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Issues: Country of Origin Labeling

Country of Origin Labeling Frequently Asked Questions

Since the end of 2007, PMA has fielded numerous questions from industry on country of origin labeling. Below are some frequently asked questions (courtesy of PMA legal counsel Keller & Heckman LLP) that will provide some insight on this issue.

Question: What is the difference between COOL under the Farm Bill and the country of origin labeling that is currently required?

Answer: Under the Tariff Act of 1930 (enforced by Customs), the packaging of imported products must inform the "ultimate purchaser" of any foreign country of origin, except that products in their natural state (including bulk produce) are not required to bear country of origin labeling except on shipping containers. For products imported from NAFTA countries – Mexico and Canada -- the country of origin is determined by tariff classifications, and for products imported from non-NAFTA countries, the test is whether there has been a substantial transformation. If an imported product is covered by the Tariff Act, no additional labeling would be required under COOL.

Question: Currently we ship all of our products (broccoli, cauliflower, romaine, leaf lettuces, romaine hearts, fennel, cactus pears, iceberg lettuce and broccoli rabe) in cartons that specify “Product of USA.” The items that have a wrap, a bag or a skirt tie have designations on it that also state “Produce of USA.” With those items that have no wrap, are not bagged or have a skirt tie, how will these “naked” items (romaine, green/red leaf, butter and fennel) meet the COOL regulations? Will the retailer need to order these items in another form (i.e. with scan tags or in a sleeve) so that the sellable unit on the shelf has the “Product of USA” designation? Or will the supplier need to provide the item in only a form that will provide the consumer with the country of origin label?

Question: Can a producer list multiple countries as potential origins for the product inside? Currently we see that on packaging where it says “may contain” product from Mexico, Honduras or Chile.

Answer: The declaration must be accurate for the particular lot or package, and therefore declarations such as "Product of Mexico or U.S.A." and "May contain..." are not permitted. But if a covered product contains ingredients from multiple countries, all countries of origin would be listed. Under the COOL proposed rule, country of origin labeling for each raw material source would be declared by listing each country alphabetically, including the U.S.  Abbreviations that “unmistakenly indicate” a particular country would be allowed, such as U.S. and U.S.A.

Question: If  I am shipping a carton of bunched product (i.e. green onions) from Mexico to a retailer that places the individual bunch in the produce section, do I have to place a label, tag, PLU, etc. on each bunch that identifies it as being a product from Mexico?

Answer: Under the proposed rule, the country of origin declaration may be provided to consumers by means of a label, stamp, mark, placard, band, twist tie, pin tag, or other clear and visible sign on the covered commodity or on the package, display, holding unit, or bin containing the commodity at the final point of sale to consumers.

Question: I am being asked by retail customers to provide COOL and method of production information. What is this?

Answer: PMA has learned that some suppliers have received letters from buyers regarding obligations under USDA's "final” COOL regulations, including method of production. Under the interim final rule for seafood, which has been in effect since April 2005, method of production means wild or farm-raised seafood, a distinction which is irrelevant for produce. 

Question: Do I need to modify my invoices and bills of lading to show COOL for the various commodities on these documents?

Answer: In the proposed rule, USDA stated that COOL “will require adding additional information to a firm's bills of lading, invoices, or other records associated with movement of covered commodities from purchase to sale” but that “most of these operations already maintain many of the types of necessary records in their existing systems.” Under the pending Farm Bills, however, no new records would have to be maintained.  

Question:  If a product is grown in the U.S. but packaged, cut, prepared outside of U.S. how is it labeled?

Answer: When produce qualifies for a U.S. country of origin designation (grown in the U.S.), the product may be exported for further processing or handling and imported back into the U.S. without losing the U.S. country of origin designation, so long as a verifiable recordkeeping audit trail is maintained.  

Question:  Where does the label have to be located for naked produce?

Question:  Are there requirements for the type size of a country of origin declaration? 

Question: What are the requirements for each line of the supply chain?

Question: If there are many products packaged together from different countries, how should I label, such as fruit salads?

Answer: A fruit salad containing different types of fruit would not be subject to COOL under the proposed rule.  COOL excludes covered commodities that are ingredients in a processed food item.  A processed food item, for purposes of COOL, is currently defined as 1) a retail item derived from a covered commodity that has undergone a physical or chemical change, causing the character to be different from that of the covered commodity, or 2) a retail item froma covered commodity that has been combined with other covered commodities or substantive food components to produce a distinct retail item that is no longer marketed as a covered commodity (such as a fruit salad containing different types of fruit). But imported produce items that are packaged together, such as lettuce and tomatoes, would still have to bear country of origin labeling under the Tariff Act with respect to the foreign sources.