The FDA now has teeth and if retailers are not careful, they might just get bit.
It is that time of year when the pundits dust off their crystal balls and all the reporters, including myself, are scrambling for 2013 outlook stories. If you are solely focused on economic and consumer trends, let me give you something else to chew on.
It has to do with the Food Safety Modernization Act (FSMA) that was signed into law by President Obama in 2011 with grudging and minimal Congressional support. It is the most comprehensive overhaul of food safety regulations in over 70 years, mandating systems for preventing produce contamination and requiring more frequent inspections and controls for both domestic and foreign growers, shippers importers and distributors.
The regulations are now in a comment period, according to industry sources; who admit they do not really know how everything will shake out—except that Congress will continue jawboning over funding.
As is the case with anything developed by the government, the current regulation is a typical good news/ bad news scenario.
On the plus side, FSMA is putting stronger controls on imports, requiring more frequent inspections at foreign and domestic facilities and mandating systems for preventing produce contamination.
The bad news (maybe not so bad for some of you out there) is that final regulations may not be fully implemented until 2015 or 2016. While the act itself is 234 pages long, it could generate 1,000 pages of regulations thanks to extensive record-keeping, testing, inspection and traceability requirements. Given its history, you have to wonder if enforcement officials will actually read them.
It is clear that new regulations are going to be a game changer—especially for importers and suppliers that have not been on the up-and-up. FMSA is going to hold the importer of record responsible for product safety.
However you slice it, the new law will raise the bar on food safety. But it is going to get messy, complicated and contentious.
The question being asked by some is how retailers fit into the picture—what should they be doing to be part of the process and could they be liable if something goes wrong?
At the moment there are more questions than answers.
Most of them have to do with manufacturing and distribution practices. But retailers will have to have some skin in the game. At the store level, the direct impact of the regulations means providing shoppers with detailed information on recalled products within 24 hours. And it will be up to the FDA to tell you where to put it—I mean, whether you have to post the document at the checkout or in specific departments.
Regulations also state: “Importers of food products intended for introduction into U.S. interstate commerce are responsible for ensuring that the products are safe, sanitary, wholesome and labeled according to U.S. requirements.” I may just be paranoid, but I cannot find anything that specifically states that retailers who import, or are agents for imported products, are exempt.
This also means making sure that importers, suppliers and distributors have the imprimatur of the FDA or a certified third party inspector. It could not hurt retailers to demand a copy of that documentation for their files in case of illnesses and recalls.
I spoke with Kevin Payne, senior director of marketing for Intelleflex, a data visibility solutions firm in Santa Clara, Calif. He said, “Throughout 2012 we saw awareness and interest in the law but not the impetus to take action. For example, retailers were evaluating it but didn’t pull the trigger until after the election. Since then, we’ve seen an uptick in the number of people addressing the traceability issue.”
The bottom line is that customers do not care about rules, regulations, oversight and exemptions. They only know that they bought an item at a particular store and, to some degree, hold that retailer responsible if anything happens.
One observer I spoke with put it this way: “If you get sick from produce in a hotel, no one wants to hear from the chef that the product was from a local producer that was exempt from the law. That’s no excuse.”
Retailers now have the opportunity to shape the future of food safety regulations, not simply to be at the mercy of them.
Len Lewis, a regular Grocery Headquarters columnist, is a veteran industry journalist, commentator and editorial director of Lewis Communications. He is the author of The Trader Joe’s Adventure—Turning a Unique Approach to Business into a Retail and Cultural Phenomenon. He can be reached at email@example.com or at www.lenlewiscommunications.com.