Will New FDA Penalties BREAK Your Bank?

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Will New FDA Penalties BREAK Your Bank? Powered By Docstoc
					           Pricey monetary penalties are just one of many concerns over the Congressional
                    passage of the latest food safety regulations. By April Terreri

          ET AGAINST THE BACKDROP of recent food-contamination               impact such onerous regulation would have upon our small business
          incidences including the Peanut Corp. of America (PCA)             community, especially during this economic slump,” cautions Anne
          tragedy that claimed nine lives and sickened hundreds more         Holloway, vice president of government affairs for American Wholesale
          people, Congress recently passed HR 2749—the Food Safety           Marketers Association (AWMA) in Fairfax, VA.
Enhancement Act of 2009 (FSEA).                                                 Concerns over the resolution include additional fees, operational
   The PCA debacle, the largest recall of food products ever in the histo-   costs and harsh monetary penalties; increased recordkeeping; and a
ry of the country, stemmed from salmonella poisoning of peanut butter        one-size-fits-all approach to liability that could disproportionately impact
the company manufactured. “Consumer confidence had been shaken                some companies along the supply chain, especially companies whose
and Congress felt it had to act,” explains Michael Sansolo, a Washing-       responsibility is limited to storing and moving the finished goods. Some
ton-based industry consultant and former senior vice president of the        provisions would not even contribute to the overall goal of food safety,
Food Marketing Institute (FMI).                                              note contenders of specifics within the bill’s language.
   But do some provisions reflect a knee-jerk reaction? Many in the              So how exactly will food distributors be impacted? To find out, we
food logistics industry feel that Congress should put the brakes on the      asked AWMA, FMI, the Grocery Manufacturers Association (GMA),
movement of this resolution, which is on a fast track to passage. Once       the International Foodservice Distributors Association (IFDA) and the
the Senate version (S-510) passes, the House and Senate bills will move      International Warehouse Logistics Association (IWLA).
to a conference committee, where the final bill will be written.
   “We are concerned over attempts to rush legislation through Con-          Understanding The Food Supply Chain
gress without the proper vetting and consideration relating to the             Many concerns exist in the industry because of Congress’ appar-

26   SEPTEMBER 2009   •   F             www.foodlogistics.com
ent limited understanding of the food supply chain and the differ-                       the products in between is assuming liability for safe storage and trans-
ing roles and associated liabilities of companies along that long and                    port. Congress does not understand that the supply chain has a large
complex chain.                                                                           number of businesses that occupy the area of logistics not related to the
   “They view the supply chain as if there are only two players—the                      sale or purchase of products.”
shipper and the receiver,” states Joel Anderson, president and CEO of                       Convenience store distributors: AWMA represents convenience
Chicago-based International Warehouse Logistics Association. “They                       store distributors, with members representing over $85 billion annually
don’t understand there are many others involved in the movement of                       in U.S. product sales, who are gravely concerned with some provisions.
food products, including truckers, warehouses, brokers and retailers.”                                                “Many of our members have small, family-
   This limited understanding resulted in the bill’s unfair stance regard-                                        owned businesses and the greatly expanded
ing the extent to which a particular company is liable. Contenders main-                                          regulations and recordkeeping provisions
tain liability should reflect a company’s ownership and knowledge of                                               would be unduly burdensome while providing
product makeup.                                                                                                   little or no real benefit to consumer safety,” Hol-
   AWMA, IFDA and IWLA, disproportionately and negatively affected                                                loway contends.
by the bill, are working assiduously to have the language changed to re-                                              Under the Public Health Security and Bio-
flect their respective limited liab
Description: Echoing others in the industry, FMI is concerned about the provision requiring additional recordkeeping. "We support the Bioterrorism Act's one-up, one-back process," says [John Billings]. "Since retailers are at the end of the food logistics supply chain, we would be concerned if it was our responsibility to be a data collector for the entire chain."
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