Will New FDA Penalties Break Your Bank?

Pricey monetary penalties are just one of many concerns over the Congressional passage of the latest food safety regulations.


Anderson and his members object to the fact that they would be subject to deleterious fines for failure to execute a recall.

“This is the nexus of the problem,” he contends. “Obligations are being imposed on us that we cannot physically respond to and because we can’t comply we would be forced out of business through these heavy fines.”

Under provisions of the bill, members would be fined $10,000 a day for not executing a recall. “The problem is Congress views the supply chain as a joint liability. The bill makes sense for companies who manufacture or purchase the goods because they are assuming liability for the quality of the products,” says Andersen. “But everyone who touches the products in between is assuming liability for safe storage and transport. Congress does not understand that the supply chain has a large number of businesses that occupy the area of logistics not related to the sale or purchase of products.”

Convenience store distributors: AWMA represents convenience store distributors, with members representing over $85 billion annually in U.S. product sales, who are gravely concerned with some provisions.

“Many of our members have small, family-owned businesses and the greatly expanded regulations and recordkeeping provisions would be unduly burdensome while providing little or no real benefit to consumer safety,” Holloway contends.

Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (Bioterrorism Act), requiring one-up, one-down traceability, companies already comply with this trace-back system rendering some provisions in HR 2749 duplicative while creating a hardship for members, states Holloway.

Additional costs include the assessment of a yearly registration fee for each facility of $500 per facility with a cap of $175,000 for a single company with multiple facilities.

“Our members already operate on a very slim profit margin and with the current economic downturn, these additional costs will be tough on our members,” Holloway says. “We are concerned that the expanded FDA trace-back system calls for an expedition of records that is far too draconian, as it would call for an expedition of records allowing the FDA to identify every person in the chain of food distribution within two business days. These expanded recordkeeping and reporting requirements would significantly impact our members, the majority of whom have nothing to do with food packaging or manufacturing.”

Foodservice distributors: IFDA member companies handle all food products found in a restaurant including fresh fruits, vegetables, meats and poultry.

“While we are supportive of the approach taken, especially in the Senate legislation, I am concerned regarding the additional paperwork and recordkeeping requirements,” says Jon Eisen, senior vice president of government relations for the McLean, VA-based organization. Most members already have HACCP plans in place and the harsh civil monetary penalties involved for not complying with additional recordkeeping requirements could put undue stress on companies’ operations, he contends.

“We are supportive of the Bioterrorism Act requiring one-up, one-down recordkeeping throughout the entire food supply chain and we believe the traceability provisions in Senate bill S-510 more properly reflect traceability within the industry,” continues Eisen. “Our members can report where they received and shipped products. So if there were a recall, we can quickly and efficiently have those products removed from shelves.”

Food retailers and wholesalers: FMI conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1,500 member companies who are food retailers and wholesalers in the U.S. and around the world. Its U.S. members operate about 26,000 retail food stores.

The organization endorsed the bill, sending a letter of support to Congress asking it to vote on the bill, reports John Billings, director of government relations for the Arlington, Virginia-based association.

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