Availability of Lists of Retail Consignees During Meat or Poultry Product Recalls, 40939-40948 [E8-16221]

Agencies

• DEPARTMENT OF AGRICULTURE
• Food Safety and Inspection Service

[Federal Register Volume 73, Number 138 (Thursday, July 17, 2008)]
[Rules and Regulations]
[Pages 40939-40948]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-16221]



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Federal Register / Vol. 73, No. 138 / Thursday, July 17, 2008 / Rules 
and Regulations

[[Page 40939]]



DEPARTMENT OF AGRICULTURE

Food Safety and Inspection Service

9 CFR Part 390

[FDMS Docket Number FSIS-2005-0028]
RIN 0583-AD10


Availability of Lists of Retail Consignees During Meat or Poultry 
Product Recalls

AGENCY: Food Safety and Inspection Service, USDA.

ACTION: Final rule.

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SUMMARY: The Food Safety and Inspection Service (FSIS) is amending the 
Federal meat and poultry products inspection regulations to provide 
that the Agency will make available to the public the names and 
locations of the retail consignees of meat and poultry products that 
have been recalled by a federally-inspected meat or poultry 
establishment if the recalled product has been distributed to the 
retail level. This rule will apply only where there is a reasonable 
probability that the use of the recalled product will cause serious 
adverse health consequences or death (Class I recalls).
    FSIS will routinely post this information on its Web site as it 
compiles the information during its recall verification activities. 
FSIS is taking this action to provide an additional mechanism for 
prompting consumers to examine products stored in their refrigerator, 
freezer, or cupboard when there is a reasonable probability that the 
product will cause adverse health consequences. The retail consignee 
information will complement the product identification information that 
FSIS already makes available and will provide additional opportunities 
for local media outlets and State and local health officials to 
transmit more targeted information about the recall to consumers.

EFFECTIVE DATE: August 18, 2008.

FOR FURTHER INFORMATION CONTACT: Philip Derfler, Assistant 
Administrator, Office of Policy and Program Development, Room 350-E, 
Jamie L. Whitten Building, 1400 Independence Avenue, SW., Washington, 
DC 20250; Telephone (202) 720-2709, Fax (202) 720-2025.

SUPPLEMENTARY INFORMATION:

I. Background

    FSIS is responsible for ensuring that meat and poultry products are 
safe, wholesome, and accurately labeled. FSIS enforces the Federal Meat 
Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA). 
These two statutes require Federal inspection and provide for Federal 
regulation of meat and poultry products prepared for distribution in 
commerce for use as human food. When there is reason to believe that 
meat or poultry products in commerce are adulterated or misbranded, 
FSIS requests that the establishment that introduced the products into 
commerce recall them. If the establishment does not agree to recall the 
products, FSIS has the authority to detain and seize the products.
    When an establishment recalls products, it is responsible for 
promptly notifying each of its affected consignees about the recall. In 
general, the recalling establishment conveys the following information 
to its affected consignees:
     That the product in question is subject to a recall;
     That further distribution or use of any remaining product 
should cease immediately;
     Where applicable and required as part of the recall 
strategy, that the direct consignee should in turn notify its 
consignees that received the product about the recall;
     Instructions regarding what to do with the product; and
     Contact information for questions (e.g., a name and toll-
free number).
    Affected consignees carry out instructions provided to them by the 
recalling establishment and, when necessary, extend the recall to their 
consignees.
    FSIS also widely disseminates recall information. For Class I or II 
recalls, defined in FSIS Directive 8080.1, Revision 4, Recall of Meat 
and Poultry Products, dated 5/24/04\1\, as those situations where there 
is a reasonable (Class I) or remote (Class II) probability that the use 
of the product will cause serious adverse health consequences, FSIS 
typically issues a press release and distributes recall information to 
wire services and media outlets in the areas where the product was 
distributed. FSIS also alerts Congressional delegations and public 
health partners, such as the Association of Food and Drug Officials, 
and State departments of health and agriculture, concerning these 
recalls and posts the recall information on the FSIS Web site. For 
Class III recalls, defined as those situations where the use of the 
product will not cause adverse health consequences, FSIS usually does 
not issue a press release (except in cases of egregious economic 
adulteration). It distributes a Recall Notification Report (RNR) to the 
appropriate Federal, State, and local public health and food inspection 
agencies and posts it on FSIS' Web site.
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    \1\ https://www.fsis.usda.gov/OPPDE/rdad/FSISDirectives/
8080.1Rev4.pdf
_____________________________________-

 Through press releases and RNRs, FSIS provides the public with 
pertinent information about the recalled products. To help consumers 
identify the product, FSIS provides a description of the food being 
recalled; any identifying codes, including lot numbers, when available; 
the reason for the recall; the name and official number of the 
producing establishment; the types of establishments and facilities to 
which the recall extends; the availability of product at the retail 
level; FSIS' classification of the recall; pictures of the product or 
label, when available; and the appropriate contact persons for FSIS and 
the recalling company. FSIS lists those States to which recalled 
product was shipped if fewer than 13 States were involved in the 
recall. If the recall extends to 13 or more States, it is considered a 
nationwide recall. To date, FSIS has not publicized the names or 
locations of the retail consignees that received recalled meat or 
poultry products, although FSIS has on occasion, identified a store or 
chain if it was the sole retail outlet for the recalled product.
    During the recall process, FSIS obtains from the recalling 
establishment the names of the known consignees of the recalled product 
(based on its

[[Page 40940]]

records). These consignees may include distributors, warehouses, and 
retailers.\2\ FSIS uses this information to contact all of recalling 
establishment's affected consignees in order to verify that the 
establishment has notified all of them of the recall, and that the 
consignees have removed the recalled products from the market and 
disposed of them as directed by the recalling establishment.
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    \2\ This final rule applies to FSIS-regulated meat and poultry 
products only.
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    FSIS also compiles lists of all subsequent consignees to which the 
recalling establishment's direct consignees distributed the recalled 
product by contacting those consignees to ensure that they were also 
notified of the recall. The Agency traces the recalled product forward 
to the retail level. When there is concern that the original 
distribution information is not accurate or complete, e.g., a generic 
list of chain stores is missing a few known stores, FSIS will prepare a 
list identifying the consignees or distributors that may have received 
the recalled product but were not included in the distribution 
information provided by the firm.
    Through this process, as well as that of verifying the 
effectiveness of the recalling establishment in conducting the recall, 
FSIS develops a list of consignees, down to and including the retail 
level, that have, or have had, the recalled products in their 
possession. FSIS begins its process of verifying the effectiveness of 
the recalling establishment in conducting the recall, which is 
described in FSIS Directive 8080.1, as soon as possible within three 
working days of the initiation of a Class I recall and substantially 
completes it within 10 working days of the initiation of the recall.
    On March 7, 2006, FSIS published a proposed rule in the Federal 
Register (71 FR 11326) in which the Agency proposed to post on its Web 
site the names and locations of the retail consignees of recalled meat 
and poultry products. FSIS proposed to post this information as the 
Agency obtained it during its recall verification activities described 
above. The proposal was developed by FSIS after its evaluation of 
requests from consumer groups and some State officials, who advocated 
the public release of information on where recalled meat and poultry 
products have been shipped or distributed. The State officials 
requested that this information be provided to them without the 
limitations imposed by FSIS' regulations,\3\ believing that they would 
be better able to protect the public health with this information. 
Similarly, some consumer groups asserted that the public could use this 
information to identify more easily and effectively the product being 
recalled. These State officials and consumer groups believe that making 
the retail distribution information available will materially improve 
the effectiveness of recalls.
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    \3\ 9 CFR 390.9(a)(1) requires a written statement establishing 
the State's authority to protect confidential distribution lists 
from public disclosure and a written commitment not to disclose any 
information provided by FSIS without the written permission of the 
submitter of the information or the written confirmation by FSIS 
that the information no longer has confidential status.
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    FSIS solicited comments on the proposal for thirty days. In 
addition, on April 24, 2006, FSIS held a public meeting to solicit 
comments on the proposal. A transcript of that meeting can be found at 
https://www.fsis.usda.gov/OPPDE/rdad/FRPubs/2006-0009_Transcript.pdf. 
Following requests made during the public meeting and written requests 
submitted during the comment period, FSIS reopened the comment period 
on May 10, 2007, and solicited comments for an additional 30 days. (71 
FR 27211).
    In response to the proposed rule and public meeting, FSIS received 
almost 6,000 comments from consumers, consumer advocacy organizations, 
industry representatives, Federal and State agencies, and professional 
organizations. This number includes several comments made by 
individuals at the public meeting and taken from the transcript of that 
event. There was strong support for the rule from consumers, consumer 
advocacy organizations, Federal and State agencies, and professional 
organizations. Collectively, these individuals and groups filed 26 
comments supporting the rule. The remainder of the comments supporting 
the rule were form letters. FSIS received nine comments from industry 
representatives opposed to the proposed rule. These comments expressed 
generally similar objections to the rule.
    After carefully evaluating the comments, FSIS has decided to adopt 
the proposed rule with modifications. Specifically, the Agency has 
decided to limit the application of this final rule to Class I recalls, 
that is, recalls where the Agency has determined that there is a 
reasonable probability that the use of the product will cause serious 
adverse health consequences or death. FSIS proposed applying the rule 
to all classes of recalls. However, after evaluating the comments, 
including those that suggested that it is not necessary to make 
publicly available retail consignee lists in situations where food 
safety concerns are minimal, FSIS has concluded that it is prudent to 
modify the rule to apply only to those recalls involving products where 
there is a reasonable probability that the use of the recalled product 
will cause serious adverse health consequences or death.
    In addition, this final rule makes clear that FSIS will make 
available the names and locations of all retail consignees of recalled 
meat or poultry products that the Agency compiles in connection with a 
Class I recall. The list will not be limited to those consignees that 
are actually the subject of FSIS recall effectiveness checks, which was 
how some commenters interpreted the proposed rule. Finally, FSIS 
simplified and removed unnecessary text from the codified language.

II. Response to Comments

    Some commenters asserted that knowing the names of retail 
consignees would help members of the public make better informed 
decisions in responding to recalls. Other commenters stated that 
providing retailer names and locations would enhance the usefulness to 
consumers of the information that FSIS already provides, such as the 
States in which product was distributed, because consumers would be 
more likely to check the meat and poultry products in their possession 
if they regularly shop at a store that sold the product involved in a 
recall. Therefore, these commenters believed that the overall 
effectiveness of recalls would be increased. Some commenters stated 
that the information currently provided by FSIS may not be sufficient 
because consumers may not know where to look for product codes or 
establishment numbers; others stated that this rule change is a common 
sense solution that will help consumers to identify recalled products 
if they have them in their possession and thus better protect 
themselves from adulterated or misbranded products.
    The Agency believes that its current recall system has been 
effective, but when there is a reasonable probability that the product 
will cause adverse consequences, it would be useful to provide an 
additional mechanism for prompting consumers to examine products stored 
in their refrigerator, freezer, or cupboard. The retail consignee 
information will complement the product identification information that 
FSIS already makes available and will provide additional opportunities 
for local media outlets and State and local health officials to 
transmit more targeted information about the recall to consumers.

[[Page 40941]]

    If the name of a store where a consumer shops appears on the posted 
list of consignees, it will very likely prompt the consumer to use 
product-specific information to determine whether recalled product is 
one he or she may have purchased and stored. If the consumer in fact 
has the recalled product, he or she can take appropriate action to 
either dispose of the product or return it to the retailer and not 
consume it.
    As noted by the commenters who supported this rule change, the 
retail consignee information should be particularly helpful in recalls 
involving products where the product identification information is 
limited, such as non-branded product and meat and poultry products that 
are packaged at the retail level. Products packaged at the retail store 
usually do not bear the establishment number of the official 
establishment that is recalling the product.
    Some commenters favoring the rule suggested that FSIS list the 
retail consignees in the press release because some people may not own 
a computer or know how to find the information on the FSIS Web site.
    In most cases, FSIS will not have information on retail consignees 
available at the time the press release is issued, which generally 
occurs before the recall verification activities begin. Of course, FSIS 
will continue to provide in its press release the same important 
information about the recalled products currently made available, 
including a description of the food being recalled; any identifying 
codes, including lot numbers, when available; the name and official 
number of the producing establishment; the types of establishments and 
facilities to which the recall extends; the availability of product at 
the retail level; FSIS' classification of the recall; pictures of the 
product or label, when available; and the appropriate contact persons 
for FSIS and the recalling company in the press release.
    FSIS intends to release the information regarding retail consignees 
of products subject to a Class I recall as soon as possible during the 
course of the recall. Generally, for Class I recalls, this information 
should be available within three to 10 working days.
    One commenter generally concurred with the proposal but suggested 
that FSIS clarify the rule to explain that the posted information is 
incomplete because only those retail locations selected by the Agency 
in conducting recall effectiveness checks would be identified.
    The commenter misunderstood the Agency's proposal. FSIS intends to 
post the names and locations of all known retail consignees identified 
as having received meat or poultry products subject to a Class I 
recall, irrespective of whether the Agency conducted a recall 
effectiveness check at that location. FSIS has modified 9 CFR 390.10 to 
make this clear.
    Several commenters supported the proposed rule but stated that it 
did not go far enough. In addition to identifying the retail 
consignees, they believe that FSIS should also make available the names 
of intermediate consignees, including hotels, restaurants, food service 
institutions, and intermediate distributors. Intermediate consignees 
may receive product directly from the manufacturer or from a 
distributor at the wholesale level. Intermediate consignees prepare 
their products for immediate, on-site consumption, not for delayed 
consumer preparation at home.
    Several commenters supporting the rule believe that limiting 
distribution information to retail consignees will create an 
unnecessary hurdle for State or local public health agencies to 
overcome to obtain timely distribution information. One commenter 
stated that providing this information for food service establishments 
would ``provide consumers greater protection from the risks associated 
with tainted meat or poultry,'' while another suggested that 
restaurants be included so that individuals are fully aware of the 
scope of recalls.
    FSIS is making no changes based on these comments, which are 
outside the scope of this rulemaking. The Agency is taking this action 
to provide an additional mechanism for prompting consumers to examine 
products stored in their refrigerators, freezers, or cupboards when 
there is a reasonable probability that the product will cause adverse 
health consequences so that they can take appropriate action to either 
dispose of the product or return it to the retail store at which it was 
purchased. Making available the names of intermediate consignees will 
not advance the purposes of this rulemaking because there is no reason 
to believe that this information will help consumers to determine that 
they have the recalled products in their possession.
    Further, FSIS does not agree that publicly identifying food service 
establishments would provide consumers greater protection from the 
risks associated with tainted meat or poultry. To ensure that Class I 
recalled products held by intermediate consignees do not reach 
consumers, intermediate consignees that have recalled products in their 
possession are obligated to segregate them from all other non-recalled 
products and dispose of them as directed by the recalling 
establishment. This is also true of recalled products held by retail 
consignees. In addition, FSIS already has in place a process to share 
distribution information, including the names and addresses of 
intermediate consignees, with State and local public health agencies to 
ensure that intermediate consignees have disposed of the recalled 
product.\4\
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    \4\ See 9 CFR 390.9.
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    Several commenters opposed to the rule stated that adoption of the 
proposal would hamper the currently effective recall procedures and 
adversely affect public health. These commenters stated that providing 
consumers with the names of retail consignees will hamper recall 
efficiency because this information may be inaccurate, leading to 
increased returns of product that has not been recalled. One commenter 
stated that the lists of retail consignees will be untimely and may 
lead to consumer apathy and failure to heed recall notices. A few 
commenters stated that consumers have all the information they need to 
identify recalled product, and that they do not require retail store 
information to identify implicated product.
    FSIS disagrees that publishing the names of retail consignees will 
diminish the effectiveness of the Agency's recall procedures, hamper 
identification of recalled product, or result in the release of 
untimely or inaccurate information. As they currently do, the FSIS 
verification procedures will ensure that any inaccuracies in the retail 
consignee list are identified and corrected quickly. FSIS has 
determined that starting to post the names and locations of retail 
consignees within three working days of the initiation of a Class I 
recall will make its lists timely. FSIS does not believe consumers will 
ignore the product specific information that the Agency currently 
provides to assist them in accurately identifying the recalled product. 
Rather, retail consignee information will complement the product 
identification information that FSIS already makes available and will 
provide additional opportunities for local media outlets and State and 
local health officials to transmit more targeted information about the 
recall to consumers.
    Further, FSIS notes that in some recalls, product specific 
information is limited. Some products do not bear product codes or 
establishment

[[Page 40942]]

numbers. They are packaged at the retail level and thus have limited 
identification. In 2007, almost 9 percent of the recalled meat and 
poultry products sold at retail stores were non-branded. Providing the 
names and locations of retail consignees, in conjunction with the other 
information provided, in these cases, will be particularly important 
for prompt identification.
    In addition, for a variety of reasons, consumers may remove product 
from the original packaging and store it in containers that lack the 
identification information. In these situations, publishing only the 
establishment number, product codes, and States where the product was 
distributed is of little use to the consumer. However, identifying the 
retail store at which the product was available for sale by name and 
location provides consumers with additional information that will 
trigger efforts on their part to determine whether they purchased the 
recalled product.
    FSIS is providing this information on the retail consignees of a 
Class I recalled product so that consumers can use it in conjunction 
with the information the Agency already provides to identify the 
recalled products and to act appropriately with respect to those that 
have actually been recalled. Returning recalled products to the store 
at which they were purchased is just one option consumers have. 
Consumers may also dispose of such products at home. The objective of 
the rule is to provide an additional mechanism for prompting consumers 
to examine products stored in their refrigerator, freezer, or cupboard 
when there is a reasonable probability that the product will cause 
adverse health consequences. The retail consignee information will 
complement the product identification information that FSIS already 
makes available and will provide additional opportunities for local 
media outlets and State and local health officials to transmit more 
targeted information about the recall to consumers.
    In response to commenters and to ensure that consumers do not 
misunderstand the retail consignee list, FSIS will provide the 
following explanatory statement that will accompany the list that will 
make it clear that the list is still under development:

    FSIS has reason to believe that the following retail locations 
received [describe meat or poultry products that are subject of 
recall] that has been recalled by [name of company]. This list may 
be incomplete. Please use the product-specific identification 
information, which is available at [insert link to specific recall] 
to check meat or poultry products in your possession to see if they 
have been recalled.

    FSIS continues its investigation in conjunction with this recall 
and will update this list, as appropriate.

    Significantly, the statement gives the Agency an opportunity to 
urge people to consult the identifying information about the product.
    Some of the commenters opposed the rule because they believed that 
the provision of incomplete lists of retailers by FSIS could weaken 
public health protection by providing consumers a false sense of 
security. These commenters felt that incomplete lists, even if 
accompanied by an appropriate explanation, would not be helpful. 
Consumers might assume that product from unlisted stores was safe to 
eat, and they would not check the product information provided in the 
Agency's press release in addition to the store information. Other 
commenters believed that incomplete lists would force consumers to 
return repeatedly to FSIS' Web site. An explanatory statement, in 
itself, they stated, indicates that consumers should not place 
confidence in the list when deciding what to do about recalled 
products. On the other hand, commenters favoring the proposal said that 
some information is better then none, and that FSIS should post the 
retail consignee information, even if incomplete, along with an 
appropriate explanation stating that, for example, the posting consists 
of retail consignees known to date.
    FSIS has concluded that the retail consignee information will 
effectively complement the product information currently made available 
and will be helpful to consumers in responding to the recall. While 
there is always some slight potential for misinterpretation of the 
retail consignee information, FSIS has also concluded that an 
appropriate explanatory statement will minimize any such potential. As 
discussed previously, FSIS will post an explanatory statement on its 
Web site, along with the retail consignee information.
    The Agency also thinks that local media outlets, including 
television stations and newspapers, will publicize the names and 
locations of new retail consignees as they are posted on FSIS' Web 
site. FSIS will also notify relevant State officials if retail stores 
in their states are identified as having received recalled product.
    One commenter suggested that, as an alternative to this rulemaking, 
the Agency might consider providing additional consumer education 
materials that would encourage consumers to focus on available product 
identification information.
    While FSIS agrees that improvements in consumer education might 
encourage consumers to focus on available product identification 
information, improving consumer education alone will not achieve the 
goals of this rule. As stated previously, the retail consignee 
information will complement the product identification information that 
FSIS already makes available and will provide additional opportunities 
for local media outlets and State and local health officials to 
transmit more targeted information about the recall to consumers. FSIS 
will certainly explore additional ways to improve communication and 
consumer education concerning recalls and hopes to work with industry, 
consumer groups, and other stakeholders to achieve this end.
    FSIS' goal in a recall is to provide the important information that 
allows consumers to identify recalled product and to determine whether 
that product is in their possession as effectively and quickly as 
possible. FSIS has already taken several steps to assist consumers in 
identifying recalled product. FSIS agrees with the commenter, for 
example, that information about the frequent availability of photos of 
the recalled product labels on the FSIS Web site should be promoted. 
That is why each Agency press release or other information on the FSIS 
Web site already includes photographs of the recalled products' labels, 
if available. A fact sheet on recalls, which can be found on the 
Agency's Web site at https://www.fsis.usda.gov/Fact_Sheets/FSIS_Food_
Recalls/index.asp, also informs readers that FSIS includes pictures of 
the recalled product as part of the online recall press release. Each 
press release or RNR also informs consumers that the label bears the 
establishment number inside the USDA seal of inspection and provides 
the timeframe during which the recalled product was produced, another 
piece of information that the commenter believes consumers would find 
useful.
    Some industry commenters opposing the proposal stated that retail 
consignee information is protected from mandatory public disclosure by 
exemption 4 of the FOIA because it is confidential business or 
commercial information, and the potential value of this information 
would not outweigh the competitive harm that would be caused by its 
release. They pointed out that FSIS has traditionally treated a

[[Page 40943]]

company's distribution list as confidential business information.\5\
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    \5\ See ``Sharing Recall Distribution Lists With State and Other 
Federal Government Agencies,'' (67 FR 20009; April 24, 2002).
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    The FOIA generally requires that agencies disclose records unless 
the records fall within one of the FOIA exemptions from disclosure, 
such as the exemption for trade secrets and commercial or financial 
information found in 5 U.S.C. 552(b)(4). In this situation, an agency 
must analyze whether the information constitutes privileged or 
confidential commercial information within the meaning of 5 U.S.C. 
552(b)(4).
    FSIS, however, in considering the application of Exemption 4, has 
determined that the names and locations of retail consignees of 
recalled meat and poultry products compiled by the Agency do not 
constitute confidential commercial information because the disclosure 
of this information will not impair the Agency's ability to obtain 
necessary information in the future and will not cause substantial harm 
to the competitive position of any business.
    As noted in the proposed rule in this proceeding, FSIS is not 
releasing a firm's distribution list to the public. The Agency is also 
not posting the names and locations of any of the intermediate 
consignees that received recalled product or that routinely receive 
product from that firm. Rather, FSIS is making public a list that FSIS 
personnel compile of only the retail consignees that received recalled 
product. This would be true even in those rare instances in which the 
list of retail consignees includes all of the recalling establishment's 
customers.
    Because of the complex food distribution system in the United 
States, which can include multiple wholesalers or other intermediate 
distributors, it is quite possible, and perhaps likely, that the retail 
consignees that ultimately sell the product to the consumer are not 
customers of the federal establishment that produced the product. 
Therefore, only very rarely, if ever, will the names and locations of 
retail consignees expose a recalling establishment's entire customer or 
distribution list. Even in such circumstances, the establishment's 
customer list will not be identified as such. As a result, members of 
the public and industry will not be able to determine what significance 
the list has for the recalling establishment.
    The disclosure of the names and locations of retail consignees of 
recalled meat and poultry products compiled by the Agency is not likely 
to impair FSIS's ability to obtain the names of consignees that have 
received recalled product. Under the FMIA, PPIA, and the implementing 
regulations that FSIS has adopted under those Acts, persons engaged in 
the business of buying, selling, or transporting meat and poultry 
products are required to give representatives of FSIS access to their 
records.\6\ Among the records that are required to be kept are those 
that provide a description of the articles sold, including the net 
weight of the articles, the name and address of the buyer of the 
articles sold by the person, and the name and address of the consignee 
or receiver, if other than the buyer.\7\ Because retail consignees that 
have received recalled meat and poultry products are engaged in the 
business of buying (and selling) meat and poultry products, they must 
keep various required records associated with those products, and they 
must make them available to FSIS. As such, FSIS's disclosure of those 
retail consignee names is not likely to impair the Agency's ability to 
obtain the names of such consignees in the future.
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    \6\ 21 U.S.C. 642(a), 460(b) and 9 CFR 320.1(a), 320.4, 
381.175(a), 381.178
    \7\ 9 CFR 320.1(b), 381.175(b).
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    FSIS has also determined that disclosing the names and locations of 
retail consignees that have received meat and poultry products that are 
the subject of a Class I recall will not cause substantial harm to any 
business. Companies have a general, affirmative interest in letting 
consumers know where product is available for purchase, and they make 
this information known in various ways, including company Web sites and 
advertising. Thus, where the product that is the subject of a Class I 
recall is branded, the company will suffer no substantial harm from the 
release of retail consignee names and locations.
    Even when unbranded product is the subject of a Class I recall, 
there will not be substantial competitive harm from release of the 
consignee list. First, the fact that the company that produced the 
unbranded product is experiencing a recall is known. It is disclosed by 
the Agency's press release. Second, in this situation, the name of a 
supplier of unbranded product (e.g., ground beef) is of minimal to no 
commercial value. Furthermore, information as to the type of product 
sold in the store is readily available from its advertising or from 
visiting the store.
    Finally, there is no reason to believe that the retailer would 
suffer substantial harm to its competitive position from the release of 
its name. Many retailers post notices of recalls in their stores, and 
some take affirmative steps to notify consumers of recalls by, for 
example, contacting holders of customer loyalty cards who purchased the 
product. This behavior is simply inconsistent with a claim of harm.
    For all of these reasons, the Agency has determined that the retail 
consignee information does not constitute confidential commercial 
information.
    FSIS does not intend to change how it compiles its lists of the 
consignees to whom recalled products have been distributed as a result 
of this rule, nor does it anticipate that recalling establishments will 
do so either. FSIS routinely compiles consignee information when a 
recall occurs, and it expects that recalling firms will continue to 
make available to the Agency information on the firms to which it has 
shipped the recalled products, consistent with regulatory and statutory 
requirements.
    Some commenters stated that the proposal may force firms recalling 
product out of business because those firms' competitors will take 
their retail customers during a vulnerable time period. These 
commenters also stated that the rule will damage the relationship 
between processors and their customers, allowing competitors to take 
advantage of the situation.
    FSIS disagrees. The situation described by the commenters already 
arises whenever there is a meat or poultry recall. When there is a 
recall, retail consignees seek to replace the recalled product as 
quickly as possible. To do so, they may turn to their regular 
supplier's competitor for a similar product, or they may ask their 
supplier to replace the recalled product. Whether the processor-retail 
consignee relationship is impaired by a recall is a function of the 
nature, scope, and circumstances of the recall, not of the disclosure 
of the consignee list.
    FSIS recognizes that a retail consignee may be solicited by a new 
supplier attempting to use a recall as a basis for gaining new 
customers, and that the supplier may identify the consignee from the 
posted list. No evidence has been presented in this rulemaking 
proceeding, however, that the availability of a list of recall 
consignees will significantly enhance the effect of those efforts. In 
fact, through the years, many retail stores have made clear that they 
sold product that was the subject of a recall through signs, placards, 
and contacts with holders of bonus or club cards. Through these steps, 
these retail stores have made clear to the public that they carried the 
recalled product and thus they made themselves readily

[[Page 40944]]

identifiable to competitors of the recalling firm. Accordingly, the 
Agency has concluded that there is no basis upon which to conclude that 
any substantial harm will result.
    A few commenters expressed concern that public interest groups may 
use the retail consignee lists to encourage their members to harass or 
boycott businesses involved in a recall and not to improve consumer 
awareness of recalls. These commenters expressed concern that such use 
could result in damage to the reputation of an establishment or its 
customers.
    As discussed above, many retail stores have notified their 
customers and the public when they have sold recalled meat and poultry 
products. Nonetheless, the commenters raising this concern did not cite 
specific occurrences of retailer harassment or boycotts due to the 
self-release of retailer names, nor is the Agency aware of any 
situation where this information has been misused in the way suggested 
by the commenters.
    One commenter suggested that distributing the names and locations 
of retail consignees to the public is not necessary for the proper 
performance of the functions of the Agency and suggested that the 
proposed rule was inconsistent with the Paperwork Reduction Act.
    FSIS disagrees. This rule imposes no new information collection 
requirements on the regulated industry. Under this final rule, FSIS 
will continue to compile the names and locations of retail consignees 
that have received recalled meat and poultry products. The only change 
is that FSIS will be making this list public.
    As previously noted, FSIS already requires federally-inspected 
establishments and companies that engage in the business of buying or 
selling meat or poultry products to maintain records that will fully 
and correctly disclose all transactions involved in their businesses 
subject to the FMIA and PPIA.\8\ These entities must also allow 
representatives of the Secretary of Agriculture access to their places 
of business so that they can examine and copy all the records.\9\
---------------------------------------------------------------------------

    \8\ 21 U.S.C. 642(a), 460(b) and 9 CFR 320.1, 381.175.
    \9\ 21 U.S.C. 642(a), 460(b) and 9 CFR 320.4, 381.178.
---------------------------------------------------------------------------

    FSIS routinely compiles information contained in these records in 
carrying out its existing recall procedures.\10\ FSIS is not requiring 
companies to submit any new or different information to the Agency as a 
result of this rule. The burden remains on FSIS to compile and 
distribute the information.
---------------------------------------------------------------------------

    \10\ OMB control number 0583-0015.
---------------------------------------------------------------------------

    Furthermore, sections 677 of the FMIA and 467d of the PPIA provide 
that section 9 of the Federal Trade Commission Act (FTCA) (15 U.S.C. 
49) is applicable to the administration and enforcement of the FMIA and 
the PPIA. Under Section 9, duly authorized agents of the Secretary 
have, at all reasonable times, access to, for the purpose of 
examination, and the right to copy, any documentary evidence of any 
person, partnership, or corporation being investigated or proceeded 
against.
    A few commenters stated that the proposal is not in conformity with 
the Data Quality Act (DQA) because the data will not be compiled by 
FSIS in a timely fashion and is not of sufficient quality because it 
could be inaccurate.
    FSIS disagrees with these commenters and has determined that this 
rule fully complies with applicable requirements of the DQA and 
relevant guidelines issued thereunder. Under this rule, accurate, 
objective information will be disseminated to the public that will be 
useful in helping consumers to determine if they possess recalled meat 
and poultry products.
    USDA's Information Quality Activities Regulatory Guidelines require 
that the information disseminated by USDA agencies and offices in 
conjunction with their rulemaking activities be reasonably reliable and 
reasonably timely. From direct contacts with the producer and 
distributors of the recalled product, FSIS compiles a list of retail 
consignees that have received recalled meat and poultry products, 
generally within 10 days of the initiation of the recall. It is from 
these contacts that the Agency will compile, and then post on its Web 
site, the listing of retail consignees that have received meat and 
poultry products subject to a Class I recall. Because the contacts with 
the producer and distributors are direct, FSIS has determined that the 
lists of retail consignees are reliable. FSIS is committed to posting 
the information in a timely fashion.

Executive Order 12866 and Regulatory Flexibility Act

    This rule was reviewed by the Office of Management and Budget under 
Executive Order 12866 and was determined to be significant.
    FSIS, after reviewing public comments to the proposed rule, 
concluded that further analysis of the costs and benefits of the rule, 
and a regulatory flexibility analysis was warranted. The Agency 
analyzed the potential impact of the final rule on small meat and 
poultry establishments and small retail firms as part of this Final 
Regulatory Flexibility Analysis. The Final Regulatory Flexibility 
Analysis data is included in this final regulatory impact analysis 
(FRIA) and is presented below.
    This FRIA differs from the preliminary regulatory impact analysis 
(PRIA) that was published for the proposed rule. First, the FRIA now 
focuses only on Class I recalls. Even though this does not 
significantly affect the impact analysis, FSIS has concluded that it is 
prudent to modify the rule to apply only to those recalls involving 
products that present the greatest risk to public health. Second, more 
of the analytic information is provided so that the public can better 
understand the number of recalling establishments and retailers that 
are affected.
A. Need for the Rule
    FSIS is taking this action to provide an additional mechanism for 
prompting consumers to examine products stored in their refrigerator, 
freezer, or cupboard when there is reasonable probability that the 
product will cause adverse health consequences. The retail consignee 
information will complement the product identification information that 
FSIS already makes available and may provide additional opportunities 
for local media outlets and State and local health officials to 
transmit more targeted information about the recall to consumers.
B. Baseline
    The baseline provides a set of conditions against which the costs 
and benefits of the rule can be measured. It is important to note that 
the baseline for this rulemaking takes into account that, in some 
cases, Class I recalled products have not reached the retail level at 
the time the recall is initiated.
1. Recall Procedures
    Once an establishment agrees to recall adulterated or misbranded 
meat or poultry products, FSIS widely disseminates information about 
the recalled product to the public. For Class I recalls, FSIS issues a 
press release to media outlets. The press release lists the names of 
the states to which recalled product was shipped, if less than 13 
states are affected. If the recall extends to 13 or more states, it is 
considered to be a nationwide recall, and FSIS does not list the names 
of the states to which the recalled product was shipped. FSIS sends 
recall information to wire services and media services in the areas 
where the product was distributed. In addition, FSIS sends recall 
information to several

[[Page 40945]]

media and constituent list-servers. The Agency also informs or works 
with affected State and local public health officials to identify 
recalled products. These State and local public health officials then 
further publicize the information about the recalled products.
    The only change in the recall process brought about by this rule is 
that FSIS will make available to the public the names and locations of 
retail consignees of meat and poultry products subject to a Class I 
recall, as they are identified by FSIS inspection program personnel.
2. Total Number and Size of Recalls
    The total number of Class I recalls and the amount of product for 
all classes recalled for 2000-2007 are shown in Table 1. The last 
column shows that the majority of recalls are Class I recalls (ranging 
from 63.5% to 99.9% of total recalled products), although the number 
and the volume of Class 1 recalls varied from year to year.

             Table 1.--Number of Class I Recalls and Volume of Class I and Total Recalls (in Pounds)
----------------------------------------------------------------------------------------------------------------
                                                                                      Total volume    Class I as
                                                          Number of  Volume class I  of all classes   a percent
                     Year of recalls                       class I       recalls       (I, II, and     of total
                                                           recalls                    III) recalls     recalls
----------------------------------------------------------------------------------------------------------------
2000....................................................         65      21,099,672      22,743,092         92.8
2001....................................................         61      21,230,301      33,410,564         63.5
2002....................................................         81      56,415,558      58,911,071         95.8
2003....................................................         45       2,288,040       3,503,689         67.0
2004....................................................         40       2,454,558       2,882,018         85.4
2005....................................................         48       5,940,089       6,446,149         92.5
2006....................................................         26       4,785,669       5,947,933         80.5
2007....................................................         50     142,885,981     143,063,822         99.9
----------------------------------------------------------------------------------------------------------------
Source: FSIS, Recall Management Staff, March 2008. Historical recall information is available at:
  www.fsis.usda.gov.

3. Amount of Product Recovered
    While the majority of recalls in the past eight years (2000-2007) 
were Class I recalls, the recovery rate of Class I recalled products 
was relatively low in six out of the eight years. The average annual 
percentage of product recovered from a Class I recall was only 27.7 
percent (Table 2).

 Table 2.--Number of Food Product Class I Recalls: Amount Recalled, and
                                Recovered
------------------------------------------------------------------------
                                    Volume of      Volume
                                  recalls  (in   recovered    Percentage
              Year                   million    (in million   recovered
                                      lbs.)        lbs.)
------------------------------------------------------------------------
2000............................         21.1          3.37         16.0
2001............................         21.23         4.46         21.0
2002............................         56.42         9.20         16.3
2003............................          2.29         0.49         20.6
2004............................          2.45         1.43         58.4
2005............................          5.94         4.46         74.4
2006............................          4.79         0.66         13.8
2007............................        142.89         1.65          1.2
------------------------------------------------------------------------
Source: FSIS, Recall Management Staff, March 2008.

4. Number of Retail Consignees
    Retail consignees are defined as establishments that receive 
product directly from a federally-inspected meat or poultry 
establishment or through an intermediary, i.e., distributor or 
wholesaler, also called an intermediate consignee. A retail consignee 
sells product received in this manner to the final consumer. 
Distributors or institutions that do not sell product directly to the 
general public are not retail consignees. Restaurants are not retail 
consignees.
    The number and type of retail consignees potentially affected by 
the final rule are shown in Table 3. This is a total of about 73,215 
retail firms. The retail trade sector comprises facilities engaged in 
retailing merchandise, generally without transformation, and rendering 
services incidental to the sale of merchandise (U.S. Census Bureau, 
2002 Economic Census: Retail Trade). Retailing is the final step in the 
distribution of merchandise.

[[Page 40946]]



   Table 3.--Retail Firms Handling Product Primarily Subject to Recall
------------------------------------------------------------------------
                                                              Number of
       NAICS code           Kind of business     Number of   small firms
                                                 firms \1\       \2\
------------------------------------------------------------------------
44511...................  Supermarket and            42,318       34,638
                           other grocery
                           (except
                           convenience) stores.
44512...................  Convenience stores..       25,527       25,410
44521...................  Meat markets........        5,354        5,024
45291...................  Warehouses and                 16            3
                           Supercenters.
                                               -------------------------
    Total \3\...........  ....................       73,215       65,075
------------------------------------------------------------------------
\1\ Source: U.S. Census Bureau, 2002 Economic Census: Retail Trade.
  Establishment and Firm Size EC02-4455-52. November 2005.
\2\ Small Business Administration, Office of Advocacy. Comment to FSIS
  Docket Clerk, May 4, 2006 regarding Docket No. 04-006P. Firms
  comprised of supermarkets, convenience stores, and warehouse clubs are
  defined as small if annual sales are less than $25 million; meat
  markets are small if sales are less that $6.5 million.
\3\ This is an undercount of the number of retail firms that would be
  subject to recalls because there are firms that are primarily fueling
  stations or drug stores that sell relatively small quantities of milk,
  bread, convenience foods, and packaged lunch meat that are not counted
  by the U.S. Census Bureau.

    The kinds of businesses identified as potentially subject to the 
final regulation are:
     44511--Supermarkets and other grocery (except convenience) 
stores. These facilities sell a general line of food.
     44512--Convenience stores. This industry comprises 
facilities known as convenience stores or food marts (except those with 
fuel pumps) primarily engaged in retailing a limited line of goods that 
generally includes milk, bread, convenience foods, soda, and snacks.
     445210--Meat markets. These facilities are engaged in 
retailing fresh, frozen, or cured meats.
     452910--Warehouse clubs and supercenters. This industry is 
comprised of facilities known as warehouse clubs, superstores, or 
supercenters primarily engaged in retailing a general line of groceries 
in combination with general lines of new merchandise, such as apparel, 
furniture, and appliances.
     In addition, there are a number of retail firms that would 
be subject to recalls because, while these firms primarily sell fuel or 
drug stores items, a small fraction of their sales represent milk, 
bread, convenience foods, and packaged lunch meat.
    Most, if not all supermarkets, convenience stores, meat markets, 
and warehouse clubs sell product from federally-inspected 
establishments and derive a significant share of revenue from those 
products. While fueling stations and drug stores sell product from 
federally-inspected establishments, they derive an insignificant share 
of revenue from those products. If Class I recalled products from 
federally-inspected establishments were to be sold by these fueling 
stations and drug stores, then their names and locations would be made 
publicly available by FSIS during the relevant recall investigation 
since they would be considered retail consignees that have received 
Class I recalled meat and poultry products.

C. Description of Alternatives

    FSIS considered several options, including amending its regulations 
to include local health departments as entities that could receive 
recall distribution lists or making the lists available only in 
response to Freedom of Information requests and to State agencies with 
agreements under 9 CFR 390.9. In addition, FSIS considered further 
education of consumers, but FSIS already has education programs and 
information on its Web site to inform consumers about how to identify 
recalled meat and poultry products. FSIS also considered making 
available to the public the names and locations of retail consignees of 
both Class I and Class II recalls. However, FSIS chose to limit the 
requirements of the final rule to Class I meat and poultry recalls 
because Class I recalls are reasonably likely to affect the public 
health, while Class II recalls are only remotely likely to affect the 
public health. Furthermore, most (64 to 99.9 percent) of the recalled 
products were Class I recalls (see Table 1). FSIS has adopted an 
approach that will alert individual consumers, State and local 
authorities, and other Federal agencies of the names of retail stores 
in which the Class I recalled products may be found in as expeditious a 
manner as possible.

D. Analysis of Cost

    For this rule, the cost impacts for meat and poultry processors and 
retail consignees are expected to be minimal.
1. Impact on Meat and Poultry Processors
    This action will not impose additional significant monetary cost on 
processing establishments conducting a Class I recall. FSIS 
acknowledges that some products might be incorrectly returned because 
they are similar to what is being recalled and are sold by the listed 
retailer. However, the Agency is aware that consumers already return 
products incorrectly (i.e., products not subject to recall) without 
knowing the retailers associated with the recalled products. Whether 
the incorrectly returned products would increase or decrease with the 
implementation of this rule is an empirical question. The Agency does 
anticipate that the volume of correctly returned products will increase 
as this rule is intended to enhance the effectiveness of recalls.
2. Impacts on Retail Outlets
    The effects of this rule on the product and financial markets for 
retail facilities that receive Class I recalled product are likely to 
be even less pronounced than those for the processing firms that 
produce the adulterated or mislabeled product. Already, some retail 
facilities, such as Wegman's, notify customers about Class I recalled 
meat and poultry products. Some costs may accrue for retail consignees 
as a result of increased product handling and disposal. As mentioned 
before, it is not certain whether the incorrectly returned products and 
the associated costs will increase or decrease as a result of this 
rule.

E. Analysis of Benefits

    If consumers use retail consignee information and are prompted to 
identify and return Class I recalled meat and poultry products, the 
recall process will be more timely and effective. Nonetheless, the 
Agency acknowledges that it is difficult, if not impossible to 
quantify, ex ante, the potential benefits, as one cannot predict what 
kind and how many recalls will take place in the future.

[[Page 40947]]

1. Increased Opportunity to Target Information to Consumers
    Information about the safety of food will cause consumers to 
respond if there is a clear and relevant message, actions are advocated 
that consumers can understand and accomplish, and there are continued 
reminders. If consumers have access to recall information that is 
meaningful, recall recovery rates can be expected to increase for Class 
I recalls, given the level of risk.\11\
---------------------------------------------------------------------------

    \11\ The rate of recovery of recalled product could be affected 
by other factors, however. The share of products affected by Class I 
recalls that are raw or ground is likely higher than that for other 
recall classes. Consequently, the product may move quickly through 
distribution and retail channels than processed or RTE products.
---------------------------------------------------------------------------

    The current recall system will be augmented by providing targeted 
information to consumers about the retail destinations of products 
subject to a Class I recall.
    The potential value of the Class I recall information depends on 
the consumer's ability to remember recent purchases of meat and poultry 
products and the ability of the information to trigger in the consumer 
the behavior to check whether he or she purchased the recalled product.
    Consumers may be prompted to take action if they are informed that 
the product was sold at the retail location where they purchase 
groceries for themselves and their families. The retail consignee 
information will effectively complement the product identification 
information that FSIS already makes available and will provide 
additional opportunities for local media outlets and State and local 
health officials to transmit more targeted information about the recall 
to consumers.
2. Effectiveness of Recalls
    The amount of product recovered during a recall depends on many 
factors. Among these factors are the amount of time taken to alert the 
public after the adulterated product has been identified, the time 
required by FSIS to perform recall verification activities, the type of 
product being recalled (some products are consumed within days of 
distribution), the amount of time the product is in distribution and 
retail channels, the efficiency of recalling establishment's recall 
management system, the depth into the distribution system the recall 
management system operates, the number of distributors through which 
the recalled product has moved, and the responsiveness of consumers to 
Class I recall information.
    As mentioned above, the objective of this rule is to improve the 
current recall system by providing targeted information to consumers 
about the retail destinations of products subject to a Class I recall. 
FSIS believes this rule will have an impact on recall effectiveness 
primarily through consumer responsiveness. FSIS also believes that 
making information concerning retail destinations available to the 
public may also influence the firms' efforts to recall their products; 
however, it is difficult to predict all of the variables that could be 
affected, given the differences among the various distribution channels 
for meat and poultry products.
    Because this rule provides an additional mechanism for prompting 
consumers to examine products, FSIS has determined that posting the 
list of retail consignees will enhance the effectiveness of Class I 
recalls.

F. Net Benefits

    There is no evidence to suggest that the impacts on retail 
establishments would be significant because Class I recalled products 
are typically credited to the affected retail establishment by the 
processing establishment that manufactured the product.
    The potential benefits of the rule hinge on the consumer being able 
to use the retail consignee information in combination with the 
information currently provided to identify product more quickly and 
effectively than he or she does currently, so that more illnesses and 
deaths can be avoided.
    Based on these factors, the Agency has determined that the expected 
benefits of the proposal exceed potential costs.

Final Regulatory Flexibility Analysis

    The Agency analyzed the potential impact of the final rule on small 
entity meat and poultry establishments and small entity retail firms 
that receive product subject to a Class I recall.
    The Agency's analysis of the adverse impacts of the rule on small 
retail firms focuses on the increased amount of product returns retail 
stores would receive in response to a Class I recall, even product that 
is not subject to the recall. The number and type of small entity 
retail consignees potentially affected by the final rule is shown in 
Table 3. This is a total of about 65,075 small retail firms. Some costs 
may accrue as a result of increased product handling and disposal. But 
as mentioned above, it is not certain whether incorrectly returned 
products and their associated costs will increase or decrease as a 
result of this rule.
    Based on the above analysis, the Agency has concluded that the rule 
will not have a significant economic impact on a substantial number of 
small entities.

References

1. Buzby, Jean, Paul D. Frenzen, and Barbara Rasco. 2001. ``Product 
Liability and Microbial Foodborne Illnesses,'' AER-799, USDA, 
Economic Research Service, Washington, DC.
2. RTI, International. June 2005. Survey of Meat and Poultry 
Slaughter and Processing Plants. Final Report. RTI Project Number 
08893.007. Research Triangle Park, NC 27709.
3. RTI, International. April 2006. Survey of Meat and Poultry 
Processing Only Plants. Final Report. RTI Project Number 
0208893.016. Research Triangle Park, NC 27709.
4. U.S. Census Bureau. 1997 Economic Census, Retail Trade. EC97R455-
SM. Issued January 2001. https://www.census.gov/prod/ec97/97r44-
sm.pdf.

Paperwork Requirements

    No new paperwork requirements are associated with this final rule. 
FSIS is making available to the public on its Web site the names and