Supply Scan

News and trends from across the food supply chain.

Railex is also shipping produce on the return trip to the West Coast, though only a few cars so far. The company is planning on an aggressive expansion program in the coming year, including the addition of a second train for the Wallula to Rotterdam run, as well as other destinations in the Southeastern United States and California. —Brian Schiavo

FMI Says COOL Isn't Cool For Retailers

Mandatory country of origin labeling (COOL) for seafood is failing to deliver the benefits promised by the law, according to a statement issued by The Food Marketing Institute (FMI), Arlington, VA.

FMI says the COOL regulation has not increased sales of U.S. seafood. At the same time, the supermarket industry's cost to comply with the law is up to ten times higher than the U.S. Department of Agriculture (USDA) estimated when it issued the interim final rule for labeling seafood.

Proponents of mandatory COOL are nonetheless urging Congress to implement the law for produce, meat and peanuts sooner than September 30, 2008. FMI says the move would be extremely unwise given the industry's two and one-half years of experience labeling seafood under this law.

FMI presented comments to USDA last month in response to the agency's request for cost and benefit information.

"The industry's experience underscores the need to replace the law with a flexible, industry-led program that would be far less costly and provide information that would actually resonate with consumers, such as 'Wild Alaskan Salmon,' 'Georgia Peaches' or 'Vidalia Onions,'" says Tim Hammonds, FMI's president and CEO.

"Because of limited label space and limited time for busy consumers to make their decisions, when government continually mandates requirements for signs and labels that generate large fines for noncompliance, we have the labeling equivalent of Gresham's Law: Bad information drives out the good.

"A law this flawed cannot be corrected simply by tinkering with the administrative rules. The likely result of tinkering around with the margins would be to make the bureaucratic nightmare and the resulting costs even worse, not better. The only way out of this mess is to replace the current law with something useful."

The comments contrasted USDA's first-year cost estimates to implement the law for retailers and their intermediary suppliers with the industry's actual expenses based on FMI case studies involving more than 1,000 stores.

The USDA estimate of the retailer cost per store was $1,530, but the actual cost was somewhere between $9,000 to $16,000. The USDA estimate of the supplier cost per company was $1,890, but the actual cost was $200,000 to $250,000.

The food industry has proposed an effective, flexible labeling model that would communicate the same information in ways consumers would actually find useful without driving costs sky high.

"It is time for Congress to correct its mistake and let the industry implement a plan that delivers more without building in the excessive costs that ultimately discourage consumers from buying the seafood we all want to promote," says Hammonds.

Whole Foods Guarantees Responsible Sourcing

With growing consumer concern about ethical and responsible trade, Whole Foods Market has created a buying program to ensure that its products from developing countries meet a strict set of criteria.

"We have a long track record concerning ethical business practices, equitable pay for team members and suppliers and safe working environments," says John Mackey, co-founder and CEO of the Austin, TX-based company.

"We are extending that concern to the global community by bringing products from developing areas to the marketplace in a way that is a win-win for all."

Dubbed the Whole Trade Guarantee, the program ensures:

Exceptional product quality: Each Whole Trade product must meet the same strict quality standards that guide the company's buyers every day in decisions about which products to offer shoppers.

More money for producers: Producers receive a premium price for their goods as an investment in their communities, allowing them to put money back into and continually improve their operation and cover their cost and production fluctuations.

Better wages and working conditions for workers: The program gives low-income producers a market to sell their products while ensuring better wages and working conditions for workers.

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