Time's up. Are your private labels ready?
As of yesterday, most food products regulated by the Food and Drug Administration were required to carry new nutritional labeling information mandated by the Nutrition Labeling and Education Act of 1990.
The entire industry -- branded and private label, vendor, wholesaler and retailer -- has been scrambling to analyze products for nutritional content, then redesign and reprint thousands and thousands of labels to ensure compliance with the law.
For private label, however, the scramble has been especially tough and complex, and many products and distributors in the industry were expected to be less than 100% in compliance by this week.
"I would say the private-label industry, as far as we can tell, is about 70% or so complete in terms of having new labels ready," said Tuck Jasper, president and chief executive officer of Shurfine Central Corp., a major private-label buying group for retailers. "It has been a huge mess, with tens of thousands of labels to be changed." Shurfine has been a lead player in the attempt to gain relief from the timetable for label reform.
Industry sources said the private-label industry struggled right up to the wire to try to get its labels ready, and at the same time to press for extensions beyond what it considered an "impossible" deadline.
The problem of meeting the deadline for compliance has been particularly acute for private label since it has involved the revamping of many more labels than the typical branded manufacturer.
"At just Shurfine, we had about 6,000 labels that needed to be changed. If you consider the other top marketing companies, such as Topco, Federated and quite a few others, you are probably
talking about 50,000 labels. And if that is about 20% of the entire industry, you can start to get a sense of the magnitude of this problem," Jasper said.
Apparently, however, the FDA does not have the same sense that the task has been overwhelming for store-brand distributors. "We have been working relatively closely with the FDA for three years, to try to impress upon the government the impossibility of the task as it relates to the private-label industry," said Brian Sharoff, president of the Private Label Manufacturers Association, which on behalf of private-label vendors and retailers has been advocating compliance that is more "reasonable and doable.
"The FDA has said they would look at extensions on a case-by-case basis. Then about a month and a half ago, they announced that their case-by-case extensions would be limited to unforeseen extenuating circumstances, such as if a plant blows up or something," Sharoff said.
"We have done everything we can do on the private-label side. But that does not mean our guys are happy," he said. "They are not. Many retailers and wholesalers will have labels with some serious problems. The government is not giving the industry the relief or remedy it is asking for in the form of extensions. This will cause tremendous confusion and hardship."
Jasper said that the immediate responsibility for labeling falls on the private-label manufacturers, as it does for national-brand packaged goods. "We have 400 suppliers that have labels impacted by the NLEA, and it is the point of labeling where enforcement will happen. I'm sure that is where the FDA will be looking for compliance at first, not in stores."
But for manufacturers still unprepared with labels as of this week, there are several major ramifications, Jasper explained. "One, you don't sell the products. There are products that cannot be shipped until the new labels are ready, which will have a fairly significant economic impact on retailers and on consumers, since they won't have the products available they have been used to buying."
