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.


FMI continues to work with Congress as the bill moves through the legislative process. “We want to make sure they are aware of the real-world operational aspects of the food supply chain because what may sound good to them on paper might not make sense with the way it would be implemented in the everyday business world,” Billings states. “We are educating them on how our industry is fixing our own problems, showing them the success of initiatives such as the Produce Traceability Initiative.”

FDA Authority: Too Much Too Fast?

The powerful authority this bill grants to the FDA has some troubled. For instance, Eisen at IFDA notes that the additional paperwork required could mean member companies may face civil monetary penalties up to $250,000 per violation, with a $1 million cap per proceeding. “So a company could face severe penalties for minor violations, which is of grave concern to our members,” he says.

Additional costs are yet to be determined as the bill faces modifications. “But there would be changes to the way everyday business is run,” states Billings at FMI. “The bill also calls for a new traceability system, although it doesn’t define what that system will look like. There will be costs associated with this new system.” As for penalties, Billings adds his organization is working to ensure the PCAs of the world will be punished at a more harshly than companies who make an unintentional mistake.

Billings acknowledges the industry needs a better traceability system, but it is unclear whether the current one-up, one-down system will be completely replaced by a new one since the legislative language is vague and offer no implementation timelines. “The FDA will work with the industry to create a new system that could include new technologies,” he says. “We support one-up, one-back and it should not be retailers’ responsibility to do extensive data collections at the end of the supply chain.”

This echoes the concerns of folks at IFDA, IWLA and AWMA. Anderson at IWLA reports the association is seeking an amendment to the bill that states its members are exempt from any fines or penalties as a result of a recall.

“We are educating them about our role in the supply chain, advising them that we only store the goods. They have to understand that the bill’s current language can result in putting a huge part of the supply chain out of business –namely our member companies,” says Anderson.

He adds that the public would be no safer if IWLA were to follow the provisions. “Anytime you see contamination along the food logistics supply chain it has not occurred on the warehousing or trucking side—it has occurred at the origin of production,” he contends.

AWMA is working with other like-minded trade associations and businesses to ensure more reasonable and effective food safety regulations are ultimately enacted. “We believe consumer health and well-being and the vitality and growth of our industry can work hand-in-hand as we promote food safety initiatives,” says Holloway.

Continuing Education

Sansolo rallies the industry to make its voice heard by finding a common message to send to Congress.

“This is the perfect time for some grassroots lobbying,” he suggests. “There could be a warehouse employing a good number of constituents; what a great opportunity to ask the district’s congressman to visit to see firsthand how some of the provisions of the bill would impact the business. This would remove the theoretical aspect many in Congress are operating under. Congress needs to know we as businessmen can offer a better approach other than nuking the whole system. We need to make ourselves the best we can be as an industry so we can work together with Congress to do the right thing.”

Look inward, reminds Sansolo. “Companies need to take a hard look internally to assure they are doing everything to enhance food safety and much of this begins with employee education. We own this topic and we need to be able to show American consumers that they can count on the food they buy from us.”

The trade associations will continue to be part of the rule-making process as they work closely with regulators to draft a final law. Many point to the Senate bill as a more acceptable approach that already has strong bipartisan support.

“We hope to see a shift from a culture of inspection and trying to stop problems that have already occurred to a culture of prevention that adopts risk-based systems throughout the supply chain,” advises Billings at FMI.

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