ORGANIC FIRMS DISPUTE HBC RULES

CHICAGO -- Organic health and beauty care suppliers, along with organic pet food companies, expressed concern about new U.S. Department of Agriculture rules that will not allow their products to use the USDA Organic Seal, at the Organic Trade Association's All Things Organic trade show, which was co-located with the Food Marketing Institute Show here this month.products cannot display the USDA Organic

CHICAGO -- Organic health and beauty care suppliers, along with organic pet food companies, expressed concern about new U.S. Department of Agriculture rules that will not allow their products to use the USDA Organic Seal, at the Organic Trade Association's All Things Organic trade show, which was co-located with the Food Marketing Institute Show here this month.

products cannot display the USDA Organic Seal and may not imply that they are produced to the USDA's national organic standards. Manufacturers must change their labeling by October 2005.

In 2002, the National Organic Program issued completely different guidance, which said producers and manufactures can seek organic certification for mushrooms, pet foods, aquatic animals, fabrics, cosmetics, body care products, over-the-counter medications, dietary supplements, fertilizers, soil amendments and products from greenhouse, apiculture and hydroponic systems.

"We made a mistake, frankly," said Barbara Robinson, USDA's deputy administrator, transportation and marketing programs, about the policy issued two years ago. "We thought we would pull people in under the umbrella, to prevent misuse. We were trying to minimize people acting like organic when they really weren't."

Yet, after the National Organic Program began working with USDA lawyers to ensure that the national organic rules would stand up to legal challenges, the agency found that it does not have jurisdiction over certain products. The Food and Drug Administration governs beauty care and dietary supplement products, for example.

The new rule will cause consumer confusion, according to the Consumers Union, Yonkers, N.Y., publisher of Consumer Reports, and the Organic Trade Association, Greenfield, Mass., because some products will not be allowed to use the USDA seal. In addition, the new directive will allow some products to be labeled "organic" when they are not, because they will not fall under the USDA standards, they said.

"In excluding certain classes of products from eligibility for certification and USDA enforcement, anyone making a personal care product, pet food or supplement, for instance, can make an organic claim -- even a certified organic claim -- without meeting any standard, and USDA will not interfere," the OTA said.

In addition, OTA is concerned about the financial impact to manufacturers that have invested time and research in marketing and labeling their products as organic. "Obviously, it is bad news for us. We spent hundreds of thousands of dollars building this [market]," said Peter Atkins, vice president of Natura Manufacturing, Fremont, Neb., maker of Natura Pet Products. Several new organic pet products have been put on hold because the company's business model was based on using the USDA seal. "We don't have any big incentive any more," Atkins said.

"We comply fully with the National Organic Program, but we can't say it," said David Bronner, president of Dr. Bronner's Magic Soaps, a natural soap company in Escondido, Calif.

Organic suppliers and others also expressed frustration that the National Organic Program issued this directive without first consulting the public, the organic industry or even its own advisory group, the National Organic Standards Board.

"Given their significance and impact on the benefits of the NOP, these documents should have gone through the rule-making process where public input can be taken into consideration," Consumers Union said in a letter to the USDA.

However, the USDA does not have to solicit public comments on this guidance, National Organic Program officials said. And they assured the industry that personal care products, supplements and others could still be certified to other programs, as long as they don't use the USDA seal.

For example, several cosmetic and skin care companies are already selling organic products, certified to the state of California's organic program. So they will still be allowed to carry certification from California or private certifiers, but will have to take the USDA seal off their products.

Meanwhile, the Organic Trade Association will try to overturn the new directive. It is considering legal action and Congressional legislation.