How hard is it for the seafood industry to live with country-of-origin labeling?
Following the labeling and recordkeeping rules is an everyday reality for seafood companies and their supermarket customers. Unlike the meat and fresh produce industries, seafood didn't get an extension on the compliance deadline. The industry has been grappling with the rule for just over six months now. I asked a couple of big retailers to describe their early experiences with COOL. Not surprisingly, the road has been a little bumpy.
"We worked with our suppliers for several months in anticipation of COOL being implemented in the seafood industry," said Bruce Peterson, senior vice president and general merchandising manager of perishables for Wal-Mart Stores, in an e-mail message. "As we expected, it has been a challenge for the smaller suppliers, but we have worked with them in such a way as to ensure that they could still participate in our program. As a practical matter, we have a relatively small seafood presence as well as some sophisticated systems. So compliance for us may have been easier than in some of our competition."
The mandate prompted one of the country's top seafood retailers to modify hundreds of seafood scales so they could produce bigger product labels bearing more information. The seafood department at this major chain used to have one item number for fresh ahi tuna steaks -- now the department has 15. Aside from that, much of the extra work related to COOL has fallen on the retailer's suppliers.
"It was a bit of a chore for us," said a buyer from this chain, who likes to stay under the radar.
The dreaded inspections, often cited by retailers and others who had qualms about COOL, haven't been an issue, at least not for this particular company.
"In terms of inspections, we haven't had many," the buyer said. "Anytime they've checked us out, we've been fine. That was at the beginning. I haven't gotten any feedback related to country of origin in six months."
COOL divided the food industry, and prompted retailers to launch a huge lobbying effort to keep the program from becoming mandatory. The biggest complaints about COOL focused on its high cost and difficult recordkeeping requirements. For the seafood industry, the U.S. Department of Agriculture estimated direct costs to affected firms would be $89 million for the first year of implementation. While it's high, that estimate is quite a drop from earlier estimates that were in the low billions. The number went down as a result of a reduction in volume of product subject to the regulations.
Consumers care about price and quality, not so much where there food comes from. That's the conventional wisdom and it's panning out at the seafood case.
"We have seen no evidence of U.S. product increasing in sales nor any evidence of non-U.S. product decreasing in sales," Peterson said.
From the point of view of the buyer at the large chain, the labeling program could have at least one unexpected consequence. Retailers may think twice before purchasing from countries hostile to the United States, the buyer from the large chain noted.
"I think country of origin raises awareness levels for buyers," he said. "This has spurred buyers to investigate where their items are coming from."