COOL Summary
Hello, this is PMA PR Director Julia Stewart and welcome back to PMA’s audio series, “Ask Dr. Bob Whitaker.” With us today is PMA’s government relations consultant, Tom O’Brien of O’Brien DC, from Washington, D.C. Tom is here to talk about country of origin labeling – also known as COOL. In particular, he’s here to talk about the brand new interim final rule from the U.S. Department of Agriculture regarding COOL for produce and other commodities. Tom, I have two questions for you – first, why is this an interim final rule, and what does that mean? And second, what is the average PMA member going to want to know about what’s in that interim final rule, and what they need to be able to do when it goes into effect on Sept. 30?
Tom O’Brien:
To answer your first question, it’s an interim final rule because the agency’s rulemaking process isn’t over yet. The term “interim” is not that important – what matters is that these rules become law on September 30, and in the meantime that USDA wants to hear what they got wrong and right, and will be accepting comments from us.
And to your second question, here are the basic highlights of the rules on COOL:
- What commodities does it apply to? COOL applies to fresh and frozen fruits and vegetables – the same foods that are covered by the Perishable Agricultural Commodities Act. It applies as well to peanuts, macadamias, pecans and ginseng, and various meats.
- What does origin mean? For produce, it’s simply where the product is grown.
- What commodities are excluded? Processed foods are excluded, and USDA has a very broad definition of “processed.” For example:
- Any two or more substantial commodities combined in a single package is considered processed, and therefore COOL does not apply. A single commodity that is chopped, such as romaine, would need to be labeled, because it is still a single commodity and therefore would have to have COOL information at retail. USDA’s rules take the position that different varieties of a commodity such as red and green leaf lettuce combined together remain a single commodity that must provide the COOL information.
- But if you combine two or more substantial commodities combined in a single package is considered “processed,” and therefore COOL does not apply. A bagged salad mix of lettuce and carrots, or even a mix of chopped lettuce with dressing does not have to have COOL information.
- Processing can take many forms beyond just the combination of several commodities. While chopping is insufficient as I mentioned to make a commodity “processed”, roasting or other processing does remove the COOL obligation, because roasting is a significant process. On the other hand, apple slices that have been treated to prevent browning must be labeled, because it’s still all apples and the anti-browning treatment addition is minor.
- How are the foods to be marked, those that have to have COOL? Fortunately, we have a lot of latitude here, as long as the information gets to consumers – it’s up to us whether to use a sticker, a band, a twist tie, or a label or sign. It is perfectly acceptable to provide the origin information by use of a shipping carton marked with COOL in a display. If you are using a sticker, it doesn’t need to be on every item, just on a majority. Labels that denote the state, region or locality of the produce are satisfactory – for example, “Washington apples” or “Florida Fresh” – are sufficient. This applies to non-U.S. regions as well.
- What about recordkeeping? The key question here is whether the product is pre-labeled. That question determines whether or not there is an obligation to provide origin information. If produce carries the information on its package or a sticker, then no other recordkeeping of the origin is required as that labeled product travels through the supply chain. However, if it not prelabeled, if instead is going to have a store sign created at retail, then the person responsible for initially labeling the product must keep records to prove the truthfulness of the claim, and all others must be able to trace the product back to the originator of the claim.
- If the commodity is not pre-labeled, such as a bulk product, then the COOL information must travel with the product so that the retailer can provide the information to consumers, often by producing a sign. Retailers must retain the origin information ONLY for those items that are not pre-labeled. These records – and they can be bills of lading or other information, and they can be electronic or paper – can be kept anywhere; the retailer is not required to maintain the records at the store.
- What are the penalties for failing to comply? USDA will only impose penalties on retailers if their actions rise to the level of “bad faith”, which it defines as failing to comply after a warning with 30 days to reply. The retailer will first be notified by USDA, then have a chance to correct the problem. Only then can USDA impose fines, and the maximum fine is $1,000 per violation.
- USDA has said, however, that it will spend the first six months on outreach and education about the rules, and will not issue any fines during that time.
Julia:
Thank you, Tom, for that summary. We know COOL is a hot topic with PMA members, as more than 850 sites registered for a Webinar that we held on the rule on Aug. 6.
Our listeners should know that PMA has several resources available to help them implement COOL by the Sept. 30 deadline.
- If you missed the Aug. 6 Webinar, you can listen to a recording of it free of charge, by visiting the COOL resource page at PMA’s Web site. Go to www.pma.com, then to Issues, then to the Country of Origin Labeling page. (Reading this transcript? Go to http://www.pma.com/issues/labeling.cfm.) That’s also where you’ll find USDA’s answers to the questions posed by your peers during the webinar.
- You will also find COOL best practices on that page that were developed by a joint task force of PMA and Western Growers members from across the entire supply chain.
- And finally, we will host a workshop at our Fresh Summit Convention & Exposition in October, by that time we will have lots of feedback on how compliance is going to share with members. For more information about that conference, visit www.pma.com/freshsummit.
We know this is an important topic for our members, and we’re working hard to get you the information you need to make compliance as easy as it can be for you.
Thanks to Tom, very much to our listeners, please join us again next time!