The costly labeling program stands to raise beef prices even higher

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American Meat Institute Applauds
Introduction of H.R. 2068
Bill would allow consumers to drive need for country-of-origin
labeling.

WASHINGTON, D.C. (May 4, 2005) — The American Meat Institute (AMI)
today applauded the introduction of H.R. 2068, which will allow consumers
to determine the availability of country-of-origin labeling for meat products.

The Meat Promotion Act would provide a framework for converting
mandatory country-of-origin labeling, which must be implemented by
September 30, 2006, to a voluntary program administered by the U.S.
Department of Agriculture (USDA).

According to AMI, upon reviewing the rules that implemented mandatory
country-of-origin labeling, the federal Office of Management and Budget
called it one of the most costly regulatory initiatives it had seen during the
first Bush Administration. USDA estimates that first year costs for mandatory
country-of-origin labeling will be $3.9 billion dollars for all affected
industries, with $2.4 billion borne by the U.S. meat industry alone.

Consumer research has not demonstrated strong demand for country-of
origin-labeling, according to AMI, a fact that raises major questions about
the wisdom of imposing huge costs and driving up meat prices for
consumers. When the International Food Information Council asked 1,000
consumers if there is anything not on a food label that they’d like to see,
three quarters said no and less than one percent mentioned country-of-
origin labeling.

According to AMI, the beef industry, in particular, has been badly hurt by the
loss of export markets for beef products following a single case of BSE in
2003. “Imposing added burdens on a financially strained industry with a lack
of any demonstrable consumer demand is misguided public policy and we
are pleased the members of the House are recognizing this fact,” said AMI
President J. Patrick Boyle.

Consumers are paying record high prices for beef due to tight supplies and a
closed U.S.-Canadian border. The costly labeling program stands to raise
beef prices even higher, as well as the prices for pork, lamb and veal, and
could erode consumer demand for meat products, according to AMI. By
contrast, poultry products, which are exempt from the law, could be the big
winner because they will experience an economic advantage relative to their
red meat counterparts.

“We need to keep the meat industry nimble and competitive, especially in
these tough economic times,” Boyle said. “Putting consumers in the demand
driver seat by making country-of-origin labeling voluntary is smart public
policy.”

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