GMA Conference Highlights Legislative Issues

MARK HAMSTRA

WASHINGTON — The implementation of the Food and Drug Administration Food Safety Modernization Act is a top priority for food suppliers as the Grocery Manufacturers Association Executive Conference kicks off this week in Colorado Springs.

Pamela Bailey

“The biggest challenge is just the sheer scope of the legislation, and the impact it will have on our member companies,” Pamela G. Bailey, president and chief executive officer, GMA, told SN last week. “It is probably our most ambitious scope of work in the next year.”

GMA has been collecting relevant information from its member companies “and conveying it in a way that is helpful to the FDA, and we are very pleased with the way that process is going,” she said.

As FDA seeks to finalize the regulations and guidelines that will define the far-reaching law, GMA has been working closely with the administration.

“FDA has been a very good partner with the industry on this,” Bailey said. “It's been a very good dialogue.”

GMA also has organized a monthly meeting in Washington with other trade associations — more than 50 altogether — to share input on implementation of the law.

“This is going to be a particularly important new law for smaller and medium-sized companies, and we want to be sure we understand their needs and are giving them the information they need, and providing the training and education as well,” Bailey explained.

Among the new requirements, starting in mid-2012, companies will need to have a comprehensive food-safety plan that looks at hazards and preventive controls in their registered facilities.

In addition, the law has “enormous implications” for the food-safety supply chain outside the U.S., Bailey said. GMA has been working with FDA, the U.S. Trade Representative's office, the Asia-Pacific Economic Cooperation and now the World Bank to develop a model food-safety program for developing economies overseas.

“That is a public-private partnership with the World Bank, and with the engagement of the FDA, that will serve as a model going forward,” Bailey explained. “It is based on what the FDA commissioner [Margaret Hamburg] announced and her vision for the agency in a global economy, in which FDA has to be a global agency. We can't rely on inspectors at the borders to be the primary defense against food-safety problems from the global supply chain.”

Other legislative and regulatory priorities for GMA include opposition to the Federal Trade Commission's proposed restrictions on advertising to children.

“We feel our member companies have a very strong record of self-regulation,” Bailey said. “We have significantly reduced the number of ads, they have fallen by more than half, and there are virtually no sodas, candies or cookies advertised any more to children. We have a very strong record of accomplishment, and we believe the guidelines the Federal Trade Commission has announced are not only unnecessary but would be damaging to the economy.”

The restrictions could cost 74,000 jobs, she said.

“We think [President Obama] had it right when he asked the independent agencies to do cost-benefit analyses before they issued proposals such as these,” Bailey said. “We are confident the benefit is not there, and the cost is way too high for any potential return.”

GMA is also continuing to push for the elimination of tax breaks for ethanol production.

“We were a lone voice in the wilderness on this topic for a long time, with the suggestion that it really was a hopeless policy to try to turn around, given how entrenched the public subsidies of ethanol were,” Bailey said. “Now conventional wisdom is that whatever deficit-reduction package is finally put in place will include serious reductions in tax subsidies for ethanol.”

GMA also is pressing Congress to pass free-trade agreements with Panama, Colombia and South Korea.

“Those are very important markets for our companies, with growing middle-class consumer bases,” Bailey said. “Now with the European agreement with Korea, and similar agreements in effect with Canada between Colombia and Panama, there are incentives for our exported basket of goods to be replaced by a similar basket of goods from Europe because of the tariffs being more favorable to European products.”

REDUCING FOOD WASTE

Another area of focus for GMA is sustainability, with the second industry Sustainability Conference, a joint effort with Food Marketing Institute, scheduled for next month in Scottsdale, Ariz.

“That was a huge success in 2010,” said Bailey. “The conference has a very strong mix of initiatives that retailers and manufacturers both can utilize within their companies to deliver on their sustainability commitments.”

The top priority in the next year for GMA as it relates to sustainability, she said, is to continue a stakeholder dialogue on food waste involving retailers, manufacturers, food banks, waste managers, foodservice companies and restaurants. With 34 million tons of food a year going into municipal landfills, and less than 3% of that being diverted to food banks, the parties involved see opportunities for improvement, Bailey explained.

“Together we are putting together a multifaceted strategy for how we can not only decrease the amount of food waste each year, but increase the amount diverted to food banks,” Bailey said.

She also said GMA members would be brought up to speed on the implementation of Nutrition Keys, the front-of-pack nutrition-labeling program that GMA and FMI are also working on collaboratively.

Some retailers and manufacturers have already begun to use Nutrition Keys in the marketplace, but it will probably be early next year before the implementation reaches “critical mass” and the associations can begin promoting the effort to consumers, Bailey said.

The associations have been working with the U.S. Department of Agriculture and FDA on “a number of regulatory issues” related to the labeling program, “but we think that work is coming along well,” she added.

The executive committees of FMI and GMA will also meet in Colorado Springs to discuss value chain issues, and address the agenda for 2012.

“We continue to be pleased with how working together is helping improve focus on value chain issues,” Bailey said. “One topic that will be discussed in multiple venues in Colorado is how we can work together to grow our market in the U.S.”

As far as the economy is concerned, Bailey said members are “facing the same factors their consumers are — they are concerned about growth in the economy, the high unemployment rate.

“Last year was better than 2009, as it was the first part of this year. But we are looking at gas increases, commodity increases in a tepid national economy,” she said.

Many GMA members have strengthened their brand portfolio in the last few years, Bailey explained, and many are looking overseas for the growth that they don't see in the U.S.