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AMI Says No Evidence of Benefit to Mandatory Country-of-Origin Labeling

Thursday, May 1, 2003

Austin, TX – There is no evidence that mandatory country-of-origin labeling will benefit livestock producers, meat packers, retailers or consumers, according to American Meat Institute Senior Vice President of Regulatory Affairs and General Counsel Mark Dopp. Dopp spoke at a USDA-sponsored public “listening session” about the new law, which goes into effect in September 2004.

“AMI members are proud and patriotic, and we support a company’s right to market and promote American meat. But we oppose a mandatory country-of-origin labeling scheme that is a randomly focused, half-hearted attempt to provide consumers with product information in which they have neither interest, nor the inclination to pay for it,” he said. “This regulatory mandate will impose significant new costs on our industry; discriminate against imported products and threaten our U.S. exports.”

In his remarks, Dopp offered a detailed rebuttal to arguments by the law’s proponents. While some proponents contend that food safety concerns justify mandatory country-of-origin labeling, he said there is no substance to this argument.

“Federal law requires all imported meat to be processed under an inspection system equivalent to the one administered by USDA,” he said. “Moreover, the labeling law will require different labels on meat, which may be derived from animals born in Mexico, Canada, and the U.S. -- even though all three animals may be slaughtered within minutes of each other at the same plant in Nebraska, under the supervision of the same USDA inspector, and in compliance with the same regulatory criteria.”

Dopp also said that arguments that country-of-origin labeling is a consumer right-to-know issue are disingenuous. “If this is the case, why do consumers only have the right to know the origin of meat and not poultry? Or peanuts, but not walnuts or almonds? And why does the consumer only have the right to know the origin of some foods purchased in retail stores, but not foods consumed in restaurant,” he said, noting that approximately half the food Americans eat is at foodservice.

Dopp said that a poll done last year by the International Food Information Council asked consumers if there is information that is not currently on food products that consumers would like to see. Three quarters of consumers said no, and those who said yes did not request country-of-origin labels.

Claims that U.S. labeled meat will sell for premium that will increase the value of U.S. livestock are based on a flimsy premise, Dopp said.

“The marketplace is very opportunistic, yet no one is voluntarily marketing U.S. labeled meat because consumers are not willing to pay a premium for such a product, like they are for Certified Angus Beef or Omaha Steaks,” he said. “Even if retailers may be able to charge more for “All American” products, any reasonable premium will not off-set the substantial costs, estimated to be in the billions, that retailers, packers, processors, and producers are sure to incur? And if no price premium exists, as seems likely given the absence of such labeling programs in the market today and the fact that no one has ever used a voluntary U.S. beef program that has been available from USDA for some time, then there is no additional revenue to offset the enormous costs of implementing mandatory country-of-origin labeling.”

Country-of-origin labeling also stands to create enormous disruptions in the international trade arena, he said. The U.S. exports more than $1.2 billion worth of beef and pork to Canada and Mexico. Central Canada has a thriving feeder pig industry that supplies hogs to Midwest producers. Western Canada also has extensive feedlots and packing plants supplying fresh beef along our West Coast. The efficient, duty-free flow of livestock and meat will cease under mandatory country-of-origin labeling.

“This thinly veiled non-tariff trade barrier imposes a duty on retailers and packers to provide accurate country-of-origin information and allows civil penalties to be assessed for noncompliance,” he said. According to Dopp, only those who produce and supply livestock can provide that information – not the packer and not the retailer.

“To ensure the accuracy of the label and the information supporting it, as well as limiting exposure to regulatory enforcement actions, retailers and packers must be able to insist on adequate and accurate records by their livestock suppliers and must be able to verify the accuracy and adequacy of those records,” he said. “Under the law, the retailer and the packer will bear the brunt of the regulatory burden if the producer’s information is wrong, either through negligence or through fraud.”

Dopp also will be presenting testimony at USDA-sponsored listening sessions in Pasco, WA; Kansas City, MO; Kearney, NE; and St. Paul, MN.

AMI represents the interests of packers and processors of beef, pork, lamb, veal and turkey products and their suppliers throughout North America. Together, AMI's members produce 95 percent of the beef, pork, lamb and veal products and 70 percent of the turkey products in the U.S. Headquartered in Washington, DC, the Institute provides legislative, regulatory, public relations, technical, scientific and educational services to the industry. Its affiliate, the AMI Foundation, is a separate 501(c)3 organization that conducts research, education and information projects for the industry.

For more information contact:
Janet Riley
Senior VP, Public Affairs
Dan Murphy
Vice President, Public Affairs

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