaks
of illnesses in 1996 and 1997, many individuals did not become ill
until a week or more after they ate the fruit.
CDC officials said that country-of-origin labeling might be a
starting point in tracing the source of contamination if a person who
had eaten a contaminated product remembered the source for that
product. However, they said that more detailed information
identifying every step from farm to table--for both domestically
grown and imported produce--would be of greater use in tracing the
source of an outbreak and identifying the practices that resulted in
the contamination. Identifying such practices may enable officials
to devise control measures that could be used throughout the industry
to decrease the potential for additional illnesses. CDC officials
also pointed out that a country-of-origin labeling law would be more
useful to them if it required retailers to keep better records,
including invoices and shipping documents. Such records would allow
investigators to identify the source of produce that was in grocery
stores at a particular time in the past.
Finally, FDA and CDC officials observed that a law exempting food
service establishments from country-of-origin labeling would be of
limited value because many identified outbreaks have been traced to
food served in restaurants or at catered meals. U.S. consumers are
eating more meals, including more fresh produce, outside the home.
Indeed, a significant portion of the illnesses that were traced to
Guatemalan raspberries were contracted from meals eaten outside the
home.
ALTHOUGH CONSUMERS FAVOR
LABELING, OTHER INFORMATION IS
MORE IMPORTANT TO THEM
------------------------------------------------------------ Letter :6
Surveys representing households nationwide, sponsored by the produce
industry between 1990 and 1998, showed that between 74 and 83 percent
of consumers favor mandatory country-of-origin labeling for fresh
produce at the retail level.\12 However, when asked to rate the
importance of several types of labeling information, households
reported information on freshness as most important, followed by
information on nutrition, storage and handling, and preparation tips.
Information on country-of-origin was ranked fifth, as shown in figure
3.\13
Figure 3: Importance of
Different Types of
Produce-Labeling Information to
Consumers
(See figure in printed
edition.)
Source: GAO's analysis of 1996 survey data collected for The Packer,
a publication of the fresh produce industry.
In addition, most consumers would prefer to buy U.S. produce if all
other factors--price, taste and appearance--were equal.\14 And, about
half of all consumers would be willing to pay �a little more to get
U.S. produce.�\15 However, the survey did not specify the additional
amount that consumers would be willing to pay.
Furthermore, according to a 1998 industry-sponsored nationwide
survey, 70 percent of consumers believe that domestically grown
produce is safer.\16 In the same survey, about half of consumers
reported having concerns about health and safety and growing
conditions, and about one-third had concerns with cleanliness and
handling when buying imported produce. Despite these concerns,
officials with USDA, CDC, and FDA, told us that sufficient data are
not available to compare the safety of domestic and imported produce.
However, CDC officials told us that, in the absence of specific food
production controls, the potential for contaminated produce increases
where poor sanitary conditions and polluted water are more prevalent.
In addition, Consumers Union--a nationally recognized consumer
group�used data collected by USDA's Agricultural Marketing Service to
compare the extent to which multiple pesticide residues were found in
selected domestic and imported fresh produce.\17 For its analysis,
Consumers Union developed a toxicity index, which it used to compare
the pesticide residues. According to this analysis, pesticide
residues on imported peaches, winter squash, apples, and green beans
had lower toxicity levels than those found on their domestically
grown counterparts. In contrast, the pesticide residues on
domestically grown tomatoes and grapes were less toxic than their
imported counterparts. The study acknowledges that almost all of the
pesticide residues on the samples were within the tolerance levels
allowed by the Environmental Protection Agency (EPA). We did not
independently determine the validity of the toxicity index developed
by Consumers Union or verify its analysis or results. However,
according to FDA officials, pesticide residues present a lower health
risk than the disease-causing bacteria that can be found on food.
--------------------
\12 Surveys conducted for The Packer newspaper in 1990, 1992, and
1998 and for the Desert Grape Growers League in 1996. For the data
we included in our report, we obtained frequency counts, survey
instruments, and other documents, in order to review question
wording, sampling, mode of administration, research strategies, and
the effects of sponsorship. We only used data that we judged to be
reliable and valid.
\13 Survey conducted for The Packer newspaper in 1996.
\14 Survey conducted for the Desert Grape Growers League in 1996.
\15 Survey conducted for the Desert Grape Growers League in 1996.
\16 Survey conducted for The Packer newspaper. Twenty percent said
U.S. produce was about the same, 3 percent�worse, and 6
percent�don't know.
\17 Do You Know What You Are Eating? An Analysis of U.S. Government
Data on Pesticide Residues in Foods, Consumers Union, Feb. 1999.
AGENCY COMMENTS AND OUR
RESPONSE
------------------------------------------------------------ Letter :7
We provided the departments of Agriculture and State, Office of the
U.S. Trade Representative, CDC, U.S. Customs Service, EPA, and FDA
with a draft of this report for their review and comment. These
agencies generally agreed with the facts presented in the report and
provided technical comments, which we incorporated as appropriate.
Officials commenting on the report included the Deputy Administrator,
Fruit and Vegetable Programs, Agricultural Marketing Service, USDA;
the Economic/Commercial Officer in the Agricultural Trade Policy
Division, Department of State; the Director of Agricultural Affairs
and Technical Barriers to Trade, Office of the U.S. Trade
Representative; the Director of Food Safety Initiative Activities,
Division of Bacterial and Mycotic Diseases, National Center for
Infectious Diseases, CDC; a Senior Attorney, Office of Regulations
and Rulings, U.S. Customs Service; the Interim Associate
Commissioner for Legislative Affairs, FDA.
---------------------------------------------------------- Letter :7.1
We performed our review from November 1998 through March 1999 in
accordance with generally accepted government auditing standards.
Our scope and methodology are discussed in appendix III.
Copies of this report will be sent to Senator Richard Lugar,
Chairman, and Senator Tom Harkin, Ranking Minority Member, Senate
Committee on Agriculture, Nutrition, and Forestry; and Representative
Larry Combest, Chairman, and Representative Charles Stenholm, Ranking
Minority Member, House Committee on Agriculture. We are also sending
copies to the Honorable Dan Glickman, Secretary of Agriculture; the
Honorable Madeleine Korbel Albright, Secretary of State; the
Honorable Jane Henney, M.D., Commissioner, Food and Drug
Administration; the Honorable Jeffrey P. Koplan, M.D., Director,
Centers for Disease Control and Prevention; the Honorable Raymond W.
Kelly, Commissioner of the U.S. Customs Service; the Honorable Jacob
J. Lew, Office of Management and Budget; and Ambassador Charlene
Barshefsky, the U.S. Trade Representative. We will also make copies
available to others upon request.
If you would like more information on this report, please contact me
at (202) 512-5138. Major contributors to this report are listed in
appendix IV.
Robert E. Robertson
Associate Director, Food
and Agriculture Issues
U.S. TRADING PARTNERS THAT
REQUIRE COUNTRY-OF-ORIGIN LABELING
FOR FRESH PRODUCE AND THE SCOPE OF
THEIR REQUIREMENTS
=========================================================== Appendix I
This appendix identifies the U.S. trading partners that have
country-of-origin labeling requirements for fresh produce at the
retail level, the nature and scope of these requirements, and the
record of U.S. challenges to those requirements.
Table I.1 identifies U.S. trading partner countries, their
requirements for loose or packaged fresh produce to be labeled at the
retail level, and the degree of compliance and enforcement with those
requirements. This information is based on our survey of U.S.
agricultural attach�s for 45 countries. Of the 45 countries, 28
account for most of U.S. trade in produce. We also surveyed the 17
countries that were not among the largest produce trading partners
but were identified in the Foreign Agricultural Service's 1998
Foreign Country of Origin Labeling Survey as having produce labeling
requirements. As the table indicates, 13 of the 28 major produce
trading partners require country-of-origin labeling for loose produce
at the retail level, and 15 require labeling for packaged produce.
Attach�s reported that these countries generally have a high level of
compliance and a moderate to high level of enforcement.
Officials of the World Trade Organization, the departments of
Agriculture and State, the Office of the U.S. Trade Representative,
and U.S. agricultural attaches were not able to identify any formal
U.S. challenges to country-of-origin labeling requirements for fresh
produce.
Table I.1
Trading Partner Countries' Requirements
for Country-of-Origin Labeling of Fresh
Produce at the Retail Level
Scope of labeling Degree of Degree of
Country requirement compliance enforcement
----------------------- -------------------- -------------------- --------------------
Major produce trading
partners (28)
Argentina No requirement
Australia Loose and packaged \a \a
Brazil Packaged High Moderate
Canada Loose\b and packaged High High
Chile No requirement
Costa Rica Packaged High Moderate
Dominican Republic No requirement
European Union Loose and packaged
Belgium Very high Moderate
France Very high Very high
Luxembourg Very high Moderate
Netherlands High High
Spain High High
United Kingdom Very high Very high
Guatemala No requirement
Honduras No requirement
Hong Kong No requirement
Indonesia No requirement
Japan Loose and packaged\c High High
Malaysia No requirement
Mexico Loose and packaged High Moderate
New Zealand No requirement
Peru Loose and packaged High Moderate
Philippines No requirement
Republic of Korea Loose and packaged High High
Republic of South Loose and packaged Moderate Moderate
Africa
Singapore No requirement
Taiwan No requirement
Thailand No requirement
Other countries
surveyed (17)
Czech Republic Packaged High Moderate
Egypt Loose and packaged High Very high
European Union Loose and packaged
Austria Very high Very high
Denmark Very high Moderate
Finland High Moderate
Germany High High
Greece Very high Very high
Ireland Very high Very high
Italy High High
Portugal High High
Sweden High Moderate
Hungary Loose and packaged \a Moderate
Israel No requirement
Russia Loose and packaged Moderate Moderate
Switzerland Loose and packaged Very high Very high
United Arab Emirates No requirement
Venezuela No requirement
-----------------------------------------------------------------------------------------
Source: GAO survey
\a Agricultural attaches were uncertain about this information.
\b Requirements for labeling loose produce are provincial government
requirements and do not include all Canadian provinces.
\c Requirements currently apply to broccoli, taro, garlic, ginger,
wet shitake mushrooms, edible burdock, asparagus, field peas, and
onions. According to U.S. Department of Agriculture correspondence,
labeling of all produce at the retail level will be required in Japan
beginning April 1, 2000.
Note: The European Union requires country-of-origin labeling for
loose and packaged fresh produce.
INFORMATION ON OUTBREAKS OF
ILLNESSES RELATED TO FRESH PRODUCE
========================================================== Appendix II
Table II.1 provides information on the 98 outbreaks of
produce-related illnesses that were identified between 1990 and 1998
by the Centers for Disease Control and Prevention (CDC).
Contamination may occur when fresh produce is grown, harvested,
washed, sorted, packed, transported, or prepared. As the table
shows, food safety officials could not identify the source of the
contamination in 86 of these cases. Food safety experts believe that
there is not sufficient information to assess the relative safety of
fresh produce from the United States and foreign countries.
Table II.1
Outbreaks Associated With Fresh Produce
in the United States Reported to CDC,
1990-98
Country of Implicated\a Cause of
Year origin commodity Pathogen contamination
----------------- ---------------- ---------------- ---------------- ----------------
1998 United States Alfalfa sprouts Salmonella Contaminated
(California) Senftenberg seed.
Unknown Mangos Salmonella Unknown.
Oranienberg
Unknown Fruit salad E. coli O157:H7 Unknown.
United States Cabbage (cole E. coli O157:H7 Unknown; field
slaw) contamination
suspected.
Unknown Lettuce E. coli O157:H7 Unknown.
United States or Cabbage (cole E. coli O157:H7 Unknown; field
Canada slaw) contamination
suspected.
United States Alfalfa sprouts E. coli O157:H7 Contaminated
seed.
United States Alfalfa sprouts Salmonella Contaminated
Havana; seed.
Salmonella
Cubana
Mexico Parsley Shigella sonnei Unknown; wash
water or ice for
packing
suspected.
1997 Unknown Melons or lemon E. coli O157:H7 Unknown; cross
bars contamination by
food handlers
suspected.
United States Alfalfa sprouts E. coli O157:H7 Contaminated
(Idaho) seed.
United States Alfalfa sprouts Salmonella Contaminated
(Kansas and Infantis; seed.
Missouri) Salmonella
Anatum
Guatemala Raspberries Cyclospora Unknown;
cayetanensis nonpotable
water\b may have
been used in
pesticide spray
mix.
Unknown Mesclun lettuce Cyclospora Unknown.
(baby lettuce) cayetanensis
Unknown Basil Cyclospora Unknown.
cayetanensis
Unknown Lettuce salad Shigella sonnei Unknown; food
handler
suspected.
United States Salad Salmonella Cross
Enteritidis contamination
from turkey.
Unavailable Red cabbage in Unknown Unavailable.
vinegar
1996 United States Alfalfa sprouts Salmonella Contaminated
(California) Montevideo; seed.
Salmonella
Meleagridis
Unknown Lettuce E. coli O157:H7 Unknown.
Guatemala Raspberries and Cyclospora Unknown;
blackberries cayetanensis nonpotable
water\b may have
been used in
pesticide spray
mix.
United States Mesclun mix E. coli O157:H7 Unknown;
(California) (baby lettuce contamination in
mix) the field
suspected.
Unavailable Lettuce Unknown Unavailable.
Unavailable Salad Unknown Unavailable.
Unavailable Green salad Unknown Unavailable.
Unavailable Green salad Unknown Unavailable.
Unavailable Tossed salad Unknown Unavailable.
1996-95 Imported Alfalfa sprouts Salmonella Contaminated
(country-of- Newport seed.
origin unknown)
1995 Unknown Salad or E. coli O157:H7 Unknown.
sandwich
Unknown Caesar salad E. coli O157:H7 Unknown; food
handler
suspected.
Unknown Unknown (produce Cyclospora Unknown.
suspected) cayetanensis
Imported Alfalfa sprouts Salmonella Contaminated
(country-of- Stanley seed.
origin unknown)
United States Romaine lettuce E. coli O157:H7 Cross
(Idaho) or red cabbage contamination
with raw meat
product during
preparation.
United States Leaf lettuce E. coli O157:H7 Unknown; field
(Montana) contamination
likely but
unsanitary
handling
practices at the
grocery store
may have also
occurred.
United States Iceberg lettuce E. coli O157:H7 Cross
contamination
from ground
beef.
Unavailable Lettuce Norwalk-like Unavailable.
virus
United States Salad Salmonella Contaminated by
Enteritidis asymptomatic
food handler.
Unavailable House salad Unknown Unavailable.
1994 Unknown Cole slaw or E. coli O157:H7 Unknown.
soup
Unknown Potato salad E. coli O157:H7 Unknown.
Unknown Salad bar E. coli O157:H7 Unknown; cross
contamination
with raw ground
beef suspected.
Unknown Lettuce E. coli O157:H7 Unknown; food
handler
suspected.
Mexico Green onions Shigella Unknown;
flexneri 6 contamination at
harvest
suspected.
Unknown Fruit salad Campylobacter Unknown; cross
jejuni contamination
suspected.
Unavailable Pineapple E. coli O11:H43 Unavailable.
Unknown Lettuce Salmonella Unknown; food
Thompson handler
suspected.
Unavailable Salad bar Viral Unavailable.
Unavailable Tossed salad Unknown Unavailable.
Unavailable Greens (edible Unknown Unavailable.
fern fronds)
Unavailable Strawberries Unknown Unavailable.
Unavailable Salad bar Unknown Unavailable.
Unavailable Spring salad Unknown Unavailable.
Unavailable Tossed salad Unknown Unavailable.
1993 United States Tomatoes Salmonella Unknown; wash
(South Carolina) Montevideo water suspected.
Unavailable Sliced Salmonella Unavailable.
watermelon Javiana
Unknown Vegetable salad E. coli O157:H7 Unknown; cross
contamination
suspected.
Unknown Salad bar, E. coli O157:H7 Unknown.
lettuce or
cheese
Unknown Cantaloupe from E. coli O157:H7 Unknown; cross
buffet contamination
suspected.
United States Salad (carrots) Enterotoxigenic Unknown;
E. coli (ETEC) contaminated
carrots
suspected.
United States Tabouleh salad Enterotoxigenic Unknown;
(carrots) E. coli (ETEC) contaminated
carrots
suspected.
Unavailable Melon and Campylobacter Unavailable.
strawberries jejuni
Unknown Carrot and Hepatitis A Unknown; food
celery sticks handler
suspected.
Unknown Lettuce Salmonella Unknown;
Heidelberg foodhandler or
cross
contamination
suspected.
Unavailable Green salad Salmonella Unavailable.
Infantis
Unavailable Muskmelon and Unknown Unavailable.
honeydew
Unavailable Green beans or Unknown Unavailable.
okra
1992 United States Vegetable E. coli O157:H7 Unknown; manure
in home garden
suspected.
Unavailable Salad Unknown Unavailable.
Unavailable Tossed salad Unknown Unavailable.
Unavailable Tossed salad Unknown Unavailable.
Unavailable Fruit salad Unknown Unavailable.
Unavailable Green salad Unknown Unavailable.
1991 United States Cantaloupe Salmonella Poona Unknown;
(Texas) and contamination in
Mexico field suspected.
Unavailable Salad bar Hepatitis A Unavailable.
Unavailable Fresh fruit Giardia lambia Unavailable.
United States Watermelon Salmonella Unknown;
(Florida) Javiana improper
handling
(temperature
abuse)
suspected.
Unavailable Tossed salad Unknown Unavailable.
Unavailable Tossed salad Unknown Unavailable.
Unavailable Fruit Unknown Unavailable.
Unavailable Cantaloupe Unknown Unavailable.
Unavailable Spring salad Unknown Unavailable.
Unavailable Salad Unknown Unavailable.
1990 Central America Cantaloupe Salmonella Unknown;
and Chester possible
Mexico contamination
from ice used in
shipping.
Unknown Alfalfa sprouts Salmonella Unknown.
Anatum
Unavailable Lettuce Hepatitis A Unavailable.
United States Tomatoes Salmonella Unknown; wash
(South Carolina) Javiana water suspected.
Unavailable Salad bar Giardia lambia Unavailable.
Unavailable Salad Salmonella Unavailable.
Montevideo
Unknown Raw vegetables Giardia lambia Unknown.
Unavailable Salad bar Unknown Unavailable.
Unavailable Lettuce Unknown Unavailable.
Unavailable Lettuce salad Unknown Unavailable.
Unavailable Salad bar Unknown Unavailable.
Unavailable Tossed salad Unknown Unavailable.
Unavailable Lettuce Unknown Unavailable.
Unavailable Green salad Unknown Unavailable.
Unavailable Salad Unknown Unavailable.
Unavailable Fruit cup Unknown Unavailable.
-----------------------------------------------------------------------------------------
Note: CDC obtains reports of outbreaks primarily from state and
local health departments. "Unavailable" describes information not
reported to CDC. "Unknown" describes information that CDC and state
and local health departments did not determine.
\a The information implicating fresh produce as the source of
contamination is not necessarily conclusive for all of the outbreaks
shown in the table.
\b Water unsuitable for drinking.
Source: Preliminary data from CDC.
OBJECTIVES, SCOPE, AND METHODOLOGY
========================================================= Appendix III
As requested by the Senate and House conferees for the Omnibus
Consolidated and Emergency Supplemental Appropriations Act, 1999,\18
we reviewed a number of issues associated with the potential costs
and benefits of a mandatory labeling requirement. Specifically, this
report provides information on (1) the potential costs associated
with compliance and enforcement of a mandatory country-of-origin
labeling requirement at the retail level for fresh produce, (2) the
potential trade issues associated with such a requirement, (3) the
potential impact of such a requirement on the ability of the federal
government and the public to respond to outbreaks of illness caused
by contaminated fresh produce, and (4) consumers' views of
country-of-origin labeling. Finally, appendix I identifies U.S.
trading partners that have country-of-origin labeling requirements
for fresh produce, the nature and scope of those requirements, and
the record of U.S. challenges to those requirements.
To determine the potential costs associated with compliance and
enforcement, we interviewed officials and reviewed documents from
USDA's Agricultural Marketing Service and the Foreign Agricultural
Service; the U.S. Customs Service; the Food and Drug Administration;
and the International Trade Commission. We also interviewed
officials from the Food Marketing Institute and the Florida Retail
Federation and visited several Florida groceries�both large chains
and small independent stores--to examine how imported produce is
labeled and how inspections are conducted. We interviewed officials
from the United Fresh Fruit and Vegetable Association; the Food
Industry Trade Coalition, which included representatives from the
Food Distributors International, the National Grocers Association,
ConAgra, Inc., the Chilean Fresh Fruit Association, the National
Fisheries Institute, the Meat Importers Council of America Inc., the
American Food Institute, and the National Food Processors
Association; the Fresh Produce Association of the Americas; the
Florida Fruit and Vegetable Association; the Northwest Horticultural
Council; the Western Growers Association; and Chiquita Brands, Inc.
To determine compliance and enforcement with state labeling laws, we
interviewed officials from agricultural departments in Maine, Texas,
and Florida.
To determine the potential trade implications, we reviewed documents
and interviewed officials from the Office of the U.S. Trade
Representative, the Foreign Agricultural Service, the Department of
State, and the World Trade Organization. We also examined
international trade agreements.
To identify U.S. trading partners that have country-of-origin
labeling requirements for fresh produce, we reviewed the survey
conducted by the Foreign Agricultural Service, 1998 Foreign Country
of Origin Labeling Survey, February 4, 1998. In addition, we
developed a questionnaire to determine the nature and scope of other
countries' labeling requirements, which the Service sent
electronically to the U.S. embassy agricultural attach�s for 45
countries. Twenty-eight of the countries were selected because they
are the countries with whom we import or export significant dollar
volumes of fresh produce. The remaining 17 countries we surveyed
were included because they were identified as requiring
country-of-origin labeling in the Foreign Agricultural Service's 1998
survey. We received responses for 45 countries. The survey was
conducted in February and March 1999.
To determine the potential impact on the federal government's and
consumers' ability to respond to outbreaks of illness from fresh
produce, we interviewed officials and obtained documents from the
CDC, FDA, the U.S. Department of Agriculture, and Florida's
Department of Health. We also discussed these issues with consumer
groups.
To determine the potential impact of mandatory country-of-origin
labeling on consumers, we reviewed the Tariff Act of 1930 and related
regulations and rulings and discussed these issues with Customs
officials. We also examined documents and interviewed officials with
consumer groups, including the National Consumers League, the Center
for Science in the Public Interest, and the Safe Food Coalition. We
also analyzed the results of eight consumer surveys conducted from
1990 to 1998 to determine consumer opinions regarding mandatory
country-of-origin labeling. The surveys were identified by industry
experts and through literature searches. For the data we included in
our report, we obtained frequency counts, survey instruments, and
other documents, in order to review the wording of questions,
sampling, mode of administration, research strategies, and the
effects of sponsorship. We used only data that we judged to be
reliable and valid.
Five surveys, conducted between 1990 and 1998, represented households
nationwide that have purchased fresh produce in the past year. These
surveys were published by Vance Publishing Corporation for The Packer
newspaper and were published in its annual supplement, Fresh Trends.
Another nationwide survey was conducted by the Charlton Research
Group in 1996 for the Desert Grape Growers League. Two surveys of
Florida consumers were conducted by the University of South Florida's
Agriculture Institute in 1997 and the University of Florida in 1998.
We also spoke with officials and obtained documents from CDC, FDA,
the U.S. Department of Agriculture's Agricultural Marketing Service,
Florida's Department of Health, the Environmental Working Group, and
Consumers Union about the relative safety of imported and U.S.
produce.
We conducted our review from November 1998 through March 1999 in
accordance with generally accepted government auditing standards.
--------------------
\18 Conference Report 105-825 accompanied H.R. 4328, which became
the Omnibus Consolidated and Emergency Supplemental Appropriations
Act, 1999 (P.L. 105-277, Oct. 21, 1998).
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix IV
Erin Lansburgh, Assistant Director
Beverly A. Peterson, Evaluator-in-Charge
Daniel F. Alspaugh
Erin K. Barlow
Shirley Brothwell
Richard Burkard
Daniel E. Coates
Oliver Easterwood
Fran Featherston
Alice Feldesman
Paul Pansini
Carol Herrnstadt Shulman
Janice M. Turner
*** End of document. ***