Utah Food Industry Association

Country of Origin Labeling Takes Effect Today

It has been six years in the making but the effective date is finally here. The 2002 federal law requires retailers to use country of origin labeling to inform their customers of the country of origin of a broad range of covered commodities including fish, seafood, beef, pork, lamb, chicken, and goat (includes fresh and frozen whole muscle cuts and ground product). The law also requires labeling for fresh and frozen perishable agricultural commodities including fruits, vegetables, peanuts, macadamia nuts, pecans and ginseng.

Although the U.S. Department of Agriculture (USDA) has not released final rules they have issued interim final rules. Here are a few important points we do know.

· Food service establishments including store restaurants and deli’s are exempt. Also, processed foods are excluded.

· The law only applies to retail establishments covered under the Perishable Agricultural Commodities Act (PACA). This act covers businesses selling fresh and frozen fruits and vegetables with an invoice cost of at least $230,000 per location, per calendar year.

· The country of origin information can be provided to consumers in a variety of ways including labels, stamps, stickers, signs, placards, and band twist ties.

· There are no specific requirements as to the exact placement or size of the country of origin declaration other than to be conspicuous and legible to the consumer.

· Abbreviations are allowed for the United Kingdom of Great Britain (U.K.) and the United States of America (U.S.A. or U.S.) But these are the only two acceptable abbreviations at this time.

· Covered commodities from different countries can be displayed in the same bulk bin or display case with a sign that lists the countries from which those particular products were sourced.

· Anyone engaged in the business of supplying a covered commodity to a retailer must provide information to the retailer indicating the country of origin of the covered product. The information may be provided in a variety of methods such as on the product, the master shipping container or in a document that accompanies the product. In the last case the document must identify the product, its country of origin, and a unique identifier, such as a lot code number or pack date.

· Records must be maintained for one year from the date the country of origin declaration was made at retail. The records may be kept at any location, however, they must be produced and submitted to the USDA within five business days upon request.

· The records need to include the supplier and country of origin information.

· USDA indicates that it will work with retailers that are making a good faith attempt to comply with the country of origin labeling and record keeping requirements. Non-compliance, but good faith effort will result in a notice of 30 days to comply. If it is found that a retailer continuously and willfully violates the law, USDA can impose a $1,000 fine per violation.

. The USDA has provided guidance on how best to prepare for the law’s implementation with a Question and Answer document that reflects the questions most commonly received on the issue. This document continues to change even though the law is now in effect. The USDA has indicated they plan to engage is a six-month outreach program to educate the food industry about the new law. But, companies need to remember the law is in effect, and businesses need to do their best to comply with the law now. The latest Q&A document is available by clicking here.

All Flavored Malt Beverages Should Be Removed By October 1, 2008

October 1, 2008, marks the deadline for all flavored malt beverages (FMB) to be removed from retail outlets in the state of Utah. In May, the Association published a Weekly Watch article in which all of the requirements of the FMB legislation and rules were detailed.

As a refresher, the following matrix summarizes the changes made by the law and rules and the effective dates of these changes.

Requirement	Effective Date
Display beer in an area that is “visibly separate and distinct” from non-alcoholic beverages.	May 5, 2008
Post an easily readable sign, at each display location; in font no smaller than .5 inches, bold type, “These beverages contain alcohol. Please read the label carefully.”	May 5, 2008
Manufactures of FMB’s must file a list of those FMB’s that they want to continue to distribute in liquor stores after October 1, 2008.	August 1, 2008
Remove all FMB’s from grocery and convenience store shelves.	October 1, 2008

The Department of Alcoholic Beverage Control (DABC) has provided some further guidance regarding the meaning of “visibly separate and distinct” by adopting administrative rules. First, DABC has stated that there should be no co-mingling or interspersing of alcoholic beverages and non-alcoholic beverages. The only exception to this rule is that non-alcoholic beers may be displayed with beer products. Second, a beer display will be considered to be visibly separate and distinct if an entire cooler, shelf, aisle, end-cap, side-stack, stand-alone display or room is devoted to beer products. Finally, if any of the foregoing displays are shared with non-alcoholic beverages then there must be a “visible divider of significant prominence to create a clear divide between the beer products and the non-alcoholic beverages.” In this last case the clear divide could be accomplished by using shelf pop-out tags, shelf channel stripping or in newer coolers, with backlit cooler molding that said “beer” or “alcoholic beverages”.

The new law and rule also restates, with added detail, what has been current law that each display must be accompanied by an easily readable sign in font no smaller than .5 inches, bold type, stating: “These beverages contain alcohol. Please read the label carefully.” While this general requirement has been a part of Utah law for many years the verbiage of the sign has changed slightly. Therefore each retailer will need to replace any existing signs and should be vigilant to ensure that this sign is displayed in each area where beer products are merchandised. The DABC also provided guidance that if a display is large then more than one sign may be required.

The Association realizes that there may be questions that arise as we work together as an industry to implement these changes. Please feel free, as these questions arise, to contact Dave Davis or Jim Olsen at the Utah Food Industry Association for any clarification or assistance.

Online System Available For Reporting and Payment with Eliminating Alcohol Sales to Youth

In 2006, the Utah Legislature passed Senate Bill 58, "Alcohol Beverage Amendments - Eliminating Alcohol Sales to Youth". The law requires retailers who sell alcoholic beverages to train employees within 30 days of hire using a state approved training course. Most retailers use a program provided by the Association called "Techniques of Alcohol and Tobacco Management" or TATM. Once an employee has completed the training, the training provider is required to report employee information and pay a fee to the Utah Division of Substance Abuse and Mental Health. The Division is required to maintain a database of individuals who have been trained.

The Division has notified the Association that it has developed an online payment system for use by EASY providers and trainers. The online payment system allows real time input of trained employees and online payment for these trained employees. Companies may pay with Visa, MasterCard or by E-Check; the E-Check feature was recently added to give companies another payment option. Due to the need for real time information and accurate data entry, effective October 1, 2008, use of the online system will be mandatory and the Division will no longer accept paper checks or money orders as payment for On and/or Off Premise training. Any checks or money orders postmarked later than October 1, 2008 will be returned to the sender. A User Manual for the online payment system is available by clicking here. If you have questions please contact Holly Watson at the Division at hwatson@utah.gov or by phone (801) 538-4233.

Utah Food Industry Association Elects New Officers and Directors

At the Utah Food Industry Association's Annual Meeting held on September 15, 2008, the following individuals were elected by the membership as officers and board members for 2008-2009:
Chairman of the Board, Cory S. Rasmussen, Rodon Foods;
Chairman-Elect, Marsha Gilford, Smith's Food & Drug Stores;
Secretary/Treasurer, Steve A. Tanner, Kamas Foodtown;
Vice Chairman, Steven L. Day, Day's Market; and
Vice Chairman, Darwin Sorensen, Holiday Oil.

Board of Directors:
Douglas Allen, Blue Mountain Foods;
Bill Bailey, Mount Olympus Waters;
Mike Brennan, General Distributing;
Tad Mancini, Mancini Sales & Marketing;
Russ Neilson, 7-Eleven Sales Corporation;
Craig Stahle, Supermercado de las Americas;
Paul Van Slooten, Pepsi Bottling Group;
Bill Winegar, Winegar's Supermarkets;
Frank Yaksitch, Albertsons; and
newly elected Board member Larry M. Rogers, Sinclair Marketing.

Mike Call, President of Maverik, served as the Association's Chairman of the Board for 2007-2008, and has now retired from the Board. He has been inducted into the "Quality, Service and Integrity (QSI) Club," a prestigious group of past Association chief elected officers.

Industry Inducts Doreen Harmon and Jack Pelo into Hall of Fame

At the Utah Food Industry Association's Annual Education Conference and Celebration held on September 15, 2008, Doreen Harmon, Harmon's Chairwoman of the Board; and Jack Pelo, President of Swire Coca-Cola, USA were inducted into Utah's Food Industry Hall of Fame.

Doreen Harmon has worked in her family’s grocery business in almost every aspect of the store from bakery to bookkeeping, courtesy booth to meat counter over the past 50 years. But there is only one label she will whole-heartedly claim for the 3,000 employee Harmons grocery store company. “I’m the mom,” she says. “I really love the people and I think they know it.”

In November, Doreen will be turning 70, a month she notes will be marked with the St. George groundbreaking of Harmon’s 14^th store. “That’s going to be a great birthday present,” she said with a smile.

While Harmons has experienced many business accomplishments Doreen is more proud of the hundreds of thousands of dollars Harmons has donated to the Utah Special Olympics and the Multiple Sclerosis Society of Utah, than she could ever be about company profits. She boasts of a fourth generation of family members in the business, instead of sales and statistics.

Jack Pelo was born and raised in Walla Walla, Washington, where his father owned and operated a local soft drink franchise. So Jack has been in the beverage industry his entire life. Growing up in the business gave him the opportunity to work in almost every aspect of the soft drink bottling company from production line to truck driver.

After graduating from Washington State University he went to work for a few years as a Certified Public Accountant for Price Waterhouse. He stated that his father wanted him to have some work experience outside the family business. But he returned to the soft drink industry as the Coca-Cola Northwest Division Manager for thirteen years. In 1996 Jack came to Utah in his current position as President and CEO of Swire Coca-Cola. Since moving to Utah he has been involved on the Board of Directors of numerous charitable, educational and trade organizations from the Utah Soft Drink Association to the YMCA. But to show how well he is respected in the beverage industry he is the current Chairman of the Board of the American Beverage Association in Washington, D.C.

Utah Food Industry Signs Health System Reform Business Bill of Rights and Responsibilities

On September 23, 2008 a press conference was held on the steps of the state capitol as business leaders signed a Health Reform Business Bill of Rights and Responsibilities. The leaders, including Jim Olsen, President of Utah Food Industry Association, represented companies that employ approximately 400,000 Utah workers. The Bill of Rights and Responsibilities outlines the bold reform demanded by the business community and calls for the elimination of health system waste and inefficiency. Business demands a healthcare system centered on personal responsibility where educated and involved consumers can make informed decisions about their own health care. Consumers have limited choice and control under the current system. Basic cost and quality information is simply unavailable and this lack of information eliminates typical market incentives that naturally encourage healthy competition and control costs.

The Bill of Rights and Responsibilities calls for immediate and bold action in four key areas. Those areas are: Increased accountability, elimination of waste, transform incentives and extend compassion.

In the upcoming legislative session, the Business Coalition will work with representatives of the Governor’s office and legislature to create a legislative package consistent with our vision. Fundamental health system reform is critical to the long-term strength of business in Utah. As Utah’s business leaders we are committed to working with both the broader business community as well as elected officials to bring about real change. A copy of the Bill of Rights and Responsibilities is available by clicking here.

Weekly Watch – September 30, 2008