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The U.S. Innovation and Competition Act (S.1260) includes language from the Country-of-Origin Labeling (COOL) Online Act that would require retailers to specify country of origin for products posted on their websites. 

FMI questions online country-of-origin requirements in new Senate bill

Change deemed ‘unworkable’ for food producers and retailers

FMI-The Food Industry Association opposes a measure in new U.S. Senate legislation that would require retailers to provide country-of-origin information in product descriptions on their websites.

The U.S. Innovation and Competition Act (S.1260), passed June 8 by the Senate, includes language from the Country-of-Origin Labeling (COOL) Online Act that would create “duplicative and burdensome requirements” for online sales administered and enforced by the Federal Trade Commission, FMI said Wednesday. In turn, the new provision would conflict with the existing COOL program at the U.S. Department of Agriculture (USDA) and “be unworkable” for agricultural producers, food manufacturers and grocery retailers, FMI noted. 

“Now is not the time to place additional, duplicative burdens on essential industries like food retailers with no additional benefit to customers,” Andy Harig, vice president of tax, trade, sustainability and policy development at FMI, said in a statement. “Online purchasing by customers has increased exponentially due to the COVID pandemic and retailers have expanded their online product offerings at significant costs to meet consumer needs.” 

The COOL provision in S.1260, formerly known as the Endless Frontier Act, would mandate that retailers specify country of origin for products posted on their websites. FMI contends that requiring country-of-origin information for the exact product to be delivered to the consumer in advance of delivery would present “significant and costly” new technology challenges. What’s more, such a measure wouldn’t jibe with current requirements identifying country of origin on a product package that have been in place under the USDA  for over a decade, according to FMI.  

“The new FTC requirements, if implemented, would leave retailers with few options: making costly investments in real-time inventory tracking of every covered product in stores and online, in addition to the information on the package or product, reducing product offerings online to prevent fines and penalties under the new COOL requirements, or potentially canceling portions of customer orders if those goods cannot be sourced at the store-level with the country of origin that was advertised online,” Harig explained.

“None of these options add value for U.S. consumers or the food supply chain,” he added. “The existing USDA COOL program works. It provides consumers with country-of-origin information in an efficient and cost-effective way that also has a high compliance rate from food retailers. FMI will advocate to prevent duplication and preserve the existing USDA COOL program as this legislation moves to the U.S. House of Representatives.” 

In a letter sent yesterday to the Senate, FMI joined with 14 other food trade organizations, including the National Grocers Association (NGA), in voicing its opposition to the COOL change in the legislation.

“We respectfully request you vote ‘no’ on the U.S. Innovation and Competition Act, unless the concerns of the agricultural and food supply chain are addressed to allow covered agricultural products to remain under the U.S. Department of Agriculture (USDA) and U.S. Customs and Border Protection (CBP)’s proven regulatory oversight,” the trade groups told senators in the letter.

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