WASHINGTON -- The U.S. Department of Agriculture surprised many in the food industry by increasing cost estimates for implementing and maintaining country-of-origin labeling programs to as much as $4 billion a year -- while describing as "negligible" the estimated benefits to American consumers.
Retailers, who along with producers and importers will bear some responsibility for COOL, receive some relief under the final regulations, officially released last week, and due to take effect in 2004.
Among the changes deemed helpful to supermarket operators are exemptions for salad bars, delis and other in-store food departments that provide ready-to-eat foods consumed on or outside the retailer's premises; and an allowance permitting commingling of items in a bulk container used for retail display, provided the commodity is individually labeled.
Another modification reduces the liability quotient for retailers handling mislabeled commodities if they could not have been reasonably expected to have had knowledge of the violation.
"It's good the liability has been taken away, but there's going to be a lot of cost at store level," said Steve Berlin, produce manager at Kowalski's flagship store in Woodbury, Minn. "We haven't had time to read the whole thing, so right now our response is we'll certainly follow the law, but there's going to be a cost and eventually we'll have to pass it on to the consumer. We don't feel good about that."
Mike O'Brien, vice president, produce, for St. Louis-based Schnuck Markets, agreed, saying that COOL still lacks concrete value for the consumer.
"It will increase costs in the system, there's no doubt," he told SN. "The bottom line is it's going to cost the industry $3.9 billion, and I'm still questioning the value of it."
But not all retailers are opposed to the measure, which is part of the 2002 Farm Bill. Rudy Dory, owner, Rudy's Newport Market, Bend, Ore., believes the concept of COOL is sound, but its execution in government hands is seriously flawed.
"Whenever the government does something like this, it's always less effective and costly than they thought it would be," said Dory. "The consumer pays in the long run. It's unfortunate the government felt it had to do this."
Jack Gridley, meat/sea-food director for Dorothy Lane Markets, Dayton, Ohio, said he is looking for COOL to help give the three-store independent a higher profile in the communities it serves.
"It's good for upscale retailers. We use only Coleman beef, for instance, and they already have a traceability system in place. The big plus there is Coleman controls the origin of the cows. We have confidence in them," Gridley said. "For seafood, it's a plus. We have salmon from Scotland that's organically fed. Customers will know why they're paying more for it than they are down the street."
