Where Do You Think Those Fish Sticks Are From?
If you want to know where your smartphone or blender was assembled, you just have to search its exterior. More likely than not, you'll find a label saying “Assembled in China" -- a disclosure required by the U.S. government. But what if you want to know where the frozen chicken nuggets you found in your local supermarket were processed? You can search the box, but you won’t find the answer. That's because, under U.S. law, processed meat, poultry and seafood products don't need to declare where their ingredients came from.
If anything, the labeling requirements should be the other way around. It's useful to know where your gadgets and household appliances are made, but using them isn't likely to pose a hazard to your health. The same can't be said for processed foods made in countries with lax food regulations. (China, in particular, has frequent food safety scandals.) That's why the U.S. Food and Drug Administration shouldn't delay in changing its labeling rules.
This would be a less pressing issue if America’s overseas food suppliers were inspected on a regular basis. But as recently as 2013 there were 278,307 foreign food suppliers registered with the U.S. government -- and a total staff of merely 50 people working in the foreign offices of the FDA. They do their best, presumably, but the results are underwhelming. According to a January report on FDA efforts to ensure the safety of imported food, the agency conducted 1,323 inspections of overseas food suppliers in 2013, down by 80 inspections from 2012, and far short of the 4,800 required by U.S. law. (A figure that, in any case, would only ensure annual inspections of less than 2 percent of overseas U.S. food suppliers.)
Sensible labeling laws could partly make up for inadequate international inspections. At the very least, labels would give consumers a chance to decide if they want to buy products that haven't been subject to regulatory practices required in the United States.
Unfortunately, under current law, American consumers only have the right to know the origins of raw foods. As soon as those raw ingredients are combined or changed -- via cooking, say -- they’re no longer subject to country-of-origin-labeling requirements. So, for example, a frozen mackerel filet from China is labeled with its country of origin. But if part of that filet is sent down a fish stick production line, it can be sold in the U.S. without any hint of where it was manufactured.
From a business standpoint that loophole is sensible, because complying with country-of-origin labeling requirements can be expensive. In 2008, for example, the U.S. Department of Agriculture estimated that recently-passed country-of-origin labeling requirements for raw foods like beef would cost food producers $2.5 billion in upfront costs, and $211 million per year going forward. Labeling requirements for processed products with multiple ingredients -- like fish sticks -- would presumably cost even more due to the expense of tracing the origins of ingredients that might themselves be processed.
But exempting processed foods makes no sense from a food safety standpoint. A contaminated product doesn't become safer just because it has landed on a processing line. If consumers have a right to know whether certain types of raw fish at the supermarket trace back to Chinese fish farms -- which have a reputation as breeding grounds for disease -- they should also know if those same fish are in other products in their shopping carts.
Consider the unfortunate example of Yantai Shanhai Foodstuff, a seafood processing company in Yantai, China that exports “vinegar-soaked mackerel pieces” -- a processed food product -- to the United States. Two weeks ago the FDA released a letter sent to the company outlining stomach-churning food safety problems encountered during an inspection, including refrigeration and sanitation issues. In the letter, the short-staffed FDA demanded remedial action (“ensure that the fish are not exposed to time and temperature abuse conducive to scombrotoxin”), but imposed no penalties.
Would point-of-origin labeling protect consumers in this instance? It's true that most American consumers will never hear of Yantai Shanhai Foodstuff, and the hazards of its vinegar-soaked mackerel pieces. But they may have an inkling about the FDA's insufficient overseas inspections and China’s poor food safety record, and on that basis choose to avoid purchasing food -- including vinegar-soaked mackerel -- produced there. It's hard to argue consumers don't deserve to have that choice.
Now would be a perfect time for the U.S. government to push for more stringent labeling rules. Last year Canada and Mexico won a WTO complaint against U.S. country-of-origin-labeling rules on meat after claiming they are discriminatory trade barriers. In response, Congress has asked the U.S. Department of Agriculture to provide recommendations for overhauling its rules.
In doing so, the USDA should recommend a more fundamental overhaul, including the extension of country-of-origin labeling to processed foods not covered by the WTO ruling. That would be an ambitious proposal, but also an important step in the direction of protecting U.S. consumers.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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