Meat Industry Sues USDA, Saying Country-of-Origin Label Leads to Higher Costs

July 11, 2013 — -- American meat groups have filed suit against the U.S. Department of Agriculture over its country-of-origin labeling rule, saying it does not address food safety and will lead to higher costs for consumers while bankrupting processing companies.

Eight groups representing the American and Canadian meat industries filed the lawsuit in the U.S. District Court for the District of Columbia to block implementation of a mandatory country-of-origin labeling (COOL) rule. The rule, finalized by the USDA in May 2013, requires origin declaration for three meat production steps: born, raised and slaughtered. It also eliminates the ability to commingle products, which requires segregation of livestock and products in the supply chain.

On Thursday, the American Meat Institute, one of the plaintiffs, responded to claims that labels would help people make safe choices by knowing the origin of their food.

"At AMI food safety is our number one priority, but COOL doesn't offer any food safety information to consumers," the group said on its website. "USDA has made it very clear that COOL is not a food safety program, writing in 2009, 'The COOL program is not a food safety program" and "COOL is a retail labeling program and as such does not provide a basis for addressing food safety'."

The USDA has said the labeling requirement is a "consumer information program."

Meat and poultry companies produce 90 billion pounds of products a year and 99.99 percent of these are consumed safely, the American Meat Institute says. The AMI says it is the nation's oldest and largest trade association representing packers and processors of beef, pork, lamb, veal, turkey, and processed meat products. Its member companies account for more than 90 percent of U.S. output of these products, the group says.

The USDA estimated that the "first-year incremental costs for growers, producers, processors, wholesalers and retailers are $2.6 billion" and the "estimated cost to the United States economy in higher food prices and reduced food production in the tenth year after implementation of the rule is $211.9 million."

In comments to the USDA, the American Meat Institute detailed the tens of thousands of dollars it could cost one plant per week to implement these changes.

The meat groups held a press conference on Tuesday saying that the rule puts companies at the risk of going out of business because many plants built along the borders rely on steady flow of livestock across international borders. However, the rule incentivizes the purchase of livestock raised in one country only due to costs of tracking and segregating animals that have spent any part of their lives outside the country.

The groups have pointed to the USDA's own words in 2009, when it reported there is "little evidence that consumers are likely to increase their purchase of food items bearing the United States origin label as a result of this rulemaking" and that the "[C]urrent evidence does not suggest that United States producers will receive sufficiently higher prices for United States-labeled products to cover the labeling, recordkeeping, and other related costs."

A spokeswoman for the USDA provided a statement to ABC News, saying, "USDA remains confident that these changes will improve the overall operation of the program and also bring the mandatory COOL requirements into compliance with U.S. international trade obligations."

There is "strong" consumer support for country-of-origin labels, said Ami Gadhia, senior policy counsel for Consumers Union.

"When you buy meat to feed your family, you ought to be able to know where it comes from," Gadhia told the Associated Press. "If there's a food safety problem with a certain product, the labels can help consumers avoid that product."

The USDA's Food Safety and Inspection Service said in a fact sheet about the rule, "Food products, both imported and domestic, must meet the food safety standards of USDA's Food Safety and Inspection Service and the U.S. Food and Drug Administration. Food safety and traceability are not the stated intent of the rule, and the COOL program does not replace any other established regulatory programs that related to food safety or traceability."

In the complaint, the groups defend their food safety precautions by stating that all livestock and meat processed at federally inspected establishments in the U.S. and sold in interstate commerce are subject to the same health and safety requirements, as prescribed by the Federal Meat Inspection Act and the Poultry Products Inspection Act.

"Those products are also graded for quality according to a system administered by the AMS [Agricultural Marketing Service] without variation based on where an animal was born or raise," the complaint states. "In short, beef is beef, whether the steer or heifer was born in Montana, Manitoba, or Mazatlán. The same goes for hogs, chickens, and other livestock."

As a result of the rule, steer born in Juarez, Mexico, and raised and slaughtered in Amarillo, Texas ,cannot share the same tray as steer born in Amarillo, Texas, and raised and slaughtered in Amarillo, the groups say.

The meat groups say the rule violates the U.S. Constitution by compelling speech through "costly and detailed labels on meat products that do not directly advance a government interest."

They also say the regulation exceeds the scope of the statutory mandate, because the statute does not permit the kind of detailed and onerous labeling requirements the final rule puts in place.

"Sorting and tracking livestock and labeling meat by the various 'routes' that livestock may take on the way to market is needlessly complex with no measurable benefits," said AMI senior vice president of regulatory affairs and general counsel Mark Dopp in a statement. "Shoes, for example, may say 'Made in the USA.' They do not say 'Leather from cattle born in Canada, harvested in the USA, tanned in South Korea and processed in the USA, yet that is the sort of labeling that we are now being forced to apply."