News & Events

New Labeling Rules Aimed at Foreign Companies that Mislead Consumers

Jul 12, 2021 8:38:00 AM / by FreshByte Software

The United States Department of Agriculture (USDA) says it will issue new rules on labeling so that “domestic farmers and ranchers do not have to compete with foreign companies that mislead consumers”.

The top-to-bottom review of the “Product of USA” meat labeling term announced on July 1 is part of USDA’s effort to level the playing field for independent family farmers and ranchers.

The USDA “Product of USA” meat labeling announcement came on the same day that the Federal Trade Commission (FTC) finalized a new rule to deter rampant “Made in USA” fraud.

FTC to Crack Down on False “Made in USA” Claims

Under a new FTC rule, marketers making unqualified “Made in USA” claims on labels should beFB Label blog able to prove that their products are “all or virtually all” made in the United States.

The new rule codifies a broader range of remedies by the FTC, including the ability to seek redress, damages, penalties, and other relief from those who lie about a “Made in USA” label.

It will enable the Commission for the first time to seek civil penalties of up to $43,280 per violation of the rule.

“The final rule provides substantial benefits to the public by protecting businesses from losing sales to dishonest competitors and protecting purchasers seeking to purchase American-made goods,” said Commissioner Rohit Chopra

The rule does not impose any new requirements on businesses. Instead, it codifies the FTC’s longstanding enforcement policy statement regarding U.S.-origin claims. By codifying this guidance into a formal rule, the Commission can increase deterrence of “Made in USA” fraud and seek restitution for victims.

Over the course of the rulemaking, the FTC heard from hundreds of ranchers and shrimpers concerned about Made in the USA labels that mislead consumers.

USDA to Promote Transparency in Product of USA Labeling

Following the FTC vote to strengthen its enforcement of the Made in USDA standard, the USDA said it would work to promote transparency in Product of the USA labeling.

“USDA will complement the FTC’s efforts with our own initiative on labeling for products regulated by FSIS, an area of consumer labeling where USDA has a long tradition of protecting consumers from false and misleading labels,” said Agriculture Secretary Tom Vilsack. “American consumers depend upon accurate, transparent labels to obtain important information about the food they consume. American farmers and ranchers depend upon those same labels to convey information about their products that consumers value and demand.”

The USDA has taken note that the current “Product of USA” label on meat products needs to be changed.

“USDA announced last year our intention to conduct our own rulemaking to address the concern that the voluntary “Product of USA” label may confuse consumers about the origin of FSIS regulated products,” Vilsack said.

USDA is initiating a top-to-bottom review of the “Product of USA” label that will, among other things, help determine what that label means to consumers.

Vilsack said: “Throughout the rulemaking process, we will be asking questions, collecting data, and requesting comments. And we will be considering all ideas suggested by the whole range of stakeholders, including our trading partners with whom we will engage to ensure that this labeling initiative is implemented in a way that fulfills our commitment to working cooperatively with our trade partners and meeting our international trade obligations.”

USDA Announces $500 Million to Increase Competition

To increase competition and build a better food system the USDA announced on July 9:

  • It intends to invest $500 million in American Rescue Plan funds to expand meat and poultry processing capacity so that farmers, ranchers, and consumers have more choices in the marketplace.
  • It intends to invest $150 million for existing small and very small processing facilities to help them weather COVID, compete in the marketplace and get the support they need to reach more customers.
  • USDA is also holding meatpackers accountable by revitalizing the Packers and Stockyards Act, issuing new rules on “Product of USA” labels, and developing plans to expand farmers’ access to new markets.

“The COVID-19 pandemic led to massive disruption for growers, food workers, and consumers alike. It exposed a food system that was rigid, consolidated, and fragile. Meanwhile, those growing, processing and preparing our food are earning less each year in a system that rewards size over all else,” said Vilsack. “To shift the balance of power back to the people, USDA will invest in building more, better, and fairer markets for producers and consumers alike.  The investments USDA will make in expanding meat and poultry capacity, along with restoration of the Packers and Stockyards Act, will begin to level the playing field for farmers and ranchers.”

Building a Better Food System

The USDA also recently announced plans to invest more than $4 billion to strengthen critical supply chains through USDA’s Build Back Better initiative to strengthen and transform the food system, using funding from the American Rescue Plan and the Consolidated Appropriations Act.

The $500 July 9 announcement was the first step in this $4 billion initiative.

Through USDA’s Build Back Better initiative, USDA will help to ensure the food system of the future is fair, competitive, distributed, and resilient; supports health with access to healthy, affordable food; ensures growers and workers receive a greater share of the food dollar; and advances equity as well as climate resilience and mitigation.

“While USDA’s Build Back Better initiative addresses near- and long-term issues, recent events have exposed the immediate need for action. USDA’s actions to promote competition and the intention to invest in additional small- and medium-sized meat processing capacity will spur economic opportunity while strengthening resilience and certainty for producers and consumers alike,” the USDA said.

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