- The Washington Times - Wednesday, October 22, 2003

The food and beverage industry is warning that consumers might face price increases as companies come to terms with new rules designed to protect the nation’s food supply from terrorism.

Food and Drug Administration Deputy Commissioner Lester M. Crawford said Tuesday that more regulation might be needed next year.

“Any time you impose new regulations on an industry, that has the potential to increase prices,” Tim Willard of the National Food Processors’ Association said. “But it’s too early to say whether they will in this case.”

Under the rules, which go into effect on Dec. 9, importers must register each of the 420,000 facilities in the United States and abroad that produce or handle food products destined for the United States.

In addition, importers have to give advance word of the arrival, origin and contents of food shipments at U.S. ports of entry. The agency expects to receive up to 25,000 such notifications every day.

“There’s going to be a definite upfront cost in staff hours and resources dedicated to complying” with the new rules, said Stephanie Childs, spokeswoman for the Grocery Manufacturers of America, which represents major food, beverage and consumer-product companies.

But she said companies already had built assumptions about the additional costs into their budgets for 2004 and said they would not be passed on to the public.

“If there are additional costs, I don’t think consumers will see them,” she said. She did not answer questions about whether the costs would mean shrinking profit margins.

The new regulations, published by the FDA earlier this month, are a major departure for the agency, which was given sweeping new powers under last year’s bioterrorism law.

The rules are still in their interim stage. The final version will be not be published until mid-December, so that “if there are any unforeseen practical problems … the bugs can be worked out of the system,” Miss Childs said.

The regulations already had been modified from their original form after an industry outcry.

The period of advance notice and the amount of information that importers had to give had been reduced.

“These rules have to be commercially feasible,” said Miss Childs, pointing out that just-in-time delivery methods make long advance-notice periods impractical.

She stressed, however, that the food industry was “absolutely committed to ensuring the security of the food supply,” because “consumers have to know that their food is safe. That’s a must.”

But despite industry concern over the regulatory burden, the FDA is looking to further tighten its protection of the food supply. The agency needs to ensure that it can use the data that importers are providing to inspect higher-risk cargo at any port of entry.

FDA inspectors are stationed at one-third of the 300 ports of entry that food importers use, Mr. Crawford said.

“The next step will be to consider whether to direct shipments of food to these 100 ports exclusively, or to try and add more inspectors, depending on what’s realistic,” he said.

He added that “going to every port would take an impressive investment in personnel” and said he did not know whether that would be possible.

The agency has undergone a huge and rapid expansion — 1,900 field agents — since the September 11 terrorist attacks.

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