Nutrition Labeling of Single-Ingredient Products and Ground or Chopped Meat and Poultry Products, 67736-67800 [E9-29323]
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DEPARTMENT OF AGRICULTURE
between 8:30 a.m. and 4:30 p.m.,
Monday through Friday.
Food Safety and Inspection Service
FOR FURTHER INFORMATION CONTACT:
Sally Jones, Senior Technical Advisor,
Labeling and Program Delivery Division,
Office of Policy and Program
Development, Food Safety and
Inspection Service, U.S. Department of
Agriculture, Beltsville, MD 20705; (301)
504–0878.
9 CFR Parts 317 and 381
[FDMS Docket No. FSIS–2005–0018]
RIN: 0583–AC60
Nutrition Labeling of Single-Ingredient
Products and Ground or Chopped
Meat and Poultry Products
AGENCY: Food Safety and Inspection
Service, USDA.
ACTION: Supplemental Proposed Rule.
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SUPPLEMENTARY INFORMATION:
Background
The Food Safety and
Inspection Service (FSIS) is issuing this
supplemental proposed rule that, if
finalized, will amend the Federal meat
and poultry products inspection
regulations to require nutrition labeling
of the major cuts of single-ingredient,
raw meat and poultry products, unless
an exemption applies.
DATES: Submit comments on or before
February 16, 2010.
ADDRESSES: FSIS invites interested
persons to submit comments on this
proposed rule. Comments may be
submitted by either of the following
methods:
• Federal eRulemaking Portal: This
Web site provides the ability to type
short comments directly into the
comment field on this Web page or
attach a file for lengthier comments. Go
to https://www.regulations.gov. Follow
the online instructions at that site for
submitting comments.
• Mail, including floppy disks or CD–
ROMs, and hand- or courier-delivered
items: Send to Docket Clerk, U.S.
Department of Agriculture (USDA),
FSIS, Room 2–2127, George Washington
Carver Center, 5601 Sunnyside Avenue,
Mailstop 5474, Beltsville, MD 20705–
5474.
Instructions: All items submitted by
mail or electronic mail must include the
Agency name and docket number FSIS–
2005–0018. Comments received in
response to this docket will be made
available for public inspection and
posted without change, including any
personal information, to https://
www.regulations.gov.
Docket: For access to background
documents or to comments received, go
to the FSIS Docket Room at the address
listed above between 8:30 a.m. and 4:30
p.m., Monday through Friday. All
comments submitted in response to this
proposal, as well as background
information used by FSIS in developing
this document, will be available for
public inspection in the FSIS Docket
Room at the address listed above
SUMMARY:
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Section I
Supplemental Proposed Rule: On
January 18, 2001, FSIS published a
proposed rule in the Federal Register
entitled, ‘‘Nutrition Labeling of Ground
or Chopped Meat and Poultry Products
and Single-Ingredient Products’’ (66 FR
4969). Because of the length of time
since the publication of the proposed
rule, FSIS is providing the public an
opportunity to comment on this
supplemental proposed rule. FSIS also
welcomes comments on relevant issues
for which there is new evidence since
the proposed rule was issued.
This supplemental proposed rule
responds to all comments received on
the January 18, 2001 proposed rule and
explains how the Agency intends to
proceed with a final rule. Although FSIS
has come to tentative conclusions
regarding the issues raised by the
commenters, in this supplemental
proposed rule, FSIS is requesting
additional comments on policies for
which there were significant differences
of opinion among commenters.
Specifically, under the ‘‘Provisions of
the Supplemental Proposed Rule’’
heading below, FSIS is requesting
comments on whether nutrition
information should be allowed on pointof-purchase materials for ground or
chopped products, as an alternative to
requiring nutrition information on the
product labels. FSIS is also requesting
comments on the use of statements of
lean percentages on the label or in
labeling of ground or chopped products
that do not meet the regulatory criteria
for ‘‘low fat.’’ In addition, under the
‘‘Provisions of the Supplemental
Proposed Rule’’ heading below, FSIS is
requesting comments on whether it
should provide an exemption from
nutrition labeling requirements for
small businesses that include a fat
percentage statement and lean
percentage statement on the labeling or
in labeling of ground or chopped
product. FSIS is requesting copies of
any studies, surveys, or other data on
consumers’ perception of and use of
point-of-purchase materials versus
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nutrition labels for ground or chopped
product and on consumers’
understanding of the nutrient content of
ground or chopped products. FSIS is
also requesting copies of any studies,
surveys, or data on consumers’ use and
understanding of fat percentage and
lean percentage statements on ground or
chopped products. FSIS will post on its
Web site, with this supplemental
proposed rule, all studies and data
submitted to the Agency in response to
this request. FSIS requests comment on
the potential effects of disallowing a
statement of lean percentage on ground
or chopped products.
FSIS will consider all comments
received in response to this
supplemental proposed rule. After
evaluating the comments, FSIS intends
to respond to them, make any
appropriate and necessary changes to
this rule, and issue the final rule in the
Federal Register.
The Proposed Rule
Major cuts: FSIS proposed to require
nutrition labeling of the major cuts of
single-ingredient, raw meat and poultry
products identified in §§ 317.344 and
381.444 that are not ground or chopped,
except for certain exemptions. FSIS
proposed that ‘‘ground beef regular
without added seasonings,’’ ‘‘ground
beef about 17% fat,’’ and ‘‘ground pork’’
would no longer be included in the list
of major cuts in § 317.344.
FSIS proposed to make the guidelines
in place for the voluntary nutrition
labeling program mandatory for the
major cuts of single-ingredient, raw
products that are not ground or
chopped. Thus, for these products, FSIS
proposed that nutrition information be
provided on the label or at point-ofpurchase, unless an exemption would
apply. For further explanation of the
guidelines for voluntary nutrition
labeling, see 66 FR 4971, January 18,
2001. For further explanation of the
proposal to make these guidelines
mandatory for the major cuts of singleingredient, raw products that are not
ground or chopped, see 66 FR 4973–
4975, January 18, 2001.
In the preamble to the proposed rule,
FSIS explained that, in its two most
recent surveys of the voluntary nutrition
labeling of single-ingredient, raw
products, FSIS found that significant
participation in the voluntary nutrition
labeling program did not exist (66 FR
4972, January 18, 2001). FSIS
regulations provide that a food retailer
is participating at a significant level (1)
if the retailer provides nutrition labeling
information for at least 90 percent of the
major cuts of single-ingredient, raw
meat and poultry products it sells; and
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(2) if the nutrition label on these
products is consistent in content and
format with the mandatory program, or
if nutrition information is displayed at
point-of-purchase in an appropriate
manner. The required nutrition labeling
provisions for multi-ingredient and heat
processed products are referred to as
‘‘the mandatory program.’’ The
regulations also provide that significant
participation by food retailers exists if at
least 60 percent of all companies that
are evaluated are participating in
accordance with the guidelines
(§ 317.343 and § 381.443). The term
‘‘companies,’’ as used in these
regulations, refers to individual stores.
FSIS used a representative sample of
stores to assess participation (see 58 FR
640, January 6, 1993). Based on the
survey data from the two most recent
surveys, less than 60 percent of stores
evaluated were participating in
accordance with the guidelines.
In the preamble to the proposed rule,
FSIS explained that, because the most
recent surveys showed that significant
participation in the voluntary nutrition
labeling program did not exist, FSIS
believed that the proposed rule was
necessary. FSIS stated that, without
nutrition information, consumers are
not able to assess the nutrient content of
the major cuts and thus cannot make
educated choices about these products
based on nutrition information. FSIS
believed that the lack of nutrition
information on the labeling of the major
cuts was misleading (66 FR 4973–4974,
January 18, 2001) because it fails to
disclose material facts about the
consequences of consumption of these
products. Consumers can compare the
fat content in major cuts of poultry
based on whether the product has skin
and based on the levels of attached fat
in the product. Similarly, consumers
can compare the fat content among
major cuts of meat products based on
internal marbling and attached fat.
However, without nutrition labeling for
the major cuts, consumers cannot assess
precise levels of fat (e.g., 10 grams vs.
20 grams of fat per serving) and cannot
know the levels of specific nutrients,
such as saturated fat, in these products.
Therefore, without nutrition labeling of
these products, consumers cannot make
educated choices about consuming the
major cuts.
The FMIA and PPIA provide that
product is misbranded if its labeling is
false or misleading in any particular (21
U.S.C. 601(n)(1) and 453(h)(1)). Without
nutrition information for the major cuts
of single-ingredient, raw products, FSIS
tentatively concluded that these
products would be misbranded under
section 1(n) of the FMIA or section 4(h)
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of the PPIA because the label would fail
to reveal significant material facts about
the consequences of consuming these
products(66 FR 4974, January 18, 2001).
As explained in the preamble to the
proposed rule, although FSIS believed
that nutrition information on the labels
of individual packages of singleingredient, raw products is useful, the
Agency proposed that nutrition
information for the major cuts could
also be provided on point-of-purchase
materials, because consumers have
reasonable expectations as to the
nutrient content of these products. Also,
FSIS stated that the nutrient content of
a given major cut is relatively uniform
across the market, and these products
are not formulated in the manner of
ground or chopped products (66 FR
4974, January 18, 2001).
Ground or Chopped Products: Ground
or chopped products that are multiingredient or heat processed products
are subject to the requirements of the
mandatory nutrition labeling program;
therefore, these products are already
required to bear nutrition labels, unless
they qualify for an exemption. FSIS
proposed to extend mandatory nutrition
labeling requirements to all ground or
chopped products, including singleingredient, raw ground or chopped
products, unless an exemption applies.
Thus, FSIS proposed to require that
nutrition labels be provided for all
ground or chopped products (livestock
species) and hamburger, with or without
added seasonings, unless an exemption
applies. Similarly, FSIS proposed to
require that nutrition labels be provided
for all ground or chopped poultry
(kind), with or without added
seasonings, unless an exemption
applies. Under the proposed rule,
products that would be required to bear
nutrition labels include singleingredient, raw hamburger, ground beef,
ground beef patties, ground chicken,
ground turkey, ground chicken patties,
ground pork, and ground lamb.
In the proposed rule, FSIS explained
that, unlike other single-ingredient, raw
products, producers are able to
formulate precisely the fat content of
ground or chopped products. Therefore,
in this respect, these products are
similar to products in the existing
mandatory program that are required to
bear nutrition labels (66 FR 4975,
January 18, 2001). FSIS noted that other
single-ingredient, raw products cannot
be formulated in the same manner or to
the same degree as ground beef products
(66 FR 4976, January 18, 2001).
FSIS noted that it believed that
consumers could not easily see the fat
in ground or chopped beef. In ground or
chopped beef products, the fat is
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uniformly distributed throughout the
product, and is not clearly
distinguishable on the surface of the
product (66 FR 4975, January 18, 2001).
FSIS also explained that the Agency
believed that consumers cannot estimate
the level of fat in ground or chopped
beef and cannot compare the levels of
fat in these products to those in other
products (66 FR 4975, January 18, 2001).
Similarly, FSIS explained that ground
lamb and ground pork may contain
varying amounts of fat and varying
nutrient content, which consumers
cannot visually detect (66 FR 4976,
January 18, 2001). Additionally, FSIS
noted that producers sometimes use
meat from advanced meat recovery
(AMR) systems and low temperature
rendering in ground or chopped beef or
pork products, which can affect their
nutrient content (66 FR 4975 and 4976,
January 18, 2001). Finally, FSIS noted
that, as with the fat on ground meat
products, consumers cannot readily
detect the fat content of ground poultry
products (66 FR 4976, January 18, 2001).
For these reasons, FSIS tentatively
concluded that ground or chopped meat
and poultry products that did not bear
nutrition information would be
misbranded under section 1(n)(1) of the
FMIA and section 4(h)(1) of the PPIA
(66 FR 4977, January 18, 2001).
FSIS proposed to require that
nutrition information for ground or
chopped products appear on the label of
these products (unless an exemption
applies), as is required for multiingredient and heat processed products,
rather than on point-of-purchase
materials because ground or chopped
products are similar to multi-ingredient
and heat processed products in that
certain parameters, such as their fat
content, can be controlled precisely to
obtain the desired product. In addition,
because there are numerous
formulations of ground or chopped
products, it would be difficult for
producers or retailers to develop pointof-purchase materials that would
address all the different formulations
that exist for these products.
Furthermore, it would be difficult for
consumers to find the correct
information for a specific ground or
chopped product on point-of-purchase
materials that include information
concerning numerous formulations of
these products (66 FR 4977, January 18,
2001).
Exemptions: FSIS proposed that
certain exemptions from nutrition
labeling requirements would apply to
the major cuts of single-ingredient, raw
meat and poultry products and ground
or chopped meat and poultry products.
FSIS proposed the following
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exemptions from nutrition labeling
requirements for ground or chopped
products: ground or chopped products
that qualify for the small business
exemption in §§ 317.400(a)(1) and
381.500(a)(1); ground or chopped
products in packages that have a total
surface area available to bear labeling of
less than 12 square inches, provided
that the product’s labeling includes no
nutrition claims or nutrition
information and provided that an
address or telephone number that a
consumer can use to obtain the required
information is included on the label;
ground or chopped products that are
intended for further processing; ground
or chopped products that are not for sale
to consumers; ground or chopped
products that are in small packages that
are individually wrapped packages of
less than 1⁄2 ounce net weight; ground or
chopped products that are custom
slaughtered or prepared; and ground or
chopped products that are intended for
export.
FSIS proposed the following
exemptions for major cuts of singleingredient, raw products that are not
ground or chopped: major cuts intended
for further processing; major cuts not for
sale to consumers; major cuts in small
packages that are individually wrapped
packages of less than 1⁄2 ounce net
weight; major cuts that are custom
slaughtered or prepared; and major cuts
that are intended for export.
FSIS proposed to exempt ground or
chopped products that qualified for the
small business exemption from
nutrition labeling requirements for the
main reason stated in the January 6,
1993, final rule: because these
requirements would create undue
economic hardship for small businesses
(58 FR 638). FSIS stated in the proposed
rule that it did not believe that the
reasons that necessitated the
establishment of the small business
exemption, as explained in the January
6, 1993 final rule, are applicable to the
major cuts of single-ingredient, raw
meat and poultry products produced by
small businesses. For these products,
FSIS proposed that nutrition
information may be provided on labels
or, alternatively, at their point-ofpurchase. In addition, FSIS explained
that it intended to make point-ofpurchase materials available over the
Internet free of charge. Therefore, the
nutrition labeling requirement for major
cuts of single-ingredient, raw products
should not impose an economic
hardship for ‘‘small businesses’’,
including those that are retail stores (66
FR 4978, January 18, 2001).
In the preamble to the January 6,
1993, final rule, FSIS explained that it
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was proposing an exemption from
nutrition labeling requirements for
products intended for further processing
and products not for sale to consumers
because consumers do not see the
nutrition information on products used
for further processing or products that
are not for sale to consumers. The
Agency also explained that it would
exempt individually wrapped packages
of less than 1⁄2 ounce net weight,
provided no nutrition claim or nutrition
information was made on the label,
because these products are an
insignificant part of the diet. With
regard to the custom exemption, the
Agency explained that an exemption
should apply because these custom
services are performed solely for
individuals. Finally, the Agency
explained that products intended for
export should be exempt because these
products are labeled according to the
requirements of the country where the
product is to be exported (58 FR 639,
January 6, 1993). In the January 18,
2001, proposed rule, the Agency
proposed these exemptions because the
Agency had tentatively determined that
the bases for these exemptions, as
explained in the January 6, 1993, final
rule, are valid as applied to nutrition
labeling for ground or chopped products
and for major cuts of single-ingredient,
raw products. Therefore, FSIS proposed
that any ground or chopped product or
major cut of single-ingredient, raw
product that qualifies for any of these
exemptions will continue to be exempt
(66 FR 4979, January 18, 2001).
Under current regulations, products
in packages that have a total surface area
available to bear labeling of less than 12
square inches are exempt from nutrition
labeling, provided the product’s labeling
includes no nutrition claims or nutrition
information and provided that an
address or telephone number that a
consumer can use to obtain the required
information is included on the label.
FSIS allowed for nutrition information
to be provided by alternative means for
products of this size in order to
incorporate sufficient flexibility in the
regulations (58 FR 47625, January 6,
1993). As explained in the proposed
rule, for ground or chopped products,
FSIS believes it is necessary to provide
this flexibility for products in packages
that have a total surface area available
to bear labeling of less than 12 square
inches, provided that the labels for these
products bear no nutrition claims or
nutrition information. However, because
nutrition information for the major cuts
of single-ingredient, raw meat and
poultry products may be provided on
point-of-purchase materials, FSIS
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proposed that the provisions for
providing nutrition labeling by alternate
means for products in packages that
have a total surface area available to
bear labeling of less than 12 square
inches would not apply to the major
cuts of single-ingredient, raw meat and
poultry products (66 FR 4979, January
18, 2001).
In the preamble to the proposed rule,
FSIS explained that restaurant menus
that include ground or chopped
products generally do not constitute
nutrition labeling or fall within the
scope of the proposed regulations.
Similarly, although a restaurant menu
would most likely not include a major
cut of single-ingredient, raw product, if
it did, the menu would not fall within
the scope of the proposed regulations.
Finally, the preamble explained that,
under the proposed rule, any ground or
chopped product or major cut of singleingredient, raw product represented or
purported to be specifically for infants
and children less than 4 years of age
would not be allowed to include certain
nutrient content declarations, because
infants and children less than 4 years of
age have different nutrition needs than
adults and children older than 4 years
of age (66 FR 4979, January 18, 2001).
In the 1993 final rule on nutrition
labeling, FSIS exempted from
mandatory nutrition labeling
requirements multi-ingredient products
processed at retail, and ready-to-eat
products packaged or portioned at retail.
The reasons that FSIS provided these
exemptions in the 1993 final rule were
that FSIS believed that it would be
impractical to enforce nutrition labeling
requirements on these products
prepared or served at retail and because
the Agency concluded, based on a
review of National Food Consumption
Survey (NFCS) data, that the average
person’s diet consisted of an
insignificant proportion of ready-to-eat
retail packaged products or retail
processed products (58 FR 639, January
6, 1993).
The proposed rule did not provide an
exemption for ready-to-eat ground or
chopped products packaged or
portioned at retail, or multi-ingredient
ground or chopped products that are
processed at retail because, as FSIS
explained in the 2001 nutrition labeling
proposed rule, there may be a
significant amount of multi-ingredient
ground beef retail processed products or
ready-to-eat retail packaged products.
Also, FSIS explained that the Agency no
longer believes enforcement of nutrition
labeling requirements at retail stores to
be impractical because FSIS is already
conducting testing for Escherichia coli
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(E. coli) O157:H7 at retail (66 FR 4979,
January 18, 2001).
For further explanation of the reasons
for the proposed exemptions, see 66 FR
4978–4980, January 18, 2001.
Nonmajor Cuts of Single-Ingredient,
Raw Meat and Poultry Products That
Are Not Ground or Chopped: FSIS did
not propose to require nutrition
information for single-ingredient, raw
meat and poultry products that are not
major cuts and that are not ground or
chopped. However, FSIS proposed that
if nutrition information is provided for
these products, it must be provided
according to the existing guidelines for
the current voluntary nutrition labeling
program. Therefore, under the proposed
rule, if nutrition information were
provided for these products, it would be
consistent with the nutrition
information required for the major cuts
of single-ingredient, raw products. In
the preamble to the proposed rule, FSIS
explained that the Agency could not
determine whether it would be
beneficial to require nutrition labeling
for nonmajor cuts that are not ground or
chopped until it assessed whether
adequate nutrition information is being
provided for these products (66 FR
4974, January 18, 2001).
Enforcement and Compliance: FSIS
conducts sampling and nutrient analysis
of products that fall under the
mandatory nutrition labeling program.
FSIS proposed that the procedures set
forth for FSIS product sampling and
nutrient analysis in §§ 317.309(h)(1)
through (h)(8) and 381.409(h)(1) through
(h)(8) would be applicable to ground or
chopped meat and to ground or
chopped poultry products, respectively.
FSIS explained that under the proposal,
FSIS would sample and conduct
nutrient analysis of ground or chopped
products to verify compliance with
nutrition labeling requirements, even if
nutrition labeling on these products is
based on the most current representative
data base values contained in USDA’s
National Nutrient Data Bank or the
USDA National Nutrient Database for
Standard Reference and there are no
claims on the labeling. Therefore, FSIS
would treat these products as it treats
other products required to bear nutrition
labels (66 FR 4980, January 18, 2001).
FSIS explained that it would treat
ground or chopped products in this way
because the fat content of these products
can vary significantly. In addition, the
preamble to the proposed rule stated
that FSIS employees cannot visually
assess whether nutrition information on
the label of ground or chopped products
accurately reflects the labeled products’
contents because, in most cases, it is not
possible to visually assess the level of
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fat in a ground or chopped product (66
FR 4980, January 18, 2001).
FSIS also proposed that if nutrition
labeling of the major cuts of singleingredient, raw products (other than
ground beef or ground pork) is based on
USDA’s National Nutrient Data Bank or
the USDA’s National Nutrient Database
for Standard Reference, and there are no
nutrition claims on the labeling, FSIS
would not sample and conduct a
nutrient analysis of the products. The
preamble explained that, for the major
cuts, FSIS personnel can visually
identify the particular cut. FSIS further
explained that, if the nutrition
information for these products is based
on USDA’s National Nutrient Data Bank
or the USDA National Nutrient Database
for Standard Reference, and there are no
nutrition claims on the labeling, it is not
necessary for FSIS to verify the accuracy
of the data because they are USDA data.
USDA has already evaluated these
USDA data and determined that they are
valid (66 FR 4980, January 18, 2001).
Permitting Percent Lean Statements
on labels or in labeling of ground or
chopped products: FSIS also proposed
to permit a statement of lean percentage
on the label or in labeling of ground or
chopped meat and poultry products that
do not meet the regulatory criteria for
‘‘low fat,’’ provided that a statement of
the fat percentage is also displayed on
the label or in labeling. FSIS proposed
that the required statement of fat
percentage be contiguous to, in lettering
of the same color, size, and type as, and
on the same color background as, the
statement of lean percentage. FSIS
stated that many consumers have
become accustomed to this labeling on
ground beef products, and that FSIS
believed this labeling provided a quick,
simple, and accurate means of
comparing all ground or chopped meat
and poultry products (66 FR 4981,
January 18, 2001).
Provisions of the Supplemental
Proposed Rule
Major cuts and nonmajor cuts that are
not ground or chopped: Consistent with
the proposal, should this rule become
final, FSIS will require nutrition
information for the major cuts, either on
their label or at their point-of-purchase.
The provisions of the voluntary
nutrition labeling program will be
mandatory for the major cuts. As FSIS
proposed, ‘‘ground beef regular without
added seasonings,’’ ‘‘ground beef about
17% fat,’’ and ‘‘ground pork’’ will no
longer be included in the list of major
cuts in § 317.344 because FSIS has
decided to treat ground meat and
poultry products differently than single
cuts of meat for the purposes of this
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regulation. Should this rule become
final, ground meat and poultry products
will be required to bear nutrition
labeling on their packages, unless an
exemption applies. Nutrition
information at the point-of-purchase for
ground or chopped products will not
meet the requirements of these
regulations.
FSIS believes that without nutrition
information, consumers are not able to
assess the nutrient content of the major
cuts and, thus, cannot make educated
decisions about these products based on
nutrition information. FSIS has
concluded that the lack of nutrition
information for the major cuts of singleingredient, raw products, either on their
label or at their point-of-purchase,
makes these products misbranded under
21 U.S.C. 601(n)(1) and 453(h)(1).
Although FSIS believes that nutrition
information on the labels of individual
packages of the major cuts of singleingredient, raw products is useful, this
final rule provides that nutrition
information for these products may be
provided at their point-of-purchase.
In the 1991 proposed rule and the
1993 final rule on nutrition labeling,
FSIS stated that if it determined, during
any evaluation of its voluntary
guidelines, that significant participation
did not exist, it would initiate proposed
rulemaking to determine whether it
would be beneficial to require nutrition
labeling on single-ingredient, raw meat
and poultry products (56 FR 60306,
November 27, 1991; 58 FR 640, January
5, 1993). Therefore, FSIS initiated
rulemaking to propose requiring
nutrition labeling for the major cuts of
single-ingredient, raw products.
Through this rulemaking, FSIS has
determined that because nutrition
information has not been universally
available for the major cuts of singleingredient products, consumers have
not been able to assess the nutrient
content of these products and, thus,
cannot make educated choices about
them, and about the significant portion
of their diet that these products
represent, based on nutrition
information. Without nutrition
information, the labeling of major cuts
of single-ingredient, raw meat and
poultry products fails to include
material facts about the consequences of
consuming these products. FSIS has
concluded that the lack of nutrition
information for the major cuts of singleingredient, raw products, either on their
label or at their point-of-purchase,
makes these products misbranded under
21 U.S.C. 601(n)(1) and 453(h)(1). FSIS
has determined that this rule is
necessary to ensure that consumers
obtain nutrition information concerning
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these products. Through the
supplemental proposed regulatory
impact analysis (PRIA), FSIS has
determined that this rule would result
in benefits to consumers and net
benefits to society.
Consistent with the proposed rule,
this supplemental proposed rule will
not require nutrition information for
nonmajor cuts of single-ingredient, raw
meat and poultry products that are not
ground or chopped.
FSIS has determined that it is not
appropriate or necessary to require
nutrition information for nonmajor cuts
that are not ground or chopped at this
time. They do not contribute in a major
way to the diet. Thus, at this time, the
consequences of consuming these
products cannot be considered to be a
material fact. In the future, FSIS will
reassess the production and
consumption volume of nonmajor cuts
that are not ground or chopped and will
determine the levels of consumption of
these products and whether sufficient
nutrition information is being made
available about them. After FSIS
assesses the volume of these products
and assesses the adequacy of nutrition
information provided for them, FSIS
will determine whether it is necessary
to propose nutrition labeling
requirements for these products, and
whether nutrition labeling requirements
for these products would be beneficial.
Should this rule become effective, if
establishments or retail facilities
voluntarily provide nutrition
information for nonmajor cuts of meat
and poultry products that are not
ground or chopped, they will have to
provide it according to the nutrition
labeling requirements for the major cuts.
Should establishments or retail facilities
choose to provide nutrition information
for these products, they will have to
either provide it at the point-ofpurchase, in accordance with § 317.345
or § 381.445, or on their label, in
accordance with § 317.309 or § 381.409.
Thus, the nutrition labeling provisions
for these products will be consistent
with those for the voluntary nutrition
labeling program.
As proposed, the supplemental
proposed rule would allow nutrition
information for the major cuts and
nonmajor cuts of single-ingredient, raw
products that are not ground or chopped
to be declared on either an ‘‘as
packaged’’ basis or an ‘‘as consumed’’
basis because most of these products
will not need FSIS compliance scrutiny.
If FSIS conducts nutrient analysis of
products under 317.309(h) or
381.409(h), it does so on the packaged
product. If nutrition information for
these products is based on USDA’s
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National Nutrient Database for Standard
Reference, and there are no claims on
the labeling, FSIS will not conduct a
nutrient analysis of these raw products
and, therefore, will not evaluate ‘‘as
packaged’’ nutrition labeling
information for these products.
Also consistent with the proposed
rule, under this supplemental proposed
rule, the declaration of the number of
servings per container would not need
to be included on the nutrition label for
the major or nonmajor cuts of singleingredient, raw products that are not
ground or chopped, because these
products are typically random weight
products. Existing regulations do not
require the number of servings on the
nutrition label of random weight
products (see §§ 317.309(b)(10)(iii) and
381.409(b)(10)(iii)).
Ground or Chopped Products:
Consistent with the proposed rule, this
supplemental proposed rule would
extend the mandatory nutrition labeling
requirements to all ground or chopped
products, including single-ingredient,
raw ground or chopped products, unless
an exemption applies. Should this rule
become effective, FSIS will require that
nutrition labels be provided for all
ground or chopped products (livestock
species) and hamburger, with or without
added seasonings, unless an exemption
applies. This rule would also require
that nutrition labels be provided for all
ground or chopped poultry products,
with or without added seasonings,
unless an exemption applies. After
analyzing the comments and for the
reasons discussed in the proposed rule
and discussed below in the response to
comments section, FSIS has concluded
that ground or chopped meat and
poultry products that do not bear
nutrition information on their label are
misbranded under 21 U.S.C. 601(n)(1)
and 453(h)(1).
FSIS recognizes that single-ingredient,
raw ground or chopped products have
not been required to bear nutrition
labels. In the proposed rule, FSIS
explained that, on June 3, 1997, the
Center for Science in the Public Interest
(CSPI) submitted a petition to the
Agency stating that FSIS should require
complete ‘‘Nutrition Facts’’ on ground
beef labels that make nutrient content
claims. This petition brought many of
the issues concerning the need for
nutrition labeling of ground or chopped
products to FSIS’s attention. Consistent
with CSPI’s petition, FSIS has
determined that nutrition information
should be required on packages of all
ground or chopped meat and poultry
products, unless an exemption applies.
(For more information on the petition
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from CSPI, see 66 FR 4975, January 18,
2001).
Most industry commenters did not
support requiring on-package nutrition
information for ground or chopped
products. Some of these commenters
supported requiring nutrition labeling
for these products at their point-ofpurchase. Individuals, consumer
organizations, and nutrition
organizations supported mandatory
nutrition labeling on the packages of
ground or chopped products.
FSIS requests comments on how
retailers or official establishments
would prepare point-of-purchase
materials that would address all
possible combinations of percent fat and
percent lean in ground or chopped
products. FSIS also requests comments
on how point-of-purchase materials
would convey the nutrient values of
ground or chopped products that
contain AMR product or product from
low temperature rendering (e.g., finely
textured beef or lean finely textured
beef). In addition, FSIS requests
comments on how consumers would
identify which nutrient values on pointof-purchase materials correspond to
specific ground or chopped products
available in the store, if a statement of
fat percentage or lean percentage is not
required on the product. Such
statements would not be required under
this supplemental proposed rule.
Finally, FSIS requests surveys, studies,
or other data on consumers’ perception
and use of point-of-purchase materials
versus nutrition labels for ground or
chopped products and on consumers’
understanding of the nutrient content of
such products.
Exemptions: This supplemental
proposal would provide all the
exemptions that it proposed for the
major cuts of single-ingredient, raw
meat and poultry products and for
ground or chopped products for the
reasons set forth in the proposal.
Consistent with the proposed rule, it
does not provide an exemption for
ready-to-eat ground or chopped
products packaged or portioned at retail
or multi-ingredient ground or chopped
products that are processed at retail. As
FSIS explained in the 2001 nutrition
labeling proposed rule, there may be a
significant amount of multi-ingredient
ground beef retail processed products or
ready-to-eat retail packaged products.
Also, as was stated in the proposed rule,
FSIS no longer believes enforcement of
nutrition labeling requirements at retail
stores to be impractical because FSIS is
already conducting testing for E. coli
O157:H7 at retail.
In response to comments, the
supplemental proposal provides an
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exemption from nutrition labeling
requirements for products that are
ground or chopped at an individual
customer’s request and that are prepared
and served or sold at retail, provided
that the labels or labeling of these
products bear no nutrition claims or
nutrition information.
Enforcement and Compliance:
Consistent with the proposed rule and
the reasons discussed in it, under this
supplemental proposed rule, FSIS
would sample and conduct nutrient
analysis of ground or chopped products
to verify compliance with nutrition
labeling requirements, even if nutrition
labeling on these products is based on
the most current representative database
values contained in USDA’s National
Nutrient Data Bank or the USDA
National Nutrient Database for Standard
Reference and there are no claims on the
labeling. Also consistent with the
proposed rule, for the major cuts that
are not ground or chopped, if nutrition
labeling of these products is based on
USDA’s National Nutrient Data Bank or
the USDA’s National Nutrient Database
for Standard Reference, and there are no
nutrition claims on the labeling, FSIS
would not sample and conduct a
nutrient analysis of these products.
Permitting Percent Lean Statements
on labels or in labeling of ground or
chopped products: Consistent with the
proposed rule, the supplemental
proposed rule would permit a statement
of lean percentage on the label or in
labeling of ground or chopped meat and
poultry products that do not meet the
regulatory criteria for ‘‘low fat,’’ as long
as a statement of fat percentage is
contiguous to, in lettering of the same
color, size, and type as, and on the same
color background as, the statement of
lean percentage. Because the percent fat
statement must be contiguous to the
percent lean statement and must be in
lettering of the same color, size, and
type as, and on the same color
background as, the lean percentage
statement, FSIS believes that the percent
lean statements will not mislead
consumers.
Under the proposed rule, if small
businesses produced ground or chopped
product and included a statement of
lean percentage and fat percentage on
the product’s label or in labeling, the
business would have been required to
include nutrition information on the
product label. Based on the National
Cattleman’s Beef Association (NCBA)
National Meat Case Study in 2004, 93
percent of ground beef packages had
statements of lean or fat percentages.
Sixty-eight percent of packages with
such statements had nutrition facts
panels and 25 percent did not. Because
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25 percent of ground beef packages in
the NCBA study had statements of lean
or fat percentages but did not have
nutrition facts panels, FSIS found it
reasonable to conclude that many small
businesses may include a statement of
the lean percentage on the label of
ground products but may not include
nutrition facts panels on the product
label. On this basis, FSIS concluded that
requiring small businesses that use the
lean percentage statement on the label
of ground products to also include
nutrition information on the label of
such products may result in significant
expenses for small businesses.
Therefore, in this supplemental
proposed rule, small businesses that use
statements of percent fat and percent
lean on the label or in labeling of
ground products would be exempt from
nutrition labeling requirements,
provided they include no other
nutrition claims or nutrition
information on the product labels or
labeling.
The majority of industry associations
supported the use of a statement of lean
percentage on the label or in labeling of
ground products that do not meet the
regulatory criteria for ‘‘low fat.’’ Because
of the longstanding use of the
statements of percent fat and percent
lean on the label or in labeling of
ground beef and hamburger products,
FSIS has concluded that such
statements on the label or in labeling of
ground products produced by small
businesses will not mislead consumers,
even if the small businesses do not
include nutrition information on the
products’ labels.
However, individuals and consumer
and nutrition organizations generally
did not support the use of statements of
lean percentages on the label or in
labeling of ground or chopped products
that do not meet the regulatory criteria
for ‘‘low fat.’’ Therefore, FSIS requests
comments on whether such statements
should be prohibited on the label or in
labeling of ground or chopped products
that do not meet the regulatory criteria
for ‘‘low fat.’’ FSIS requests comments
on whether lean percentage statements
are inherently misleading to consumers
on the label or in labeling of ground or
chopped product that does not meet the
regulatory criteria for ‘‘low fat’’ when
contiguous to fat percentage statements,
as the rule would require. FSIS also
requests comments on whether lean
percentage statements are redundant on
the label or in labeling of such products
when contiguous to fat percentage
statements. If commenters believe the
regulations should prohibit lean
percentage statements on the label or in
labeling of ground or chopped products
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that do not meet the ‘‘low fat’’ criteria,
FSIS requests comments on whether a
fat percentage statement on the label or
in labeling of such products would be
useful. If commenters believe such a
statement would be useful, do they
believe it should be required on the
label or in labeling for these products?
FSIS also requests comments on
whether the final rule should allow a
lean percentage statement and fat
percentage statement on the label or in
labeling of ground or chopped products
produced by small businesses if such
product does not include nutrition
information on the product label. If
commenters believe that nutrition
information should be required on
labels of any ground or chopped
product for which a lean percentage and
fat percentage statement is provided on
the label or in labeling, FSIS requests
comment on the costs of this
requirement for small businesses.
FSIS requests copies of surveys,
studies, or other data on consumers’ use
and understanding of lean percentage
and fat percentage statements on ground
or chopped products.
Effective Date
Should this rule become final, FSIS
intends that the requirements for ground
or chopped products would become
effective on January 1, 2012. FSIS issued
final regulations to establish this date as
the uniform compliance date for new
food labeling regulations that are issued
between January 1, 2009, and December
31, 2010 (73 FR 75564; December 12,
2008). As is discussed in the response
to comments below, FSIS issued the
uniform compliance regulations to
minimize costs associated with onpackage labels. Because this
supplemental proposed rule would
allow for the presentation of nutrition
information for the major cuts of singleingredient, raw meat and poultry
products at their point-of-purchase,
FSIS intends to make the labeling
requirements for the major cuts effective
one year from the date of publication of
the final rule. FSIS requests comments
on these two planned effective dates.
Availability of Nutrition Information
FSIS intends to make available
nutrition labeling materials that can be
used at the point-of-purchase of the
major cuts at the following Internet
address: https://www.fsis.usda.gov. Also,
the Food Marketing Institute (FMI) has
made available materials that can be
used at the point-of-purchase of the
major cuts at the following Internet
address: https://www.fmi.org/consumer/
nutrifacts/.
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The USDA National Nutrient Database
for Standard Reference is developed and
maintained by the Agricultural Research
Service (ARS) and can be found on the
Internet at the following address: https://
www.ars.usda.gov\nutrientdata.
Information is available at this site for
ground beef products containing 5%,
10%, 15%, 20%, 25%, and 30% fat. In
addition, ARS has included a calculator
on the Internet, with the Database.
Parties can enter the amount of fat (5%
to 30% percent fat) or lean (70% to 95%
lean) in a particular raw ground beef
product, and the calculator will
calculate the nutrient values for the
product based on the fat value entered.
The USDA National Nutrient Database
for Standard Reference also includes a
set of tables with nutrient values for
ground pork with fat levels from 4 to
28%, in one percent increments. ARS
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did not develop a calculator because, at
this time, labeling for ground pork at
retail does not include statements of
percentage fat or percentage lean. The
USDA Nutrient Database also includes
nutrient values for raw and cooked
ground chicken but does not include
nutrient values for such product at
varying fat levels. Ground chicken is not
typically produced over a wide range of
fat levels. ARS also has nutrient data for
three types of commonly marketed
ground turkey products. Nutrient values
for these products are not yet in the
database. However, ARS expects that
the nutrient values for these ground
turkey products will be available in the
database by August 2010. Most ground
poultry products are produced and
labeled at Federal establishments rather
than at retail.
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FSIS requests comments on whether
provision of nutritional tables will be
sufficient for retailers and
establishments to provide nutrition
labels for ground pork. FSIS also
requests comments on whether the
available data for ground chicken and
ground turkey in the USDA Nutrient
Database will be sufficient for retailers
and establishments.
Below are examples of nutrition labels
for ground or chopped products that
would meet the requirements of the
supplemental proposed rule. Should
this rule become final, FSIS will make
additional examples of acceptable
nutrition labels for ground or chopped
products available on the Agency’s Web
site.
BILLING CODE 3410–DM–P
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Summary of and Response to
Comments
FSIS received approximately 5,000
comments on the proposed rule from
individuals, consumer advocacy
organizations, academia, trade and
professional associations, health and
nutrition organizations, two county
health departments, meat and poultry
producers, and food retailers. The
majority of the comments
(approximately 3,500) were generated
from a letter writing campaign initiated
by a consumer organization. In addition,
there were approximately 450 form
letters that expressed consumers’
concerns and did not identify an
affiliation with any organization,
approximately 60 form letters from a
consumer co-op organization, and two
sets of form letters from relatively small
retail chains (approximately 10 letters in
each set).
A summary of issues raised by
commenters and the Agency responses
follows.
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Nutrition Labeling for the Major Cuts of
Single-Ingredient, Raw Meat and
Poultry Products
Comment: The majority of letters from
individuals, consumer groups, and
health organizations stated that FSIS
should require on-package nutrition
labeling for all single-ingredient, raw
meat and poultry products (major and
nonmajor cuts). They stated that pointof-purchase materials fail to convey
effectively the nutrition information for
specific fresh meat or poultry products
because the materials are difficult to
find and difficult to read. Some of these
commenters also stated that nutrition
labels are particularly important for
meat and poultry products because they
are a major source of fat, saturated fatty
acids, and calories.
A health organization stated that
because the same cut of meat can be
labeled by different names, consumers
would be better served by nutrition
information on the labels of the
products. Several commenters stated
that an advantage of including nutrition
information on the label is that
consumers could review the nutrient
content once the product is taken home,
and others, besides the primary food
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purchaser, would have better access to
the nutrition information. A nutrition
association stated that if FSIS permits
point-of-purchase information for fresh
meat and poultry packages, the Agency
should require on-package messages
directing consumers to point-ofpurchase labeling at another location in
the store.
One consumer association noted that
a recent telephone survey showed an
overwhelming percentage (78%) of the
respondents said that it was ‘‘more
useful’’ to provide nutrition information
about raw meat and poultry products on
package labels than on posters or
brochures.
Comments from a coalition of health
and consumer organizations suggested
that the nutrient content for ground
products often has less variance than
the nutrient content of specific cuts.
Thus, the coalition believes that it is
more important to provide nutrition
information on the labeling of major
cuts than on ground products. The
coalition also stated that the reasons
provided by the Agency for mandating
nutrition labeling on the packaging of
ground products would be the reasons
for mandating nutrition labeling on
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packaging of the major cuts of meat or
poultry (see 66 FR 4977). This coalition
also stated that there are more major
cuts than there are ground products, and
it would be difficult for producers or
retailers to develop point-of-purchase
materials to address the different
formulations and trim levels of the
major cuts; and it would be difficult for
consumers to locate the appropriate
information for a particular cut on the
point-of-purchase materials.
One health group stated that although
on-package labeling may be a more
effective approach for conveying
nutrition information than point-ofpurchase materials, the organization has
historically supported the use of pointof-purchase materials as an acceptable
means of nutrition labeling. This
commenter also stated that for singleingredient, raw products, other than
ground or chopped products, the use of
standardized averages is likely to be the
most effective way to provide nutrition
information, either on the package or at
point-of-purchase. An individual also
stated that for many major cuts, having
the nutrition label next to the product
would be sufficient.
A consumer organization did not
believe that consumers have reasonable
expectations as to the nutrient content,
including the fat, of raw meat and
poultry products. The organization
referenced a consumer telephone survey
in which most respondents were unable
to identify which cut of meat had the
highest fat content among four choices.
One medical organization stated that
although it may be true that the nutrient
content of the major cuts is relatively
uniform, consumers generally have no
idea of the nutrient content of these
foods.
The majority of industry and industry
associations supported the continued
use of point-of-purchase nutrition
information materials for the major cuts,
rather than nutrition labels on the
packages of these products. Two of
these groups presented results of focus
group research demonstrating that
consumers currently understand and
use point-of-purchase materials in
numbers comparable to the number of
consumers who read and use the
nutrition information on the labeling of
products subject to the requirements of
the mandatory nutrition labeling
program. Additionally, according to the
commenters, the focus group research
demonstrates that consumers are
generally satisfied with the current
nutrition information provided for fresh
meats.
One industry association stated that
the use of individual nutrition labels
may result in consumers’ viewing a
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smaller portion of the product and
paying a higher amount for the product,
because of the cost associated with
maintaining a vast number of labels to
be placed on the package. Additionally,
according to this commenter, if the
consumer intends to trim the fat from
meat or remove the skin from poultry
products, the nutrition information on
the label would not adequately
represent the product’s nutrition
information after fat had been trimmed
from it or skin from it had been
removed.
One industry commenter stated that it
is extremely difficult to provide
accurate nutrition information for each
major muscle cut because nutrient
content varies depending on the breed
and quality of each animal. Another
industry commenter stated that
although ‘‘average’’ numbers from the
USDA database are appropriate for
point-of-purchase materials, because of
the potential variations in specific
individual cuts, trims and grades, the
average numbers are not appropriate for
on-package labeling, where consumers
justifiably expect a label to accurately
define the exact nutrient content of
what is in that package.
Two industry commenters stated that
according to the Agency’s own survey,
62.7% of men and 57.9% of women
rarely or never use the nutrition
information provided on raw meat,
poultry or fish (see 66 FR 4982, January
18, 2001). They speculated that this low
usage may in part be explained by the
fact that consumers already have
reasonable expectations regarding the
nutrient values of these products as a
result of industry’s voluntary efforts to
provide this information. Similarly, one
retail association stated that consumers
have reasonable expectations as to the
nutrient content of major cuts, and that
the nutrient content of a given major cut
is relatively uniform across the market.
An industry commenter stated that,
unlike ground meat, consumers can see
and remove the fat from whole muscle
meat.
Another industry organization stated
that single-ingredient, raw meat and
poultry products have a unique quality:
the structure of the cut, including the
amount of fat, is visible both on the
exterior and within the muscle cut. As
a result, consumers can visibly discern
which products are leanest. However,
the commenter also believed that
consumers would benefit from
additional nutrition information
because consumers cannot discern the
quantitative nutrient content of singleingredient, meat and poultry products
without the nutrition information
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provided on point-of-purchase
materials.
Response: As FSIS proposed, should
this rule become final, it will require
that nutrition information be provided
for the major cuts of single-ingredient,
raw meat and poultry products, either
on the label or at the point-of-purchase.
Although FSIS continues to agree with
the commenters who stated that
nutrition labels on the major cuts of
single-ingredient, raw products are
useful, FSIS believes that consumers
have reasonable expectations as to the
nutrient content of these products and
can make comparative judgments about
the fat content of the various cuts. While
consumers’ expectations for these
products may not be perfect, they are
significantly more aware of the
nutritional content of single cuts of meat
than the nutritional content of ground
meat. Thus, the rule allows an
alternative way of providing nutrition
information for major cuts of singleingredient, raw products. As is
discussed above, even though FSIS
believes that consumers have reasonable
expectations concerning the nutrient
content of the major cuts, without
nutrition information for these products,
consumers cannot assess specific
nutrient levels in them and cannot make
educated choices about consuming
them. These educated choices are
significant to a consumer’s effort to
construct a healthy diet.
FSIS does not believe that the
telephone survey results used by a
consumer organization in support of
their belief that most consumers do not
have reasonable expectations of the
nutrient content of raw meat and
poultry demonstrate that consumers do
not have reasonable expectations
concerning the major cuts. FSIS does
not believe it is reasonable to expect
consumers in a telephone survey to be
able to identify which individual cuts of
meat or poultry have the highest fat
levels. However, if shown pictures of
the various cuts (that are not ground or
chopped), FSIS believes that most
consumers could identify the cut with
the most fat, by its internal marbling
and external fat cover. The medical
organization commenter that stated that
consumers generally have no idea of the
nutrient content of the major cuts
provided no data to substantiate this
statement.
Although individuals, and consumer
organization commenters, stated that
point-of-purchase materials are difficult
to read, they provided no explanation
for their assertion that these materials
are difficult to read. Their other concern
about the difficulty of finding point-ofpurchase materials will be taken care of
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by this rule. Should it become final, the
rule will require that point-of-purchase
materials be made available in close
proximity to the food (§ 317.345(a)(3)
and § 381.445(a)(3)).
Regarding the health organization’s
comment that the same cut of meat can
be labeled by different names, and thus
consumers would be better informed by
nutrition information on a product’s
label, FSIS is not aware that consumers
are confused about the names of the
major cuts of single-ingredient, raw
products listed on point-of-purchase
materials. FMI was involved in
developing these materials, and that
organization has the most current names
used to designate the major cuts.
However, if necessary, retail facilities
and establishments can include
multiple names for a major cut on pointof-purchase materials. In addition, if
FSIS is informed of specific cuts that are
identified by different names, FSIS will
revise the point-of-purchase materials
that it is making available on the
Internet.
After the comment period for the
proposed rule ended, FSIS received
correspondence from industry stating
that the list of major cuts in the
regulations should be changed to reflect
more accurately the most popular cuts
in the market. This correspondence
recommended removing certain cuts
and adding others. Because FSIS did not
propose to amend the codified list of
major cuts in the regulations and did
not provide an opportunity for the
public to comment on proposed changes
to the list, FSIS is not amending the list
of major cuts in the regulations at this
time. However, FSIS will review this
issue, and if the Agency determines that
a change in the list of major cuts is
warranted to accurately represent the
market, FSIS will pursue future
rulemaking.
Regarding the comments that noted
that an advantage of including nutrition
information on the label is that
consumers can review the nutrient
content of the product once the product
is taken home, and others besides the
primary food purchaser would have
better access to this information,
surveys, including the Diet and Health
Knowledge Survey (DHKS), show that a
majority of individuals report using
labels while buying foods. Although the
DHKS shows that adults who are not
main household shoppers use labels, the
survey shows that the main shoppers
use labels at a higher rate than those
who are not main household shoppers.
Also, FSIS assumes that if individuals
in a household have certain nutrition
practices and needs, the person who
purchases food for the household would
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take other household members’ needs
and preferences into account. In
addition, FSIS assumes that purchased
food would typically be consumed by
members of the household and not
thrown away.
In response to the comment that the
nutrient content of the major cuts may
be more variable than that of ground
products, FSIS recognizes that there is
significant variability in the nutrient
content of the major cuts depending on
the grade of the product and the levels
of exterior fat on the products. However,
the point-of-purchase materials that
FSIS and FMI have developed to convey
nutrition information for the major cuts
take into account this variability and
reflect average nutrition information for
these products. The information on the
point-of-purchase materials is
meaningful and accurate for the major
cuts. Consumers can view the point-ofpurchase materials to make educated
choices based on nutrition information
among the different major cuts. In
addition, to further distinguish among
different packages of the same major
cut, consumers can make comparisons
based on levels of visible fat on the
product.
This coalition’s other concern that it
would be difficult for producers or
retailers to develop point-of-purchase
materials to address the different
formulations and trim levels of the
major cuts need not be a concern. FSIS
and FMI have made available nutrition
information that can be displayed at the
point-of-purchase of the major cuts of
single-ingredient, raw meat and poultry
products. These point-of-purchase
materials will meet the nutrition
labeling requirements of this rule,
should it become final. Furthermore,
requiring that all major cuts of singleingredient, raw meat and poultry
products bear nutrition labels would be
a significant cost to the industry based
on FSIS’s supplemental proposed cost
analysis.
Comment: Two industry commenters
stated that it was appropriate for FSIS
to provide point-of-purchase materials
via the Internet. They believed that this
would lessen the burden on retailers
unable to develop appropriate
customized nutrition information. One
of these commenters also stated that the
Agency should develop point-ofpurchase materials so that the nutrition
information supplied would be accurate
and consistent.
With regard to the type of point-ofpurchase materials used to display
nutrition information, several
commenters stated that easy to
understand charts that convey the
information would be more helpful and
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informative to consumers than a
collection of individual labels on
display. One industry organization
commenter, however, stated that each
option of the display of nutrition
information on charts or on individual
display panels had advantages. This
industry organization believed that the
presentation of information in charts
which have vertical and horizontal
columns, that cover multiple products,
would allow consumers to make
comparisons and would consume less
space than individual labels. This
organization also stated that charts are
readily available to retailers. However,
this organization felt that consumers
might be more familiar with single
nutrition panels than with nutrition
charts covering multiple products.
Nevertheless, this organization believed
that the provision of nutrition panels for
every major cut at their point-ofpurchase would be costly and would
consume a significant amount of space
in retail settings. Thus, the organization
concluded that retailers should have the
freedom to present nutrition
information in any way that suits
customer needs, so long as it is not
misleading. Accordingly, the
commenter suggested that USDA
conduct research to determine the best
method of presenting such information.
Several industry commenters stated
that the Agency should describe the
information required but should not
prescribe a specific format or
presentation of the information so that
retailers that want to develop
customized point-of-purchase materials
can develop customized materials.
These commenters believed it was
important to provide as much flexibility
in the development of nutrition
materials as possible. One of these
commenters also stated that the Agency
should only prescribe the specific
required presentation of the nutrition
information after significant consumer
testing.
Response: The Agency will provide
nutrition information for the major cuts
of single-ingredient, raw products that
retailers can use at point-of-purchase at
the following Internet address: https://
www.fsis.usda.gov. Point-of-purchase
materials are also available from FMI at
the following Internet address: https://
www.fmi.org. At this time, FSIS intends
to provide information on charts with
columns that cover multiple products,
rather than providing a compilation of
individual nutrition facts panels. The
Agency does not intend to conduct
consumer surveys or additional research
to determine whether individual
nutrition labels or charts covering
multiple products would best address
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consumer needs because most
comments received on this issue
supported the use of charts covering
multiple products.
The Agency agrees with commenters
that it is important to provide as much
flexibility as possible in the
presentation of nutrition information on
point-of-purchase materials for the
major cuts of single-ingredient, raw
products. Therefore, should this rule
become final, FSIS will allow point-ofpurchase nutrition information for the
major cuts to be presented through a
variety of means, including signs,
brochures, notebooks, or leaflets in close
proximity to the food. The nutrition
labeling information may also be
supplemented by a video, live
demonstration, or other media.
Furthermore, if there is no nutrition
claim made on the point-of-purchase
materials, they will not be subject to any
of the format requirements applicable to
on-package nutrition labels. However, if
a nutrition claim is made on the pointof-purchase materials, all of the format
and content requirements applicable to
on-package nutrition labels in
§§ 317.309 and 381.409 will apply.
Consistent with existing voluntary
and mandatory nutrition labeling
program regulations, should this rule
become final, the Agency will provide
more flexibility for the presentation of
nutrition information for the major cuts
at the point-of-purchase than for the
presentation of nutrition information on
labels. FSIS believes this is appropriate
and necessary because there is no small
business exemption from nutrition
labeling requirements for the major cuts.
Also, FSIS does not want to impose any
burden on retailers that are following
the voluntary guidelines for voluntary
nutrition labeling.
Comment: One animal protection
organization supported allowing
nutrition information for the major cuts
of single-ingredient, raw products to be
provided on an ‘‘as packaged’’ basis, as
opposed to an ‘‘as consumed’’ basis,
because there are numerous cooking
methods, and the cooking method used
could affect the nutrient content of the
product. In addition, one industry
association supported allowing
nutrition information to be provided on
an ‘‘as consumed’’ basis for the major
cuts of single-ingredient, raw products.
Response: As proposed, for the major
cuts and nonmajor cuts of singleingredient, raw products, should this
rule become final, it will allow nutrition
information on the label or on point-ofpurchase materials to be declared on
either an ‘‘as packaged’’ basis or ‘‘as
consumed’’ basis because, as noted in
the proposed rule, most of the major
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cuts of single-ingredient, raw meat and
poultry products will not need FSIS
compliance scrutiny (66 FR 4974,
January 18, 2001). If nutrition
information for these products is based
on USDA’s National Nutrient Database
for Standard Reference, and there are no
claims on the labeling, FSIS will not
conduct a nutrient analysis of these raw
products and, therefore, will not
evaluate ‘‘as packaged’’ nutrition
labeling information for these products.
Consistent with the provisions in the
voluntary nutrition labeling program,
when nutrition information is presented
on an ‘‘as consumed’’ basis, retailers or
manufacturers will be required to
specify a method of cooking that will
not add nutrients from other ingredients
such as flour, breading, and salt
(§§ 317.345(d) and 381.445(d)). FSIS
welcomes further comment on this
issue.
Comment: An industry association
and animal protection organization
agreed that it was unrealistic to state the
‘‘servings per container’’ on the
nutrition labels of the major cuts of
single-ingredient, raw products because
the majority of these products are
random weight items.
Response: FSIS agrees that the
number of serving per container is not
necessary information on the nutrition
labels of the major cuts or nonmajor cuts
of single-ingredient, raw products,
because these products are typically
random weight products. For multiingredient and heat-processed products
that must bear nutrition labels, the
number of servings is not required on
random weight products
(§§ 317.309(b)(10)(iii) and
381.409(b)(10)(iii)).
Comment: Several industry groups
believed that the voluntary nutrition
labeling program should remain in
place, and that FSIS should not require
nutrition labeling of the major cuts of
single-ingredient, raw products. One
retail association stated that FSIS could
improve voluntary compliance with
nutrition labeling guidelines without
requiring nutrition labeling for the
major cuts by making the same free
information available that it plans to
make available under the new
regulations. Similarly, a form letter that
multiple retailers submitted stated that
FSIS could increase compliance with
the voluntary guidelines at less cost to
consumers than the regulations would
generate by providing free and updated
information to retailers. Several
individuals stated that the USDA should
not establish new labeling requirements
for meat products because they believed
that current labeling on these products
is sufficient.
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As noted above, two commenters
stated that according to the Agency’s
own data, 62.7% of men and 57.9% of
women rarely or never use nutrition
information on raw meat, poultry or
fish. Given such low usage, the
commenters stated that FSIS should not
require nutrition labeling for the major
cuts of single-ingredient, raw products
but should be more flexible in
encouraging greater participation in the
voluntary program.
Two industry commenters questioned
the accuracy of the USDA surveys that
did not find significant participation in
the voluntary nutrition labeling
program. They stated that the USDA
surveys in 1996 and in 1999 checked
only for the presence of the ‘‘new’’
formatted nutrition information; one of
these commenters stated that FSIS did
not announce in the Federal Register
that only ‘‘new’’ materials would be
considered.
These commenters also noted that
FSIS determined whether significant
participation in the voluntary nutrition
labeling program existed based on the
number of stores found to be in
compliance. However, these
commenters stated that equal
consideration should have been given to
the volume of product for which
nutrition information was provided and
the numbers of shoppers given access to
the information. These commenters
noted that volume-weighted
participation would have represented 60
percent participation in the voluntary
nutrition labeling program.
One of the commenters that
questioned the accuracy of the surveys
also stated that the surveys were not
conducted every two years; it is not
clear that every chain company was
included; neither the 1996 nor the 1999
survey reported on nutrition
information that was applied in label
form directly to the package; and the
surveys may have included stores that
the organization believes should be
exempt from the nutrition labeling
guidelines. The other commenter that
questioned the accuracy of the surveys
stated that, given a variance factor of 4%
(a conservative margin of error based on
2,000 stores, according to the survey
reports), store participation could have
been 70.5% in 1995, 61.5% in 1996, and
58.5% in 1999. In other words, FSIS
could have found significant
participation existed in two of the
surveys.
Response: FSIS continues to believe
that nutrition information for the major
cuts of single-ingredient, raw products
is important and necessary. In addition,
FSIS believes that requiring nutrition
labeling of the major cuts of single-
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ingredient, raw meat and poultry
products will result in benefits. FSIS
did encourage participation in the
voluntary nutrition labeling program
through meetings with industry.
Further, nutrition labeling materials for
the major cuts have been available on
FMI’s Web site for several years
(https://www.fmi.org). Despite this and
FSIS’s encouragement of the use of such
materials, the 1999 voluntary nutrition
labeling survey found a lower rate of
participation than the 1996 survey
found. Thus, the fact that nutrition
information was available was
insufficient to ensure consumers
received the necessary nutrition
information. By making the guidelines
currently in place for the voluntary
nutrition labeling program mandatory,
FSIS will ensure that consumers are
provided with necessary nutrition
information concerning the major cuts.
To determine how much of a
behavioral response and change in
dietary intake might result from
providing more nutrition information on
meat and poultry products in the
proposed rule’s benefits analysis, FSIS
assumed that when labels and other
sources of nutrition information were
provided for raw meat and poultry
products, the usage rates would rise to
match nutrition label usage rates for
food products as a whole (66 FR 4990,
January 18, 2001). As FSIS noted,
although some information was being
provided for some single-ingredient,
raw meat and poultry products,
nutrition information for these products
was not required. FSIS noted it could be
reasonably assumed that when nutrition
information becomes mandatory, more
consumers will use the nutrition
information for the major cuts of singleingredient, raw products.
FSIS does not believe that the surveys
conducted to determine whether there
was significant participation in the
voluntary nutrition labeling program
were inaccurate because they were not
conducted precisely every two years or
because of the manner in which FSIS
determined whether there was
significant participation. FSIS’s
regulations provide that the Agency
would evaluate significant participation
every 2 years (§§ 317.343(e) and
381.443(e)). However, the timing of
these surveys did not make them
invalid. Although FSIS did not conduct
the surveys precisely 2 years apart, the
Agency conducted the surveys
approximately every two years.
Further, the survey conducted in June
1995 included as participants in the
voluntary nutrition labeling program
those retailers who displayed at pointof-purchase either materials that were
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developed before or after issuance of the
1993 final rule on nutrition labeling.
The older nutrition information
materials, which were developed in
1992, did not comply entirely with the
voluntary nutrition labeling program
provisions in the 1993 final rule. For
example, the older materials did not
include the required percent daily
values for certain nutrients. Therefore,
the results of the 1995 survey may have
actually overestimated participation in
the voluntary nutrition labeling
program.
Additionally, the 1996 and 1999
surveys correctly only counted a store as
providing voluntary nutrition
information for meat and poultry
products if it displayed point-ofpurchase materials that were developed
after the final rule was published. FSIS
program officials had decided that by
1996 retailers had had enough time to
obtain the updated nutrition labeling
materials for display in their stores.
FSIS did not announce in the Federal
Register that only ‘‘new’’ materials
would be considered to meet the
voluntary nutrition labeling program
guidelines. However, FSIS met with
industry organizations and informed
them that, in the 1996 survey, the
Agency would only consider ‘‘new’’
materials to meet the voluntary
nutrition labeling program guidelines. It
could reasonably be expected that stores
that were participating in the program
would replace the materials over the
course of three years.
Moreover, consistent with its stated
intention to sample all chain companies
(58 FR 640, January 6, 1993), the
contractor that conducted the surveys
on behalf of FSIS used various sources
to sample all chains, including Retail
Diagnostics, Inc.’s listing of
supermarkets, Progressive Grocer
Marketing Guidebook, Progressive
Grocer MarketScope, Chain Store Guide
Directory of Supermarkets &
Convenience Store Chains, and the
latest U.S. Economic Census. Moreover,
although the surveys do not report the
number of stores found to be providing
nutrition information on package labels,
the surveys did take this into account.
Retailers were considered to be
participating in the voluntary program
when they provided nutrition
information on nutrition labels or on
point-of-purchase materials, in
accordance with program guidelines, for
at least 90 percent of the major cuts sold
at the facility.
FSIS correctly did not make a
determination of whether there was
significant participation in the
voluntary nutrition labeling program
based on the volume of product for
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which nutrition information was
provided and the number of shoppers
given access to the information. FSIS
regulations clearly provide that a
determination of whether significant
participation in the voluntary nutrition
labeling program existed was to be
based on the percentage of companies
evaluated that were participating in
accordance with the guidelines.
Significant participation would exist if
at least 60 percent of all companies that
were evaluated were participating in
accordance with the guidelines. As is
explained above, the term ‘‘companies,’’
as used in the regulations, refers to
individual stores. The preamble to the
1993 nutrition labeling rule stated,
‘‘FSIS will use a representative sample
of stores to obtain the information
necessary to assess participation’’ (58
FR 640, January 6, 1993). FSIS
developed these regulations through
notice and comment rulemaking, and
FSIS conducted the surveys consistent
with the regulations and the 1993
preamble statement. No comments
received in response to the November
27, 1991, proposed rule on nutrition
labeling stated that significant
participation should be based on the
volume of product covered and the
number of shoppers given access to this
information.
In addition, as FSIS explained in the
preamble to its final nutrition labeling
regulations in 1993, it is important to
provide nutrition information to
consumers and, to the extent possible,
to harmonize with FDA’s voluntary
program for raw fruit, raw vegetables,
and raw fish (58 FR 640, January 6,
1993). Consistent with FSIS’s
regulations, FDA’s regulations provide
that substantial compliance exists with
the guidelines for the voluntary
nutrition labeling for raw fruits,
vegetables, and fish when at least 60
percent of all stores that are evaluated
are in compliance (21 CFR 101.43(c)).
The 1995 survey found that 66.5% of
stores were participating in the
voluntary nutrition labeling program;
the 1996 survey found that 57.5% of
stores were participating; and the 1999
survey found that 54.5% of stores were
participating. Based on the regulations,
stores were found to be participating in
the voluntary nutrition labeling program
if they provided nutrition information
for 90% of the major cuts in their stores.
FSIS recognizes that, given a variance
factor of plus or minus 4%, store
participation could have been 70.5% in
1995, 61.5% in 1996, and 58.5% in
1999. However, even assuming a plus
4% margin of error, the 1999 survey
showed that significant participation
did not exist. Furthermore, given a
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variance factor of 4%, store
participation also could have been
62.5% in 1995, 53.7% in 1996, and
50.8% in 1999. Significantly, the 1999
participation rate was lower than the
1996 participation rate. As a result, FSIS
concluded that it had an obligation
under its regulations to institute this
rulemaking. The Agency did not survey
again after 1999.
Consistent with the regulations, the
surveys assessed whether stores
provided nutrition information for 90%
of major cuts stocked in their stores
(§ 317.343(b) and § 381.443.(b)). In
addition, the surveys assessed whether
stores provided nutrition information
for a lower percentage of such products.
The 1996 survey found that 59.4% of
stores provided nutrition information,
according to voluntary guidelines, for
70% to 90% or more of their major cuts.
Thus, based on the 1996 survey, even if
FSIS includes stores that provided
nutrition information according to the
voluntary guidelines for only 70% of
their major cuts, this percentage of
stores is not quite 60% and, thus, still
does not meet the ‘‘significant
participation’’ criteria in the regulations.
In the 1999 survey, 58.3% of stores
provided nutrition information,
according to the voluntary guidelines,
for 50% to 90% or more of their major
cuts. Again, this percentage of stores is
still not quite 60% and does not meet
the ‘‘significant participation’’ criteria in
the regulations. Based on the 1999
survey, even if FSIS includes stores that
provided nutrition information
according to the voluntary guidelines
for only 50% of their major cuts, FSIS
still would not find 60% participation.
(See Table 7 of the surveys on the FSIS
Web site: https://www.fsis.usda.gov/
Frame/FrameRedirect.asp?main=https://
www.fsis.usda.gov/OPPDE/rdad/
FRPubs/Docs_98-005P.htm).
Comment: One retail industry
association stated that, unamended by a
legislative vehicle comparable to the
Nutrition Labeling and Education Act,
the meat and poultry Acts do not give
USDA the statutory authority to
mandate nutrition labeling regulations
for single-ingredient, raw meat and
poultry products.
Response: FSIS believes that without
nutrition information, the labeling of
major cuts of single-ingredient, raw
meat and poultry products fails to
include material facts about the
consequences of consuming these
products. This information is necessary
for consumers to have if they are to
make educated choices that are
necessary in structuring a healthy diet.
FSIS has concluded that the lack of this
information on the labeling of the major
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cuts causes the labeling of these
products to be misleading. The FMIA
and PPIA provide that a product is
misbranded if its labeling is false or
misleading in any particular (21 U.S.C.
601(n)(1) and 453(h)(1)). Without the
nutrition information for the major cuts
of single-ingredient, raw products that
would be provided if significant
participation in the voluntary nutrition
labeling program existed, the Agency
has concluded that these products
would be misbranded under the FMIA
and the PPIA (21 U.S.C. 601(n)(1) and
453 (h)(1)).
Mandatory Nutrition Labeling for
Ground or Chopped Products
Comment: Many individuals,
consumer organizations, and nutrition
organizations supported mandatory
nutrition labeling on the package for
ground or chopped products. Several
industry associations also supported
these requirements and stated that these
requirements were feasible and
reasonable. One of these associations
also stated that because ground meat
products are formulated to have greater
consistency and uniformity in their
composition than other cuts, retailers
can create a standard, on-package label
that provides accurate, reliable nutrition
information.
Consumer groups noted that several
supermarket chains already include full
nutrition facts labels on their ground
beef products. These commenters
believed that required nutrition labels
for ground or chopped meat and poultry
products would create the most
informative and clear information for
consumers.
Consumer and industry commenters
stated that consumers cannot visually
detect the fat content of ground beef
products, and without on-package
labeling, consumers cannot easily
determine what nutrition information
provided on point-of-purchase materials
would apply to individual packages of
ground products. However, one of the
industry commenters that supported onpackage nutrition labeling had concerns
regarding the economic impact of this
labeling.
Most industry trade associations and
grocer associations did not support onpackage nutrition labeling information
for ground or chopped products. One
industry association stated that the
FMIA and PPIA do not support on-pack
nutrition labels for ground or chopped
products. Another industry association
stated that consumer education
regarding the nutritional qualities of
meat and poultry products, in
conjunction with mandatory point-ofpurchase labeling, would provide
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consumers with sufficient information
for ground or chopped meat and poultry
products. Similarly, a third industry
association supported mandatory
nutrition labeling for ground or chopped
products, provided it could be provided
at their point-of-purchase.
Industry commenters stated that there
is not room on the label of ground
products for a nutrition facts panel. Two
commenters stated that nutrition labels
for ground or chopped products should
be exempt from the current type size
requirements or the labels will be too
large; alternatively, these commenters
suggested that FSIS should allow use of
the linear label format.
Two industry commenters stated that
results from surveys conducted in
March 2001 indicated that the majority
of their members routinely test for fat in
ground beef. However, they believe that
few retailers can determine nutrient or
fat content of ground product blended at
the store. Similarly, several other
industry commenters stated that few
retailers have, or could afford,
equipment to determine the nutritional
content, including fat, for the products
they grind. Therefore, according to these
commenters, mandating nutrition
information on labeling may constrain
small operations, limit the variety of
ground products, and dissuade the
practice of grinding at the request of the
customer. An individual also stated that
the proposed requirements for ground or
chopped products would not be feasible
for small grocers.
One retail industry association stated
that, although retailers can readily
measure the fat content of ground
product, establishing the exact nutrient
profiles on a daily basis would not be
feasible. According to this commenter, if
products were analyzed, they would no
longer be salable by the time analytical
results became available. Another retail
industry association stated that some
retail stores have access to fat content by
using a fat analyzer when doing in-store
grinding of meat or poultry products;
however, testing for additional nutrient
content would require the use of a
laboratory and would prove costly.
Another industry commenter stated that
large, centrally processed ground
products can be formulated to precise
fat contents, but many ground products
produced in retail settings cannot.
Two industry associations supported
the required nutrition labels on ground
or chopped products that are ‘‘caseready’’ but not for products prepared
and packaged at retail. Like other
industry commenters summarized
above, these commenters stated that
retailers do not have the equipment
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necessary to determine the finished
product’s nutrient content.
Two associations stated that most
consumers purchase ground products
based on percent lean, the cut, or the
cost of product, rather than based on the
other nutrient content information.
Another association stated that
according to survey data, 45% of
consumers choose ground beef based on
price, 23% based on cut, and 9% based
on fat content.
Response: Should this rule become
final, FSIS will require on-package
nutrition information for these products
rather than allowing nutrition
information to be provided at their
point-of-purchase for the reasons stated
in the proposed rule. Because there are
numerous formulations of ground or
chopped products, it would be difficult
for producers or retailers to develop
point-of-purchase materials that would
address all the different formulations
that exist for these products.
Furthermore, it would be difficult for
consumers to find the correct
information for a specific ground or
chopped product on point-of-purchase
materials that include information
concerning numerous formulations of
these products (66 FR 4977, January 18,
2001). If a statement of the fat
percentage and lean percentage is not
included on a package of ground
product, consumers would not know
which nutrient data concerning ground
product on point-of-purchase materials
would apply to that particular ground
product. Establishments and retailers
are not currently required to provide
such a statement and will not be
required to provide such a statement
when this rule becomes effective.
The FMIA and PPIA do support onpackage nutrition labels for ground or
chopped products. The FMIA and PPIA
provide that a product is misbranded if
its labeling is false or misleading in any
particular. FSIS has concluded that
ground or chopped meat and poultry
products that do not bear nutrition
information would be misbranded
under 21 U.S.C. 601(n)(1) and 453(h)(1).
Information concerning the nutritional
qualities of ground or chopped meat and
poultry products is particularly
important because these products,
especially ground beef, are widely
consumed. Pertinent nutritional
information is integral to consumer
purchase decisions because use of this
information may result in the
prevention of health problems and the
reduction of health risks for some
consumers. Additional information
about the nutrient values of ground or
chopped meat and poultry products
would enable consumers to make
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informed decisions about including
these products in their diets and will,
therefore, help consumers to construct
healthy diets.
Thus, consistent with the
recommendations from individuals,
consumer organizations, and some
industry comments, should it become
final, this rule will require nutrition
labels on all ground or chopped meat
and poultry products, with or without
added seasonings, unless an exemption
applies. The rule will also require
nutrition labels on packages of singleingredient, raw ground or chopped
products, rather than at their point-ofpurchase. These products are similar to
multi-ingredient products in the
mandatory nutrition labeling program
(which requires nutrition information to
be on the label of individual packages).
Just as producers can control the
incoming ingredients and levels of such
ingredients in multi-ingredient
products, producers can precisely
control the fat content of ground or
chopped products to obtain the desired
product. In addition, just as consumers
cannot often see all the ingredients in
multi-ingredient products, consumers
cannot easily see the fat in ground or
chopped products. The fat is uniformly
distributed throughout the product and
is not clearly distinguishable on the
surface of the product. Therefore,
consumers cannot estimate the fat levels
in these products and cannot compare
the fat levels in these products to those
in other products. Thus, it is difficult for
consumers to have a reasonable
expectation of the nutritional quality of
these products.
Many grocers and manufacturers
currently provide nutrition facts panels
on ground beef products; therefore, FSIS
questions why certain commenters
stated that there is not sufficient room
on the label of these products for
nutrition information. In addition, FSIS
continues to believe that, unlike other
single-ingredient, raw products,
producers are able to formulate
precisely the fat content of ground or
chopped products. If, as some
commenters suggested, grocers cannot
determine the fat percentage in ground
or chopped beef produced at retail, FSIS
questions how they can be certain they
produce product that meets the standard
of identity for ground or chopped beef,
which requires that the product not
exceed 30 percent fat (see § 319.15).
Information on ground beef products
containing 5%, 10%, 15%, 20%, and
25% fat is available through ARS at the
following Internet address: https://
www.ars.usda.gov\nutrientdata. In
addition, ARS has included a calculator
on the Internet, with the Database, that
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allows parties to enter the amount of fat
(5% to 30% fat) or lean (70% to 95%
lean) in a raw ground beef product. The
calculator will calculate the nutrient
values for the product based on the fat
or lean value entered. If retailers are
able to determine the fat content, as two
industry commenters suggested they
could, they can use the ARS nutrient
database to obtain the information
necessary to help them determine other
nutrient values in the product.
Additionally, the nutrition labeling
requirements for ground or chopped
products should not be particularly
difficult for small operations, since
ground or chopped product produced
by retail establishments and Federal
establishments that meet specific small
business criteria will be exempt from
nutrition labeling requirements
(§§ 317.400(a)(1) and 381.500(a)(1)).
Moreover, a new exemption from the
nutrition labeling requirements, that is
provided in this supplemental proposed
rule, should alleviate any concerns that
nutrition labeling requirements will
discourage retailers from grinding
product based on customers’ requests.
Should it become final, the rule will
provide an exemption from nutrition
labeling requirements for ground or
chopped products that are ground or
chopped at an individual customer’s
request and that are prepared and
served or sold at retail, provided that
the labels or labeling of these products
bear no nutrition claims or nutrition
information.
If an individual customer selects an
intact product for purchase and requests
that the product be ground at the retail
facility, FSIS has determined that
nutrition information on the package of
the ground product would not be
necessary. In this instance, the customer
has made the decision to purchase the
product before it was ground. The
customer is not selecting the product
from among various, formulated, ground
or chopped product, and thus the
reasons for requiring a nutrition label on
such a product would not be applicable
here.
Comment: One animal protection
organization stated that the nutrition
information should be presented on an
‘‘as packaged’’ basis for ground or
chopped meat and poultry products,
and that ‘‘as consumed’’ information
should be in addition to, not instead of,
‘‘as packaged’’ information. No
commenters suggested that ‘‘as
consumed’’ information alone was
adequate.
Response: FSIS agrees with the
commenter. Should it become final, the
rule will require, as proposed, that
nutrition information on the labels of
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ground or chopped products be
presented on an ‘‘as packaged’’ or ‘‘raw’’
basis. Although not required, a second
column can be added to show nutrition
information on the product on an ‘‘as
consumed’’ or ‘‘cooked’’ basis. The
regulations provide that if a product is
commonly combined with other
ingredients or cooked before eating, and
directions for such combinations or
preparations are provided, another
column with nutrition information may
be used (9 CFR §§ 317.309(b)(15) and (e)
and 381.409(b)(15) and (e). Therefore,
the nutrition information required on
packages of ground or chopped products
will be consistent with the information
required on multi-ingredient and heat
processed products. FSIS requests
further comment on this issue.
Comment: FSIS did not receive any
comments on how much meat derived
from advanced meat/bone separation
and recovery (AMR) systems or how
much low temperature rendered
product is currently being used in
ground or chopped products. However,
an industry organization stated that the
use of product from AMR systems in
ground beef products would not cause
a dramatic change in the nutrient
content of the product such that it
would be misleading to consumers. The
commenter noted that, based on the data
FSIS presented (see 66 FR 4976, January
18, 2001), the level of cholesterol in
product containing meat from AMR
systems is slightly elevated, and the
level of iron in the product is above 20
percent of the value of iron product not
containing meat from AMR systems.
However, according to the commenter,
the studies were not performed in a
compliance context, and FSIS did not
provide information concerning the
historical levels of iron or other
information that would shed light on
whether the difference accords with
good manufacturing practices.
Response: FSIS presented information
concerning ground beef with AMR
product for illustrative purposes only.
The data show an increase in the level
of calcium over what would occur if
good manufacturing practices were
used. Similarly, iron levels in ground
beef that includes AMR product may be
higher than those in ground beef that
does not include AMR product.
In meetings with FSIS, representatives
of the meat industry have stated that the
percentage of ground beef with AMR
product and the level of AMR product
in ground beef is higher than FSIS
previously thought. FSIS continues to
believe that one of the reasons nutrition
information on the labels of ground or
chopped meat products is important is
because producers may use product
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from AMR systems in some of these
products, and the use of AMR product
can affect the nutrient values of these
products. Finally, even though FSIS
issued an interim final rule on AMR that
provides specific restrictions on the
levels of calcium and iron in AMR
product (69 FR 1874, January 12, 2004),
nutrition labeling of ground products
that may contain AMR product is
necessary to understand the nutritional
profile of the food.
Comment: FSIS received few
comments regarding consumer
expectations of the fat content of ground
products. One industry commenter
stated that consumers do not have
reasonable expectations of the nutrient
content of ground products given the
wide variation of fat and lean content.
Response: FSIS agrees that consumers
do not have reasonable expectations of
the nutrient content of ground or
chopped products. Unlike whole muscle
product, most consumers cannot
visually discern which ground or
chopped products have less fat, and
which products have more fat, because
the fat is ground in with the lean
portion. In addition, producers may use
meat from AMR systems and low
temperature rendering in ground or
chopped beef and pork products, which
may affect the variability of these
products.
No Requirements for Nonmajor Cuts
Comment: Several industry groups
supported the proposal not to require
nutrition labeling on nonmajor cuts that
are not ground or chopped (e.g., pork
jowls, pigs feet, pork leg, pork shoulder
picnic, and beef round rump) and did
not believe such labeling was needed in
the future. Two industry commenters
stated that when grades and trim levels
are considered, there are over 3300 cuts
of red meat products, and it would be
impossible to provide information on
this number of products.
One industry group also indicated
that the major cuts identified by the
nutrition labeling regulations are still
relevant today as representing the
greatest share of fresh meat
consumption, thus suggesting that it is
more important that nutrition
information be provided for these
products than for the nonmajor cuts of
single-ingredient, raw products.
As discussed above, the majority of
comments from individuals, consumer
groups, and health organizations stated
that FSIS should require on-package
nutrition labeling for all single
ingredient, raw meat and poultry
products (major and nonmajor cuts). An
animal protection organization
recommended that FSIS take no more
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than 24 months to investigate whether
required nutrition labeling for singleingredient, nonmajor cuts that are not
ground or chopped is warranted.
Response: At this time, FSIS does not
intend to require that nutrition
information be provided for nonmajor
cuts of single-ingredient, raw products
that are not ground or chopped. FSIS
has determined that it is not appropriate
or necessary to require nutrition
information for nonmajor cuts that are
not ground or chopped at this time.
They do not contribute in a major way
to the diet. FSIS stated in the proposed
rule that it intended to examine the
current state of nutrition labeling for
single-ingredient, raw products that are
not ground or chopped and that are not
major cuts (66 FR 4974, January 18,
2001). FSIS still intends to conduct this
assessment but has not yet been able to
do so because of competing priorities.
Should this rule become effective, FSIS
will examine and assess the adequacy of
the nutrition information provided for
the major cuts and will also determine
whether sufficient nutrition information
is being made available for the nonmajor
cuts.
Permitting Percent Lean Statements on
Labels or in Labeling of Ground or
Chopped Products
Comment: Individuals and consumer
and nutrition organizations generally
did not support the use of statements of
lean percentages on the label or in
labeling of ground or chopped products
that do not meet the regulatory criteria
for ‘‘low fat.’’ A coalition of consumer
and health and nutrition organizations
stated that permitting such claims on
packages of ground meat and poultry is
inherently deceptive and will confuse
consumers about the healthfulness of
fresh ground meat and poultry products
compared to other fresh meat, processed
meat, and other foods. This coalition
and an individual stated that a
statement of fat percentage without a
statement of lean percentage would be
an effective means of allowing
consumer comparison of ground
products. Similarly, a medical school
stated that, instead of a statement of
‘‘lean’’ on ground or chopped products,
labeling of ground or chopped products
should list the actual amount of fat in
terms of ‘‘x% fat or less.’’
One medical organization suggested
that instead of a statement of lean
percentage as a quick reference, FSIS
should allow a ‘‘percent calories from
fat’’ statement on labeling of ground or
chopped products. According to this
commenter, this statement would allow
comparisons among ground products
and would also allow a comparison of
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the amount of fat in the product to the
daily amount of fat recommended in
USDA dietary guidelines and the daily
amount of fat recommended by other
health associations.
One animal protection organization
suggested that the use of percent lean
statements is highly misleading since
‘‘percent lean’’ refers to percent by
weight not percent of calories.
As a better means to compare ground
products than a statement of the
percentage fat and percentage lean in
the product, one consumer organization
noted that many packages of ground
meat or poultry would meet the
regulatory criteria for ‘‘reduced fat,’’
‘‘light,’’ and ‘‘lower fat’’ nutrient content
claims. This organization stated that
such claims are now familiar to
consumers, and that the use of such
claims would ensure uniformity across
product categories and reduce consumer
confusion.
In contrast, an industry association
did not support ‘‘reduced fat’’ labeling
on ground products because, according
to the commenter, it would penalize
retailers who offer only the leanest
products and do not offer those with
higher fat content. In addition, the
commenter believed that ‘‘reduced fat’’
labeling would be confusing to
consumers who understand and have
come to rely on the percentage fat and
lean statements that are currently in use.
Two poultry industry associations did
not support the provision for statements
of lean percentages on ground or
chopped products that do not meet the
regulatory criteria for ‘‘low fat.’’ These
associations stated that allowing the use
of a statement of lean percentage on
ground product that does not meet the
regulatory criteria for ‘‘low fat’’ would
be misleading, and that there is no basis
for exempting ground product from the
regulatory criteria for ‘‘low fat’’ that
normally applies to product labeled
‘‘lean’’ (see §§ 317.362(e)(1) and (2) and
381.462(e)(1) and (2)).
The majority of industry associations
supported the use of a statement of lean
percentage on the label or in labeling of
ground products that do not meet the
regulatory criteria for ‘‘low fat.’’ They
believed that the statement of lean
percentage on ground beef products is
not misleading and is a useful tool for
consumers. Several commenters
discussed telephone surveys whose
findings indicated that the statement of
lean percentage does not mislead
consumers. The commenters stated that
these surveys indicated that many
consumers use the statements of lean
and fat percentages as a basis for
selecting ground beef products, and that
most consumers understand that the
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statement of fat percentage indicates the
percentage of fat in the product, not the
grams of fat, percent Daily Value, or
percent of calories from fat. Several
industry associations stated that the
percent lean and percent fat statements,
in combination with the nutrition facts
panel, will benefit consumers and allow
consumers to quickly differentiate
among ground products and determine
how a serving of ground product fits
into their overall diet.
One industry group recommended
that FSIS consider allowing retailers to
make a statement such as ‘‘not more
than 25% fat’’ for a 75% lean/25% fat
ground beef product, and one industry
commenter recommended a tolerance
for percentage content statements
comparable to the tolerance allowed for
nutrient value variations.
Response: The supplemental
proposed regulations would permit a
statement of lean percentage on the
label or in labeling of ground or
chopped meat and poultry products that
do not meet the regulatory criteria for
‘‘low fat.’’ The regulations would
require that a statement of fat percentage
be contiguous to, in lettering of the same
color, size, and type as, and on the same
color background as, the statement of
lean percentage.
Although individuals, consumer
commenters and nutrition organizations
generally did not support this provision,
most industry commenters did. Industry
commenters presented information from
consumer surveys that showed that
consumers understood the meaning of
statements of lean and fat percentages
on ground beef. Based on the survey
information provided, interested
consumers use this information as a
quick way to compare ground beef
products and as a means for ensuring
the desired product is purchased.
Additionally, based on the survey
information discussed in the comments,
consumers appear to understand that
the percent lean statements simply
indicate the percentage of lean versus
fat in the products and do not interpret
the information as a percent daily value
(%DV) or percent of calories from fat in
the product.
Producers, according to industry,
have been using lean percentage
statements on the labeling of ground
beef and hamburger products for over 20
years (59 FR 26917, May 24, 1994).
Because the percent fat statement must
be contiguous to the percent lean
statement and must be in lettering of the
same color, size, and type as, and on the
same color background as, the lean
percentage statement, FSIS believes that
the percent lean statements will not
mislead consumers.
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As the coalition and individual
commenter suggested, producers may
include a percent fat statement on the
label or in labeling of ground products
without including a percent lean
statement, because a percent fat
statement is factual information. A
percent fat statement on ground or
chopped products would be an
acceptable alternative to a statement of
lean and fat percentage. However,
because of the longstanding use of the
statements of percent fat and percent
lean on the label or in labeling of
ground beef and hamburger products,
FSIS believes such statements on the
label or in labeling of ground products
will not mislead consumers.
As the consumer organization noted,
ground or chopped products may meet
the regulatory criteria for ‘‘reduced fat’’
or for ‘‘light.’’ The provisions for the
statement of percent fat and percent
lean in ground or chopped products will
not preclude producers from using
‘‘reduced fat,’’ ‘‘light,’’ and other
nutrient content claims.
In response to the suggestion that
FSIS allow a ‘‘percent calories from fat,’’
FSIS already allows such a statement
because it is factual information.
The current regulations do not
preclude the use of the phrases ‘‘x% fat
or less’’ or ‘‘not more than x% fat’’ on
the labeling of ground or chopped
product. The problem with the
suggested alternative of listing the
actual amount of fat in terms of ‘‘x% fat
or less’’ or allowing statements such as
‘‘not more than 25% fat,’’ is that these
statements are implied claims as
defined by § 317.369 for red meat and
§ 381.469 for poultry products. In order
to use the implied claim, ground
products would need to meet one of the
definitions for a nutrient content claim
for fat content in § 317.362(b)(2) or (4)
or § 381.462(b)(2) or (4). According to
these regulations, to use such phrases,
the product would have to be ‘‘low fat,’’
and most ground beef and hamburger do
not qualify as ‘‘low fat.’’ Alternatively,
the product would have to qualify as
having ‘‘reduced fat’’ and would need to
meet a 25% reduction in fat compared
to a similar product.
Finally, in response to the industry
suggestion that FSIS provide a tolerance
for percentage content statements
comparable to the tolerance allowed for
nutrient value variations, the same
tolerances allowed for nutrient value
variations (317.309(h)(5) and (6) and
381.409(h)(5) and (6)) would apply to
the statements of the percentages of lean
and fat in the product, because these
statements are based on information in
the nutrition facts panel.
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Exemptions for Nutrition Labeling
Comment: Two industry organizations
stated that there should be a small
business exemption from the nutrition
labeling requirements for the major cuts.
They argued that the Agency’s stated
rationale for not providing a small
business exemption for these products
(i.e., that FSIS intends to make point-ofpurchase materials available over the
Internet free of charge) shows a lack of
understanding of the challenges faced
by small businesses and the economic
hardships that the regulation imposes.
These commenters stated that many
small businesses do not have Internet
access. Additionally, according to these
commenters, small stores may not have
space available to post the point-ofpurchase materials.
Response: If retailers cannot obtain
the point-of-purchase materials over the
Internet, should this rule become final,
FSIS personnel will have copies of the
information to provide to retailers.
Furthermore, the regulations will
provide flexibility in regard to the
manner in which the required
presentation and posting of nutrition
information for the major cuts must be
done, so that all retailers should be able
to post the information or have it
available to consumers without using
much space. For example, posters with
nutrition information could be on walls
near the products, or brochures or
leaflets could be placed in a box near
the products.
Comment: One animal protection
organization did not support the small
business exemption from nutrition
labeling requirements for ground or
chopped products. This commenter
stated that the exemption could create a
significant information gap in small
towns and rural areas where large chain
retail and grocery stores do not have a
presence. Similarly, an individual stated
that there should be no exemptions from
the nutrition labeling requirements.
One industry group stated that ground
or chopped products with or without
seasonings, processed or packaged at
retail must continue to be exempt from
nutrition labeling requirements. This
commenter stated that the quantity of
ground products actually prepared at
retail represents a small portion of the
average diet.
Two industry commenters stated that
FSIS should allow an exemption for
ground or chopped products that are
custom processed. They stated that
when a retailer is only providing a
service, not a food product, the retailer
should not be expected to bear the cost
of providing nutrition information,
especially in rural areas where families
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raise their own animals and have a local
meat market or supermarket provide the
cutting and grinding service.
Response: FSIS believes that a small
business exemption from nutrition
labeling requirements is necessary for
ground products, with or without
seasoning. As explained in the proposed
rule, small businesses should be exempt
from mandatory nutrition labeling
requirements for ground or chopped
products because these requirements
would create undue economic hardship
for small businesses and would create
disincentives for these small businesses
to develop more nutritious food
products (66 FR 4978, January 18, 2001).
Therefore, should this rule become
final, it will provide a small business
exemption for ground or chopped
products produced by retail facilities or
official establishments that qualify for
the exemption.
Should this rule become final, to
qualify for the exemption, a retail store
will either need to be a single retail
store that employs 500 or fewer people
or a multi-retail store operation that
employs 500 or fewer people and will
need to produce no more than 100,000
pounds of each ground product per
year. For an official establishment to
qualify for the exemption, it will need
to be either a single-plant facility that
employs 500 or fewer people, or a multiplant company/firm that employs 500 or
fewer people and will need to produce
no more than 100,000 pounds per year
of each ground product. As explained in
the preamble to the proposed rule,
ground or chopped products formulated
to have different levels of fat would be
considered different food products for
the purposes of the small business
exemption (66 FR 4978, January 18,
2001).
Should this rule become final, readyto-eat ground or chopped products
packaged or portioned at retail stores
and similar retail-type establishments,
and multi-ingredient ground or chopped
products processed at retail stores and
similar retail-type establishments, will
be required to bear nutrition labels,
unless the retail store or similar retailtype establishment qualifies for the
small business exemption. Because a
significant amount of ground beef is
processed at retail, the Agency believes
that there may be a significant amount
of multi-ingredient ground beef retail
processed products or ready-to-eat retail
packaged products.
The Economics Research Service
determined that ground beef accounted
for 42 percent of all beef (boneless,
trimmed-weight equivalent) consumed
in 1996 (Putnam, Judy and Gerrior,
Shirly, ‘‘Americans Consuming More
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Grains and Vegetables, Less Saturated
Fat, Food Review, Sept.–Dec., 1997, Vol.
20, Issue 3, pp. 2–12), and, as explained
in the preamble to the proposed rule,
most ground beef, traditionally, has
been ground and packaged at retail (66
FR 4978, January 18, 2001). Therefore,
ground beef products actually prepared
at retail may represent a significant
portion of beef consumed in the average
diet.
When butchers custom grind product
for customers, this product is
considered a custom prepared product,
and as such, this product will continue
to qualify for an exemption from
nutrition labeling requirements, should
this rule become final.
Comment: One retail association and
one consultant believed that the small
business exemption for ground or
chopped products should be phased in,
in a manner similar to the way the small
business exemption was phased in for
nutrition labeling requirements in the
1993 FSIS final rule on nutrition
labeling.
Response: FSIS disagrees with these
commenters. Should this rule become
final, the nutrition labeling
requirements for ground or chopped
meat and poultry products will apply to
a much smaller number of products
than the number of products subject to
the 1993 final regulations on nutrition
labeling. At this time, many businesses
are familiar with nutrition labeling
requirements; that was not the case in
1993. Therefore, as explained in the
supplemental PRIA cost analysis, FSIS
believes that it will not be costly for
companies to add nutrition labels to
packages of ground or chopped
products.
Furthermore, many of the suppliers of
coarse ground products that are then
ground and packaged at retail have
supplied, or can supply, the nutrition
facts panels for the retailers. Most
retailers offer a limited selection of
ground beef products. Thus, dozens of
different nutrition labels for each
retailer will not be necessary. In
addition, information for ground beef
and other products is available through
the National Nutrient Database for
Standard Reference. In addition, should
this rule become effective, the
requirements for on-package nutrition
labeling for ground or chopped products
will not be effective until January 1,
2012.
Comment: Two industry commenters
supported the continued exemption for
multi-ingredient sausage products
produced at retail. They stated that
retail constraints in determining
nutrient content support the
continuation of the exemption. One
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commenter asserted that the final
regulation should specify that the
provisions for ground or chopped
products apply to product labeled as
‘‘hamburger, (species or kind) burger or
ground or chopped (species or kind)’’ in
order to differentiate such products
from sausage products (ground meat
with seasonings). This commenter
stated that some parties might believe
that the provisions for ground product
apply to sausage products manufactured
at retail.
Response: Nutrition information for
sausage products are not covered by this
regulation. Nutrition labeling
requirements for these products were
previously addressed in the 1993
nutrition labeling rule. Sausage, meat
loaf, or beef patty mix are typically
multi-ingredient products that are
required to bear nutrition labeling,
unless they qualify for an exemption,
and multi-ingredient sausage products
processed at retail will continue to be
exempt from nutrition labeling
requirements under § 317.400(a)(7)(ii)
and § 381.500(b)(7)(ii). Because there is
a standard of composition for ground or
chopped beef (§ 319.15) and distinct
standards of identity for sausage
products, industry generally
understands which products are
referred to and labeled ‘‘ground or
chopped products’’ and which products
are referred to and labeled ‘‘sausage
products.’’
In the 1993 final rule on nutrition
labeling, FSIS exempted from
mandatory nutrition labeling
requirements multi-ingredient products
processed at retail and ready-to-eat
products packaged or portioned at retail.
Therefore, multi-ingredient sausages
processed at retail and ready-to-eat
sausages packaged or portioned at retail
are exempt from nutrition labeling
requirements. The reasons that FSIS
provided these exemptions in the 1993
final rule were that FSIS believed that
it would be impractical to enforce
nutrition labeling requirements on these
products prepared or served at retail
and because the Agency concluded,
based on a review of National Food
Consumption Survey (NFCS) data, that
the average person’s diet consisted of an
insignificant proportion of ready-to-eat
retail packaged products or retail
processed products (58 FR 639, January
6, 1993).
Should this rule become final, FSIS
will not exempt ready-to-eat ground or
chopped products packaged or
portioned at retail or multi-ingredient
ground or chopped products that are
processed at retail because, as FSIS
explained in the 2001 nutrition labeling
proposed rule, there may be a
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significant amount of multi-ingredient
ground beef retail processed products or
ready-to-eat retail packaged products.
Also, FSIS no longer believes
enforcement of nutrition labeling
requirements at retail stores to be
impractical because FSIS is already
conducting testing for Escherichia coli
O157:H7 at retail (66 FR 4979, January
18, 2001).
Enforcement & Compliance
Comment: One retail association
stated that FSIS should include in the
regulations provisions comparable to
those in the Nutrition and Labeling
Education Act (NLEA) such that
retailers would not be subject to
substantial civil and criminal penalties
for violations of the nutrition labeling
requirements. This commenter was
concerned that, if the USDA requires
nutrition labeling for the major cuts,
retailers could be penalized for minor
violations of these regulations. For
example, the commenter suggested that
if a poster providing nutrition labeling
information falls down, the retailer
could suffer substantial penalties.
This commenter also asserted that,
with regard to FSIS product sampling
and nutrient analysis, FSIS should
continue to treat single-ingredient, raw
ground products in the same manner it
treats other single-ingredient, raw
products. Therefore, the commenter
stated, FSIS should not sample raw,
ground products for which USDA data
are used as the basis for the nutrition
information on the label. Further, the
commenter stated that if FSIS conducts
sampling of ground products at retail for
nutrient analysis, the ground products
should only be analyzed for fat content.
According to this commenter, once FSIS
verifies the fat content of ground
products, products labeled with
corresponding USDA data values should
not be subject to further compliance and
enforcement.
An animal protection organization
stated that ground products should be
subject to nutrient analysis. This
commenter stated that the USDA
National Nutrient Database for Standard
Reference includes only a limited
number of ground products, and there
are many others available on the market.
According to this commenter, FSIS
employees cannot, and should not be
expected to, visually assess the product
and compare it against its label.
Response: Products under FSIS
jurisdiction are not subject to the NLEA.
Nonetheless, FSIS does not consider it
likely that substantial criminal penalties
could be imposed for significant
violations of the nutrition labeling
requirements. FSIS stated in the
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preamble to the final January 6, 1993,
nutrition labeling rule that it is not the
Agency’s intent to proceed in a punitive
manner when problems surface during
compliance monitoring (58 FR 657,
January 6, 1993). Should this rule
become final, FSIS will likely seek
criminal penalties for violations of the
nutrition labeling requirements in the
same types of circumstances as it would
for other labeling violations of the FMIA
and PPIA. Consistent with its approach
to enforcing existing nutrition labeling
requirements, under this rule, if FSIS
finds nutrition information on product
labels that, based on FSIS or USDA data,
is inaccurate, FSIS would contact the
company and request that it either
correct the information on the label or
provide adequate justification to
support the information. If the company
failed to do so, FSIS would likely issue
a letter of warning.
FSIS is authorized to issue letters of
warning in lieu of seeking criminal
penalties when the Secretary of
Agriculture determines the public
interest will be adequately served by a
letter of warning. If the company
continued to use the inaccurate label,
FSIS could institute an administrative
process to rescind the label approval
under 9 CFR § 500.8 and could seize any
product in commerce because it is
misbranded. However, FSIS considers it
highly unlikely that companies will
continue to use inaccurate labels after
FSIS has contacted them because
introducing misbranded product in
commerce is a prohibited act under 21
U.S.C. 610 and 458. FSIS is not
authorized to impose civil penalties
under the FMIA or PPIA.
With regard to FSIS product sampling
and nutrient analysis of ground
products, as FSIS stated in the preamble
to the proposal, the fat content of
different ground or chopped products
can vary significantly, depending upon
the level of fat in the product being
ground and depending on whether
product from AMR systems is used (66
FR 4980, January 18, 2001). Therefore,
the procedures set forth for FSIS
product sampling and nutrient analysis
in §§ 317.309(h)(1)–(8) and
381.409(h)(1)–(8) would be applicable to
ground or chopped meat and to ground
or chopped poultry products,
respectively. Should this rule become
final, FSIS will not analyze ground or
chopped products for fat only, because
if the ground product includes AMR
product or product from low
temperature rendering (e.g., finely
textured beef or lean finely textured
beef), the use of these materials could
affect the nutrient values in the product.
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With regard to FSIS product sampling
and nutrient analysis, FSIS will not treat
single-ingredient, raw ground or
chopped products in the same manner
that it treats other single-ingredient, raw
products primarily because, as
explained in the proposed rule, FSIS
program employees cannot visually
assess whether nutrition information on
the label of ground or chopped products
accurately reflects the labeled products’
content. In most cases, it is not possible
to visually assess the level of fat in a
ground product. For example, FSIS
program employees cannot visually
determine whether product that is
labeled 17 percent fat ground beef is
actually 17 percent fat ground beef as
opposed to 27 percent fat (or another
percentage of fat) ground beef (66 FR
4980, January 18, 2001). Therefore,
should this rule become final, FSIS will
sample and conduct nutrient analysis of
ground or chopped products to verify
compliance with nutrition labeling
requirements, even if nutrition labeling
on these products is based on the most
current representative data base values
contained in USDA’s National Nutrient
Data Bank or the USDA National
Nutrient Database for Standard
Reference and there are no claims on the
labeling. Therefore, FSIS will treat
ground or chopped products as it treats
all other products for which the
regulations require nutrition
information on their package. In the
event that FSIS samples and conducts
nutrient analysis of ground or chopped
beef, if producers know the fat content
of their product and have used USDA
database values on the nutrition labels,
FSIS would find the product’s label in
compliance with nutrition labeling
requirements, provided the product’s
source materials did not include AMR
product or product from low
temperature rendering.
Costs and Benefits
Comment: Many commenters stated
that the proposed rule would result in
increased label costs. For example, one
individual stated that it would cost a
little more for production but did not
think that it would affect the profit of
major meat companies. Another
individual stated that the rule would
increase the final price of the product
and require a change in packaging.
A small retailer who carries 26
different packages of ground meat in
their stores and packages 6,000 packages
per week stated that it would cost the
company more than $22,600 a year in
added costs due to labor and the
additional labels that would be needed.
Another small retailer estimated that the
cost would approach $10,000 annually
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for adding a new poster and taking into
account the necessary packaging, labor,
and machinery modifications for ground
or chopped products.
A beef producer believed that FSIS’s
cost estimates for requiring nutrition
labeling for ground or chopped products
are too low. This commenter stated that
for those producers that must supply
their own labels, the cost would be
prohibitive. According to this
commenter, if retail stores were to
provide the information, the costs
would be as calculated in the proposed
rule. This commenter also believed that
FSIS could still achieve its goal of
having a large percent of compliance by
making information on the label
optional for certain groups that would
be financially burdened. This
commenter noted that FSIS estimated
that the average weight of packages of
ground or chopped products is 2
pounds and stated that the average
weight of a package of pasture fed
ground beef is between one and 1.5
pounds.
An animal protection organization
contacted a major commercial
laboratory that conducts nutrient
analysis. This commenter stated that the
laboratory charges $130 for a single
sample analysis for total fat and
saturated fat and $85 for cholesterol.
The laboratory gives volume discounts
for multiple samples.
According to an industry association
commenter, the majority of retailers do
not have equipment, such as a Fat-OMeter or CEM analyzer, to determine the
exact nutritional content, including the
percentage of fat for their products. It is
unlikely, according to this commenter,
that retailers will be able to afford this
type of equipment because it costs
nearly $40,000.
A retail industry organization stated
that according to Hobart, the company
that manufacturers a large proportion of
the scales used by retailers, 50 to 60
percent of supermarkets would need to
upgrade their current printers, which
represents $45 to $75 million in costs.
Also, 40 to 50 percent of supermarkets
would be required to replace their entire
scale systems at the store level, which
Hobart estimates would cost $54 to $90
million. In addition, according to this
commenter, substantially more
sophisticated and more expensive
analytical equipment or laboratory
testing will be needed to measure the
nutrient profiles in ground products,
which are likely to vary significantly in
the context of USDA’s compliance and
enforcement standards.
Another retail industry association
stated that a distributing company
supplying 200 supermarkets estimated
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that the labeling requirement for ground
or chopped products would affect over
20 million packages annually. Using the
FSIS estimate of .005 cents per label, the
labels alone would cost $100,000 per
year. In addition, this commenter stated
that although retail stores may be able
to assess fat content by using a fat
analyzer when doing in-store grinding,
testing for nutrient content would
require the use of a laboratory and prove
costly. The commenter stated that these
costs would cause many retailers that
provide on-site custom service to
increase prices or sell case-ready meat
only, to the detriment of consumer
choice.
Two individuals were concerned that
the proposed rule would increase the
price of meat; one stated that if people
wanted nutrition information for meat
and poultry products, stores would
already provide the information on the
packages.
In terms of the overall costs and
benefits of compliance, an animal
protection organization stated that, if
the analyses and costs estimated by
FSIS are accurate, it is evident that
consumers need more information than
they are currently getting. The
commenter further stated that the costs
to industry are negligible when
compared to the benefits to the
consumer.
An industry association stated that
FSIS will also incur costs. According to
this commenter, if the Agency requires
on-package labeling for ground product,
to verify compliance, it will be diverting
a significant portion of its resources to
the chemical analysis of numerous
ground products produced at retail
levels across the United States. The
commenter also stated that, while FSIS
has increased its level of sampling at the
retail level for the purpose of
microbiological sampling of E. coli
O157:H7, it should also be able to
collect additional samples for chemical
analysis simultaneously. However, the
commenter stated that FSIS would also
be incurring new costs associated with
sending samples to the laboratories as
well as the actual cost of the analyses.
Response: FSIS recognized that the
proposal, like many regulations
promulgated by various government
entities, would result in increased costs
to various affected parties, so it is not
surprising to FSIS that commenters
would indicate that they would incur
increased compliance costs. The
commenter who stated that the rule
would cost it $22,464 annually also
stated that it produces 6,000 packages of
ground beef per week or 312,000
packages per year. This equates to a per
label cost of 7.2 cents. Another
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commenter who said it would cost them
$10,000 annually also said that they sell
100,000 packages annually. This equates
to a per label cost of ten cents. Both
estimates are significantly higher than
any estimate prepared by FSIS. The
Agency does not doubt that these
retailers may incur higher labeling costs
should this rule become final, but FSIS
is unsure how their estimates were
prepared. For example, FSIS is unsure
as to whether these estimates include
certain costs that should or should not
be attributed to the proposal. At this
time, the Agency is not in the position
to accept these estimates as being
comparable (in methodology or
assumptions) to the costs presented by
FSIS. As explained in the supplemental
PRIA, FSIS estimates that retailers
would incur the costs of upgrading store
scales and printers to include nutrition
information, redesigning larger store
labels, providing nutrition analysis for
each product, and using larger labels.
The Agency has reviewed the
concerns of the beef producer but, with
the limited supporting information
provided, finds that the commenter’s
concerns are unconvincing. At no time
does the commenter indicate what its
costs might be, so it is difficult to
determine how burdensome the
requirements are for this producer.
The beef producer stated that the
average weight of a package of pasture
fed ground beef is between one and 1.5
pounds. However, in the supplemental
PRIA cost analysis, FSIS estimates that
the average weight of a retail package is
2.7 pounds (ranging from 1.7 pounds at
the 5th percentile, to 4.35 at the 95th
percentile). This estimate is from the
National Cattlemen’s Beef Association
(NCBA), and FSIS believes this estimate
better reflects the average weight of a
retail package of ground product than
the figure the commenter provided for
pasture fed ground beef. NCBA’s source
is the Meat Purchase Diary, which is a
survey. Although FSIS believes that
NCBA data provide a sound estimate of
the average weight of a retail package of
ground product, there is some
uncertainty in this estimate, because
NCBA does not release any detailed data
from its survey.
With regard to the comments on the
cost of samples and nutrient analysis,
the supplemental PRIA cost analysis
includes costs of nutrition analysis
ranging from $599 to $787 per modified
label. These are costs required to create
a nutrition facts panel. As explained in
the cost analysis below, FSIS does not
believe that the cost of a fat analyzer
should be attributed to this rule. Stores
may receive product for which a fat
analysis has been performed and labeled
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accordingly. Also, as explained above,
retailers currently must have a means of
knowing that their product meets the
standard of identity for ground beef.
With regard to the comment on the
costs of upgrading scale printers, FSIS’s
supplemental PRIA cost analysis
estimates the cost of updating scale
printers at $2,400 per store or $56.35
million total. FSIS also estimated
annual scale maintenance costs at $144
every year after the first year the scale
has been purchased. Therefore, the
supplemental PRIA analysis is
consistent with the comment on
updating scale printers.
In response to the comment that costs
would cause many retailers that provide
on-site custom service to increase
prices, products that are ground or
chopped at an individual customer’s
request and that are prepared or sold at
retail are exempt from nutrition labeling
requirements, provided the labels or
labeling of those products bear no
nutrition claim or nutrition information.
In response to the comments from
individuals concerned that the rule
would increase the price of meat, as
explained in the supplemental PRIA
cost analysis, the cost of this rule is not
likely to be excessive relative to the
volume of input of ground or chopped
meat and poultry products sold at retail.
The estimated cost of the rule on a per
pound basis is $.0053. This increase in
cost should not affect consumer
purchases.
In response to the statement that
nutrition information would be
available if people wanted it, market
forces have not been great enough to
ensure significant participation in the
voluntary nutrition labeling program.
This fact could be evidence that
consumers are not willing to pay for this
information. Nonetheless, as is
explained above, FSIS believes that
consumers have reasonable expectations
concerning the nutrient content of the
major cuts of meat and poultry
products, but they need precise
information about the nutrient content
of the major cuts in order to make a
fully informed comparative judgment
about the various cuts. In addition, the
extent that such information conveys a
negative credence attribute would limit
its availability, if retailers were not
required to disclose it. Without
nutrition information for the major cuts
of single-ingredient products and
ground or chopped products, consumers
do not have necessary and sufficient
information to make informed
purchasing decisions.
As far as the overall costs and benefits
of compliance, the Agency believes that
it has done a reasonable job in
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estimating the costs and benefits of the
proposal.
In terms of cost to FSIS, in the
Paperwork Reduction Act analysis, FSIS
estimated that the costs of label and
records review will total $300,000
annually. Other costs the Agency incurs
as a result of this rule will be negligible.
The rule will not increase inspection
activities substantially. Similarly, it will
not increase substantially the laboratory
costs associated with FSIS sampling and
testing for nutrient analysis. FSIS will
conduct inspection and testing activities
under this rule concurrent with existing
inspection and testing activities.
Comment: A consumer organization
asserted that FSIS overestimated the
cost of the proposed rule by assuming
that 20 percent of establishments would
have to install new machinery for
stamping, printing, or affixing nutrition
labels for ground and chopped meat.
The commenter believed that the 20
percent estimate is too high. FSIS’s own
1999 survey showed that 97 percent of
large chains, 91 percent of large
independent retailers, and 84 percent of
medium and small independents
already complied with the label
requirements of the final rule for
Mandatory Safe Handling Statements on
Labeling of Raw Meat and Poultry
products. In addition, the commenter
noted that small firms are exempt from
the proposed rule.
Response: After the proposed rule was
published, FSIS contracted with RTI
International to assist the Agency in
data collection and revising the cost
analysis for the supplemental PRIA.
Among the several changes based upon
RTI’s review, FSIS revised the label cost
estimates. The supplemental PRIA
assumes that retail facilities and official
establishments have not yet incurred
any costs for nutrition labeling of
ground or chopped products or major
cuts. However, the supplemental PRIA
also estimates the current levels of
nutrition labeling and adjusts cost and
benefit estimates to reflect current levels
of nutrition labeling.
Comment: According to a retail
industry association, provisions
requiring labels on individual packages
of ground meat and poultry products
will impose most costs and burdens
upon independent retailers that offer
custom service rather than pre-packaged
case-ready meat. The commenter further
alleged that the proposal would
disproportionately affect independent
operators and their customers, coercing
retailers into increasing prices to cover
increased costs or eliminating custom
service because of the need to provide
labeling for nutritional content of
products ground in retail stores.
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One individual stated that the
proposed requirements would adversely
affect small businesses. Also, a small
producer stated that providing nutrition
information on the labels of ground
products would be difficult and costly
for the small farmer or producer selling
beef wholesale to stores.
Response: When Federal Agencies
like FSIS issue rules, they are to make
sure that the rules are fair to those being
regulated. The Regulatory Flexibility
Act requires Federal Agencies to
consider the affect of regulations on
small entities in developing regulations
(see the Regulatory Flexibility Act
Analysis below).
To minimize the burden on small
businesses, should it become final, the
rule will provide a small business
exemption. In addition, the rule will
provide an exemption from nutrition
labeling requirements for ground or
chopped products that are ground or
chopped at an individual customer’s
request and that are prepared and
served or sold at retail, provided that
the labels or labeling of these products
bear no nutrition claims or nutrition
information. FSIS also intends to
provide nutrition labeling materials for
the major cuts of single-ingredient, raw
products and for ground or chopped
products on a free basis through its Web
site. Retailers can display these
materials at the point-of-purchase for
the major cuts. Also, retailers and
official establishments can obtain
nutrition information for ground or
chopped products at the following Web
site: https://www.ars.usda.gov.
Comment: A consumer organization
argued that FSIS underestimated the
benefits of the rule by ignoring both the
impact of meat and poultry
consumption on non-fatal cases of heart
disease and cancer and the impact on
obesity and its consequences.
According to the commenter, FSIS
limited its estimates of the benefits to
the reduction in annual deaths from
breast cancer, prostate cancer, colorectal
cancer, and coronary heart disease. The
commenter stated that this approach
ignores the benefits to consumers in
reducing the number of non-fatal cases
of these four diseases. For example,
according to the commenter, when FDA
evaluated the benefits of its proposed
rule on trans fatty acids in foods, the
Agency estimated that only one-third of
heart attack cases due to coronary heart
disease are fatal. For non-fatal cases,
FDA estimated the discounted value of
the reduction in functional disability
and pain and suffering of the patient
and the reduction in medical costs at
$282,000 per case (or 33.5 percent of the
FDA’s estimated value of $840,000 per
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fatal case). According to the commenter,
as there are two non-fatal cases of
coronary heart disease for every fatal
case, FSIS should increase its benefits
from the proposed rule by 67 percent.
At a seven percent discount rate, this
would increase the benefits over 20
years from a reduction in coronary heart
disease from FSIS’s current estimate of
$752 million to $1.256 billion.
The commenter also stated that
similar adjustments could be made to
account for the reductions in the nonfatal cases of three types of cancer that
FSIS considered. About 42 percent of
colorectal cancer cases are fatal, about
16 percent of prostate cancer cases are
fatal, and about 21 percent of breast
cancer cases are fatal. The commenter
believed that one could assume that the
ratio of the benefits of reducing these
non-fatal cases to the benefits of
reducing the fatal ones is the same for
these three types of cancer as FDA used
for coronary heart disease, i.e., 33.5
percent. Using a seven percent discount
rate, the commenter estimated that
including the reduction in non-fatal
cases would increase the benefits over
20 years from a reduction in these three
types of cancer from FSIS’s current
estimate of $167 million to $316
million.
In sum, including the impact of the
proposed rule on non-fatal cases of the
four diseases FSIS considered increases
the total benefits (using a seven percent
discount rate over 20 years) from $918
million to $1.572 billion.
When the commenter looked at the
impact of the rule as it related to total
fat, saturated fat, and cholesterol, the
commenter thought that the proposal
might help lead to a reduction in
weight, which, in turn, could lead to a
reduction in both mortality and
morbidity from various diseases.
According to the commenter, recent
studies placed the cost of obesity in the
United States at $39 billion in direct
medical costs and $48 billion in indirect
loss of output because of both morbidity
and mortality. Reducing these $87
billion in annual costs by even 0.15
percent through the provisions of this
rule would mean additional annual
benefits of $13.05 million, which (at a
7 percent discount rate) means
additional benefits over 20 years of
about $138 million.
In summary, the benefits of the
proposed rule over 20 years (discounted
at 7 percent)—taking account of
morbidity and obesity—could well be
$1.71 billion rather than the $918
million estimated in the proposed rule
based on FSIS’s examining only
mortality.
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Conversely, a meat industry
organization cautioned FSIS against
making the mortality assumptions
included in the proposed rule’s benefits
analysis. This commenter stated that
FSIS’s assumptions were based on only
one part of meat’s nutrient content. The
commenter stated that, while diets high
in saturated fat and cholesterol have
been associated with risk of chronic
disease, meat has never been shown to
cause such diseases.
A farmer/rancher believed that the
new nutrition labeling requirements
could potentially encourage consumers
to eat more meat, which would increase
her profits.
Response: In response to the comment
concerning non-fatal cases of heart
disease and cancer, FSIS has reviewed
all of the information provided by this
commenter and believes that the
information provided on coronary heart
disease is potentially useful to the FSIS
analysis. The information on the
relationship between fatal cases and
non-fatal cases of coronary heart disease
is reliable in that FDA looked at the
relevant literature and medical statistics
to determine the annual number of heart
attack cases of coronary heart disease
that occur and the percent of those
(occurring each year) that are fatal. This
allows for a total, in a given year, of the
number of heart attack cases that are not
fatal, based just on new heart attack
cases. FSIS agrees that a reduction in
non-fatal cases of chronic heart disease
would result in a significant benefit to
society. The methods for estimating
both the number of non-fatal cases
avoided annually, and the value of nonfatal cases avoided annually are
unsettled and further research is needed
to improve the reliability of this
information.
The information on colorectal,
prostate, and breast cancer is not as
reliable as that on non-fatal cases of
coronary heart disease. Specifically, the
information reported by the American
Cancer Society represents the annual
number of new cases, but the annual
number of deaths includes deaths from
both old cases and new cases of disease.
In other words, the annual number of
deaths also represents deaths from cases
that were reported as new cases in
previous years. Therefore, if FSIS were
to adopt the information suggested by
this commenter, then the denominator
used to calculate the percent of fatal
cases to all cases would be too small
and the percent of fatal cases would be
too high. Consequently, the benefits
estimates associated with the reduction
of non-fatal cases would be greater than
the actual value of benefits. It should be
noted however, that to ignore the
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benefits associated with the reduction of
non-fatal cases is also incorrect because,
in fact, some benefits exist even though
methods are not available to provide
reliable estimates. At this time, it is not
possible to provide a quantitative
estimate of the benefits associated with
reducing the non-fatal cases of
colorectal, prostate, breast cancer, and
coronary heart diseases.
Although the consumer organization
recommended that FSIS revise the
benefits estimate to include specific
benefits associated with weight loss,
FSIS did not account for these benefits
in the final analysis. FSIS does not have
the data necessary to estimate these
benefits, and the commenter did not
provide the data.
With regard to the industry comment
that cautioned against making the
benefits assumptions included in the
preliminary benefits analysis, the
supplemental PRIA benefits analysis is
consistent with the preliminary benefits
analysis. Therefore, the supplemental
PRIA benefits analysis estimates the
value of potential changes from intake
of fat, saturated fat, and cholesterol that
could occur as consumers respond to
newly available nutrition information.
The supplemental PRIA analysis uses
changes in serum cholesterol to estimate
health outcomes, which are reductions
in the number of cases and mortality
from three cancers and coronary heart
disease. FSIS used survey data and a
model developed by Zarkin, et al. to
conduct the benefit analysis. The
industry commenter did not provide
data that would allow FSIS to conduct
an alternative benefit analysis.
With regard to the comment that new
nutrition labeling requirements could
encourage consumers to eat more meat,
FSIS does not have data that indicate
that consumers will consume more meat
as a consequence of new nutrition
labeling requirements. Therefore, the
supplemental PRIA benefits analysis
does not include increased profits to
producers.
Comment: One individual stated that
there are benefits to individuals in
keeping track of their nutritional intake.
This commenter believed that he would
find it valuable to know the levels of the
different nutrients in meat and poultry
products.
Response: FSIS concurs that there are
benefits to keeping track of an
individual’s nutritional intake. The
level of benefits associated with
nutrition labeling depends on the extent
to which consumers change their food
consumption in favor of products that
are more nutritious. To accomplish this,
a consumer needs to keep track of his
or her nutritional intake.
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Comment: One individual stated that
nutrition labeling on raw meat and
poultry products could potentially lead
to some decreases in the sale of red
meat. The commenter also stated that
poultry and fish will become more
popular. The commenter did not
anticipate a big overall change in sales.
An animal protection organization
also stated that the net effect of the rule
may be a decrease in the overall
consumption of meat.
Response: Should this rule become
final, the impact of the rule will depend
upon the extent to which consumers
change their food consumption in favor
of products that they believe are more
consistent with a healthy diet.
Therefore, it is possible, as the
commenters stated, that nutrition
labeling on raw meat and poultry
products could lead to some decreases
in the sale or consumption of red meat
as well as some increases in the sale of
poultry and fish. FSIS has no
information that would allow the
Agency to measure such impact.
Therefore, the supplemental PRIA does
not reflect any anticipated changes in
the volume of meat and poultry
products consumed annually.
Comment: A consumer organization
stated that there are significant
differences between African Americans
and Caucasions in the incidence of the
four diseases that the FSIS examined in
determining the benefits of the proposed
rule. According to this commenter,
African Americans are 50 percent more
likely than Caucasians to die of heart
disease, 43 percent more likely to die of
colorectal cancer, 153 percent more
likely to die of prostate cancer, and 38
percent more likely to die of breast
cancer. African Americans are also 140
percent more likely than Caucasians to
die of diabetes, a disease linked to
obesity.
Response: The benefits analysis that
was prepared for this rulemaking does
not estimate benefits attributable to
specific groups (e.g., Caucasians or
different minority groups). However, the
benefits analysis does measure the
impact to all affected parties. Therefore,
no group of individuals has been
excluded. Assuming that the
information provided by this
commenter is correct, then the rule may
have a greater positive impact on
minorities than on Caucasians.
Other Comments
Comments: Two industry
organizations suggested that other
nutrients, e.g., zinc, and B-vitamins,
should be required nutrients in
nutrition labeling of meat and poultry
products. One producer suggested that
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USDA provide information on omega 3
fatty acids and Conjugated Linoleic
Acid (CLA) in the nutrient data base.
One commenter suggested the addition
of a warning label on meat products
stating, ‘‘Meat consumption has been
linked in research to a higher risk for
heart disease, cancer, hypertension,
diabetes, and other serious diseases.’’
Response: These comments are
beyond the scope of the regulation.
Comment: One industry commenter
suggested that what was needed most
was more consumer education on
understanding and interpreting
nutrition facts panels.
Response: FSIS’s requirements for
nutrition facts panels are consistent
with FDA’s requirements for nutrition
facts panels. FSIS has no information
indicating that consumers are confused
regarding the information displayed on
nutrition facts panels. However, if FSIS
receives information indicating that
consumers need more education
concerning the information on nutrition
facts panels, the Agency will consider
developing consumer education
materials to aid consumers in
understanding the nutrition facts
panels.
Comment: One commenter suggested
that a uniform compliance date should
be provided for meat and poultry
labeling requirements.
Response: FSIS has published a final
rule that establishes January 1, 2012, as
the uniform compliance date for new
food labeling regulations that are issued
between January 1, 2009, and December
31, 2010 (73 FR 75564). FSIS issued
these regulations to enhance the
industry’s ability to make orderly
adjustments to new labeling
requirements without unduly exposing
consumers to outdated labels and to
minimize the economic impact of
labeling changes. Should this rule
become final, the January 1, 2012,
effective date will apply to the nutrition
labeling requirements for ground or
chopped products because nutrition
labels will be required on ground or
chopped products, unless an exemption
applies. Should it become final, this
rule will allow nutrition information for
the major cuts of single-ingredient, raw
meat and poultry products at their
point-of-purchase, not on the product.
Therefore, FSIS intends to make the
labeling requirements for the major cuts
effective one year from the date of
publication of the final rule.
Comment: One commenter stated that
it had heard that the data in the USDA
National Nutrient Database for Standard
Reference are not current, and that
USDA is undertaking nutrient analyses
of additional fat/lean combinations (e.g.,
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93/7; 90/10; 85/15) of ground beef. This
commenter recommended that USDA
forestall promulgation or
implementation of these nutrition
labeling regulations until all of the
necessary information is available.
Should FSIS finalize the rule, the
commenter recommended that FSIS
adopt an 18-month implementation
period for the regulations.
Response: As noted above, the USDA
National Nutrient Database for Standard
Reference includes nutrient values for
ground beef product containing 5%,
10%, 15%, 20%, and 25% fat. In
addition, ARS has included a calculator
on the Internet that will calculate the
nutrient values of a particular ground
beef product based on the fat or lean
value entered.
Should it become final, the effective
date for the nutrition labeling
requirements for ground or chopped
products will be January 1, 2012.
Therefore, the affected industry will
likely have more than 18 months prior
to FSIS’s implementation of the rule for
ground or chopped products.
Section II. Executive Order 12866—
Supplemental Proposed Rule
Regulatory Impact Analysis (PRIA)
This action has been reviewed for
compliance with Executive Order
12866. As this action is determined
‘‘economically significant’’ for purposes
of Executive Order 12866, the Office of
Management and Budget (OMB) has
reviewed it.
This supplemental PRIA differs from
the PRIA that was published for the
proposed rule. The Food Safety and
Inspection Service (FSIS), after
reviewing public comments, has
concluded that further analysis of the
costs and benefits of the rule was
required. RTI, International performed
an in-depth analysis responding to those
comments (RTI, International, 2003) that
formed the basis for the revisions to the
cost analysis. FSIS incorporated the RTI
findings with minor changes into this
final analysis. FSIS, among other
revisions, has also added a discussion
comparing the costs of regulatory
alternatives, revised the analysis of
benefits, and added a new section
examining the cost effectiveness of the
rule.
This economic analysis uses the most
current data available to the Agency. It
relies on the U.S. economic census data
from 2002, released in a report dated
November 2005. Even though the data
collection for the ‘‘U.S. Bureau of the
Census—2007 Economic Census’’ has
been completed, because the detailed
reporting on the retail firms and
establishments that would likely be
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affected by the final rule is not
scheduled to be available to the Agency
until about October 2010, FSIS was
unable to use that data. Thus, Tables 3,
4, and 5 (below), which rely on the 2002
census data, have the most current
information on these retail firms and
establishments available. Further, the
Agency used data from the FSIS
Performance Based Inspection System
(PBIS), April 2006, to estimate the
number of Federally- and Stateinspected meat and poultry slaughter
and processing establishments that
would likely be affected by the final
rule. These are the most representative
data available to the Agency on the time
period around the 2002 economic
census data. In addition, the Agency
used 2005 costs because they are the
most representative data available to the
Agency, for the time period reflected in
the 2002 economic census data.
The Agency requested that the
Interagency Economic Peer Review
Group coordinate a peer review of the
final regulatory impact analysis. The
peer reviews conducted by two
economists from Federal agencies and
the FSIS responses to their comments
are available in the FSIS docket room
and on the FSIS Web page with the
supplemental proposed rule.
FSIS is proposing to amend the
Federal meat and poultry products
inspection regulations to require
nutrition labeling of the major cuts of
single-ingredient, raw meat and poultry
products, unless an exemption applies.
Should this rule become effective, the
guidelines for voluntary nutrition
labeling will become mandatory for
these products.
FSIS is also proposing to amend its
regulations to require on-package
nutrition labels for ground or chopped
meat and poultry products. The Agency
has determined that single-ingredient,
raw ground or chopped meat and
poultry products are different from
other single-ingredient, raw meat and
poultry products in several important
respects, and that these products are
similar to products in the current
mandatory program that are required to
bear nutrition labels. Thus, under this
rule, the nutrition labeling requirements
for all ground or chopped meat and
poultry products will be consistent with
the nutrition labeling requirements for
multi-ingredient and heat processed
products.
The supplementary proposed rule
provides for a number of exemptions,
including a small business exemption.
Should the rule become final, small
businesses will be exempt from the
requirement for nutrition labeling of
single-ingredient, raw ground or
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chopped products. Small businesses are
those with 500 or fewer employees, are
owned by companies with 500 or fewer
employees, and produce 100,000
pounds or less annually of each ground
product affected by the rule.1
A. Need for the Rule
FSIS believes that less than the
optimal amount of nutrition information
is being provided because consumers
cannot independently determine the
nutritional qualities of the meat and
poultry products affected by the rule,
thus leading to insufficient incentives
for processors and retailers to reveal the
nutrient content of these products. To
the extent that consumers purchase
these products to achieve a nutritional
objective, information about the
nutritional characteristics of these
products has value. Some consumers
may purchase or otherwise obtain such
information at a cost. However, such
information may be costly to obtain for
most consumers, and such information
may change in value with the
development of new products with
different nutritional characteristics.
The association between consumption
of fat, saturated fat, and cholesterol with
three types of cancer and coronary heart
disease is discussed in the proposed
rule (66 FR 4969, January 18, 2001) and
the Supplemental PRIA Benefits
Analysis of this section. In 2003, there
were about 39,800 deaths in the United
States from breast cancer, 29,800 deaths
from prostate cancer, and 57,100 deaths
from colorectal cancer. There were
about 515,200 deaths from coronary
heart disease in 2000. Consequently, a
decline in the percentage of calories
from fat, saturated fat, and cholesterol
can lead to a potentially significant
number of deaths averted.
A substantial amount of theoretical
and applied research has been
conducted on the economics of
consumer information since first
discussed by Stigler, and subsequently
by Lancaster and Rosen. Economic
theory now treats information on the
characteristics of a good along with
information on the price of the product
as major determinants of consumer
choice.
A basis for required labeling exists
when the market does not supply
enough information to allow consumers
to make consumption choices that
reflect their individual preferences.
Under conditions of asymmetric
information, social costs and benefits
1 It is possible that some very small
establishments could potentially be affected by the
requirements if they are owned by companies with
more than 500 employees and they produce more
than 100,000 pounds of any ground product.
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may suggest a different labeling
outcome than the one resulting from a
private firm’s labeling decision (Golan,
et al.). Asymmetric information may
particularly be a problem in markets for
foods with negative credence attributes 2
as is discussed below regarding
products subject to the rule.
In their examination of food
consumption patterns before and after
the general availability of information
about nutritional characteristics, dietdisease connections, and health claims,
a number of authors have confirmed the
role of nutrition information in
enhancing the ability of consumers to
make healthier food choices (Kim et al.,
Neuhouser et al., Tiesl, et al. (1997,
2001), Moorman, and Ippolito and
Mathios (1990b, 1991, 1995, 1998). The
results of these studies are discussed in
the Benefits Analysis.
Ground or chopped meat and poultry
products are formulated by processors
and the nutritional characteristics of
these products may vary.3 In addition,
without nutrition information for the
major cuts, consumers cannot assess
precise levels of fat and cannot know
the levels of specific nutrients in these
products.4 Major cuts are generally
considered by consumers to be largely
undifferentiated products in terms of
nutrient content. If one supplier of
major cuts provides the nutrient
information, and such information is the
same regardless of supplier, there is no
incentive for other suppliers to incur the
cost of providing the information. The
extent that such information conveys a
negative credence attribute would
further limit its availability.
As is explained above, FSIS believes
that consumers have reasonable
expectations as to the nutrient content
of the major cuts. Competitive pressures
among processors could over time
increase the supply and accuracy of
2 Credence attributes are characteristics of the
quality of a product that the consumer cannot
determine even after consumption (nutritional
value, medical expertise). Credence characteristics
will always require the consumer to acquire
information, such as nutritional information, from
the seller or third parties, whose credibility will
vary.
3 Single-ingredient, raw ground or chopped meat
and poultry products is one of the two major
product categories addressed in the rule. As the
definition of this product does not change in the
analysis, it will be referred to as ‘‘ground or
chopped products’’.
4 Major and nonmajor cuts of single-ingredient,
raw meat and poultry products is one of the two
major product categories addressed in the rule. The
category of products will be referred to as ‘‘major
and nonmajor cuts’’. In the case where only major
cuts of single-ingredient, raw meat and products are
considered, they will be referred to as ‘‘major cuts’’.
Nonmajor cuts of single-ingredient, raw meat and
poultry products will be referred to as ‘‘nonmajor
cuts’’.
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such information (Ippolito and Mathios,
1991). However, the comparison
between foods necessary to construct a
healthy diet is made difficult if precise
information about nutrient content is
not provided, significantly different
formats are used to provide nutrition
information, or the information is
difficult to interpret. Thus, the point-ofpurchase (POP) nutrition information
requirement and enforcement of
accuracy will facilitate consumer efforts
to construct a healthy diet and facilitate
consumer understanding of the
information provided.
There is not uniform agreement that
nutrition labeling is always an effective
policy measure, even if government
intervention were warranted on the
basis of informational needs and social
welfare. Variyam, Blaylock, and
Smallwood, 1995 and 1997, found that
labels are not an effective means for
educating consumers and changing
consumption behavior. However, these
papers emphasize format and context of
the information as important factors
affecting the influence of the
information on the audience. For
example, consumers are more likely to
read and understand labels that are clear
and concise (Hadden; Magat and
Viscusi; Noah). Some of the studies
cited above (Tiesl and Levy, 1997, and
Ippolito and Mathios, 1995) have found
that the effectiveness of nutrition labels
are augmented within the context of
broader nutrition education programs
about diet-health linkages.
Golan, et al., summarize research
showing when nutrition labeling is the
most appropriate policy tool. Conditions
when labeling may be appropriate
include:
• Consumer preferences differ.
Labeling may be preferable if consumer
preferences differ widely with respect to
product characteristics, in this case total
fat, cholesterol, saturated fat, calcium,
and iron for example. As is the case for
high sodium foods, consumers show
significantly different attitudes to fat
content.
• Information is clear and concise. To
be effective, the information on the label
is clear, concise, and informative. FSIS
believes that this criterion will be
achieved for both nutrition labels and
POP information.
FSIS concludes that these conditions
exist for the products subject to the rule
or would be accomplished by the rule.
FSIS also concludes that nutrition labels
and POP information are superior to
other tools such as food bans, taxes on
fat content, and consumer education
programs.
Ippolito and Mathios (1990a) argued
that competition among food suppliers
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and consumer skepticism about
suppliers’ claims for their foods often
leads to well-informed consumers. If, for
example, consumers were concerned
about dietary intake of sodium, a
supplier with a product low in sodium
would advertise that attribute. If
consumers were also concerned about
fat, a supplier with a low-sodium and
low-fat product would advertise both
attributes. Consumers would know that
the low-sodium product that does not
make a low-fat claim is likely a higherfat product. And any product that is
silent on both attributes is higher in
sodium and fat.
But Ippolito and Mathios also argued
there could be conditions under which
unfolding of information fails to occur
and consumers are not informed about
important product attributes. Unfolding
might not occur when similar products
share a negative attribute, like having a
high fat content when consumers are
concerned about the fat content of
foods. If all competing foods share a
high fat content, all suppliers have
products embodying a negative
attribute, and no supplier would have
an incentive to advertise fat content. In
that case, mandatory nutrition labels
might provide consumers with
information they want and did not have.
From a statutory perspective, the lack
of nutrition information on the labeling
of the major cuts and on ground or
chopped products is misleading because
material facts or attributes about these
products are not disclosed to the public.
The FMIA and PPIA provide that
product is misbranded if its labeling is
false or misleading in any particular
way (21 U.S.C. §§ 601(n)(1) and
453(h)(1)). Therefore, without nutrition
information for the major cuts and for
ground or chopped products, FSIS has
concluded that these products would be
misbranded under section 1(n) of the
FMIA or section 4(h) of the PPIA (66 FR
4974, January 18, 2001).
FSIS believes that the nutrition
labeling requirements, when
implemented, will provide consumers
with valuable information, leading to
improved dietary decisions. By
increasing consumer awareness of the
levels of total fat, saturated fat, and
cholesterol in meat and poultry
products affected by the rule, nutrition
labeling may serve as a further incentive
to food retailers and official
establishments to provide products with
reduced levels of these nutrients. FSIS
has concluded that further action is
necessary in order to provide consumers
with adequate nutrition information.
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B. Baseline
The rule would affect Federal
establishments and may affect State
establishments 5 that produce ground or
chopped meat and poultry products.
The rule would also affect retail food
establishments such as supermarkets,
grocery stores, meat markets, warehouse
clubs, and superstores. To be
conservative, FSIS has included State
establishments in this analysis. The
Agency used its Performance Based
Inspection System (PBIS) database of
April 2006 to determine the number of
active Federally-inspected
establishments producing ground or
chopped products affected by the rule
(Table 1).
TABLE 1—SIZE DISTRIBUTION OF FEDERAL ESTABLISHMENTS PRODUCING GROUND OR CHOPPED PRODUCTS
Size
Number
Very Small (9 or fewer employees or less than $2.5 million in sales annually) ...........................................................................
Small (10 to 499 employees) ........................................................................................................................................................
Large (500 or more employees) ....................................................................................................................................................
1,433
858
109
Total ........................................................................................................................................................................................
2,400
Source: FSIS Performance Based Inspection System (PBIS), April 2006.
For purposes of this analysis, very
small establishments, defined as those
with 9 or fewer employees or less than
$2.5 million in annual sales are exempt
from the requirement for nutrition
labeling of single-ingredient, raw
ground or chopped products because
they have 500 or fewer employees, are
owned by companies with 500 or fewer
employees, and FSIS assumes they
produce 100,000 pounds or less
annually of each ground product.6 Some
small establishments may also be
exempt from the regulation for the same
reasons that some very small
establishments are exempt.7
Nutrition labels are designed for
company-wide use. FSIS estimated the
number of affected companies by
dividing the number of small and large
Federal establishments in Table 1 by
three. Based on research, multiestablishment firms own an average of
three establishments (Muth, 2003, RTI,
2003). That is, 858 small establishments
+ 109 large establishments /3 = 322
small and large firms. Some of these
Federal establishments may be
independent and may not be part of a
multi-establishment firm. Similarly,
some very small establishments may be
part of a multi-establishment firm.
Therefore, this is an area of uncertainty
in the analysis. However, FSIS believes
its assumptions are reasonable for
purposes of estimating costs.
In addition, the Agency used the PBIS
to estimate the number of active State
establishments producing singleingredient, raw ground or chopped meat
and poultry products that would be
affected by the rule (Table 2). The
information in PBIS on State
establishments may not be complete.
Thus, the Agency may be
underestimating the number of State
establishments, or the total number of
these establishments that would be
affected by the rule.
TABLE 2—SIZE DISTRIBUTION OF STATE ESTABLISHMENTS PRODUCING GROUND OR CHOPPED PRODUCTS
Number of
establishments
Size
Very Small (9 or fewer employees or less than $2.5 million in sales annually) ...........................................................................
Small (10 to 499 employees) ........................................................................................................................................................
Large (500 or more employees) ....................................................................................................................................................
632
41
0
Total ........................................................................................................................................................................................
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Source: FSIS Performance Based Inspection System (PBIS), April 2006.
Most, if not all, of these State
establishments may be independent and
may not be part of a multi-establishment
firm. Very small State establishments
are exempt from the requirement for
nutrition labeling of ground or chopped
products because they have 500 or fewer
employees, and the agency has assumed
that they are owned by companies with
fewer than 500 employees and produce
100,000 pounds or less annually of each
ground product. Some small State
establishments may also be exempt from
the regulation for the same reasons that
some very small Federal establishments
are exempt. Nutrition labels are
designed for company-wide use. Thus,
for purposes of the analysis the number
of small State establishments and firms
are the same.
The total estimated number of meat
and poultry processing firms is 363
firms (322 firms with establishments +
41 firms with State establishments) that
would be producing ground or chopped
meat and poultry products that would
be affected by the rule.
Based on the U.S. Economic Census
for 2002, there are 47,688 retail firms
and 74,910 retail establishments that
would be affected by the POP
requirements for the major cuts of meat
and poultry (Table 3). Despite FSIS
encouragement of retailers’ use of (POP)
materials for the major cuts, the October
1999 voluntary nutrition labeling survey
5 Unless stated otherwise, when discussing meat
and poultry processing establishments, Federallyinspected establishments will be referred to as
‘‘establishments’’. State-inspected establishments
will be referred to as ‘‘State inspected
establishments’’.
6 It is possible that some very small
establishments could potentially be affected by the
requirements if they are owned by companies with
more than 500 employees and they produce more
than 100,000 pounds of any ground product.
However, FSIS has concluded that this is a
reasonable criterion for defining very small
establishments that would be exempt from certain
provisions of the rule. FSIS has not received public
comment objecting to the use of this criterion and
does not believe that establishments would alter
their operations to meet this criterion.
7 The PBIS does not include data on the size of
the owning company or on processed food volumes.
Therefore, it is not possible to determine whether
some of these establishments qualify for the small
business exemption.
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(USDA, 1999) found a lower rate (54.7
percent of retail stores) of participation
than the December 1996 survey (USDA,
1996) found (57.7 percent of retail
stores). The effect of existing
compliance reduces the cost impacts of
the rule are shown in Appendices C and
D and are discussed below.8
TABLE 3—NUMBER OF RETAIL FIRMS AND ESTABLISHMENTS AFFECTED BY POP NUTRITION INFORMATION REQUIREMENTS
FOR MAJOR CUTS OF MEAT AND POULTRY
NAICS code
NAICS description
Firms
Establishments
445110 ........
445210 ........
452910 ........
Supermarket and other grocery (except convenience stores) ..............................................
Meat markets .........................................................................................................................
Warehouse clubs and superstores ........................................................................................
42,318
5,354
16
66,150
5,848
2,912
Total .....
................................................................................................................................................
47,688
74,910
Note: NAICS is North American Industry Classification. A ‘‘firm’’ refers to the parent company and an ‘‘establishment’’ refers to the retail facility.
Source: U.S. Department of Commerce, U.S. Bureau of the Census—2002 Economic Census, November 2005. ‘‘Establishment and Firm
Size: Retail Trade.’’ EC02–44SS–SZ. Washington, DC: U.S. Department of Commerce.
Table 4 shows the number of large
retail firms and establishments affected
by nutrition labeling requirements for
ground or chopped products. About
23,479 retail establishments are owned
by about 266 companies that have 500
or more employees. Table 5 shows the
estimated number of small retail firms
and establishments that would be
affected by nutrition labeling
requirements for ground or chopped
products, if there were no waiver related
to the use of a ‘‘percentage-lean/
percentage-fat’’ statement. About 51,431
retail establishments are owned by the
47,422 firms that have less than 500
employees. This policy is discussed
below.
TABLE 4—ESTIMATED NUMBER OF LARGE RETAIL FIRMS AND ESTABLISHMENTS AFFECTED BY NUTRITION LABELING
REQUIREMENTS FOR GROUND OR CHOPPED MEAT AND POULTRY PRODUCTS
NAICS code
NAICS description
Firms
Establishments
445110 ........
445210 ........
452910 ........
Supermarket and other grocery store (except convenience stores) .....................................
Meat markets .........................................................................................................................
Warehouse clubs and superstores ........................................................................................
253
2
11
20,434
142
2,903
Total .....
................................................................................................................................................
266
23,479
Note: NAIC is North American Industry Classification. A ‘‘firm’’ refers to the parent company and an ‘‘establishment’’ refers to the retail facility.
Source: U.S. Department of Commerce, U.S. Bureau of the Census—2002 Economic Census, November 2005. ‘‘Establishment and Firm
Size: Retail Trade.’’ EC02–44SS–SZ. Washington, DC: U.S. Department of Commerce.
TABLE 5—ESTIMATED NUMBER OF SMALL RETAIL FIRMS AND ESTABLISHMENTS AFFECTED BY NUTRITION LABELING REQUIREMENTS FOR GROUND OR CHOPPED MEAT AND POULTRY PRODUCTS, WHEN THE ‘‘PERCENT-LEAN/PERCENTFAT’’ LABEL IS NO LONGER WAIVED FOR THESE PRODUCTS
NAICS code
NAICS description
Firms
Establishments
445110 ........
445210 ........
452910 ........
Supermarket and other grocery store (except convenience stores) .....................................
Meat markets .........................................................................................................................
Warehouse clubs and superstores ........................................................................................
42,065
5,352
5
45,716
5,706
9
Total .....
................................................................................................................................................
47,422
51,431
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Note: NAIC is North American Industry Classification. A ‘‘firm’’ refers to the parent company and an ‘‘establishment’’ refers to the retail facility.
Source: U.S. Department of Commerce, U.S. Bureau of the Census—2002 Economic Census, November 2005. ‘‘Establishment and Firm
Size: Retail Trade.’’ EC02–44SS–SZ. Washington, DC: U.S. Department of Commerce.
Should it become final, the rule
would affect an estimated 21.6 billion
pounds of meat and poultry products.
Of this amount, 16.7 billion pounds are
major cuts of single-ingredient, raw
products and 4.9 billion pounds are
ground or chopped meat and poultry
products. The amount of ground or
chopped product subject to the
provisions by the rule is reduced from
an estimated 6.2 billion pounds as a
result of exemptions to small
businesses. There are approximately 2.9
billion pounds of nonmajor cuts. These
products are not affected by the final
rule; however they are affected by the
requirements of Alternatives 2 and 5
discussed in the following section. The
source and derivation of these estimates
are provided in Appendix A, Tables 1–
4 and discussed in the Cost
Effectiveness Analysis.
8 The appendices supporting the economic
analysis are available from the FSIS docket room
and at https://www.fsis.usda.gov/regulations_&_
policies/2009_Proposed_Rules_Index/index.asp.
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These estimates, however, do not take
into account the level of voluntary
compliance with the nutrition labeling
requirements for ground or chopped
products that currently exists.
Consequently, the estimated amounts of
ground or chopped products and major
cuts that would be impacted by the final
rule are overstated. However, in the
analysis that follows we take into
account the 68 percent compliance rate
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(NCBA, 2004) of voluntary nutrition
labeling of ground or chopped products
and 54.8 percent level of voluntary
compliance (USDA, 1999) of stores that
provide nutrition labeling for major
cuts.
FSIS used data from USDA’s
Continuing Survey of Food Intake by
Individuals (CSFII), and the associated
Diet and Health Knowledge Survey
(DHKS) to establish a baseline for fat,
saturated fat, and cholesterol intake.
The CSFII collects data on food intakes
by individuals. USDA conducted three
separate one-year surveys for 1994–96
(USDA, 1994–1996). These surveys
recorded two nonconsecutive days of
food consumption and collected
information on what and how much
individuals ate, and where the food was
obtained. This information was used to
develop estimates of nutrient intake for
each individual respondent. The DHKS
gathered data on consumers’ knowledge
of issues related to diet and health, and
contained several questions relating to
the use of nutrition information labels
and nutrition information for food
products. Linking information from the
two surveys allowed FSIS to correlate
use of nutrition information from the
DHKS with nutrient intake data from
the CSFII. The Agency focused here on
two key questions pertaining to
nutrition information use on all food
products and on meat and poultry in
particular: Q: When you buy foods, do
you use the nutrition panel that tells the
amount of calories, protein, fat, and
such [e.g., sodium, total carbohydrate]
in the serving of a food: Often (always),
sometimes, rarely, or never? (Question
16–c, DKHS) Q: When you buy raw
meat, poultry, or fish, do you look for
nutrition information: Often (always),
sometimes, rarely, or never? (Question
17–I, DHKS). Using data from the CSFII
and the DHKS, FSIS estimated rates of
nutrition information usage, based on
these two questions. The results are
presented in Benefits Analysis (Table
15) where they are used to establish a
baseline for intake of fat, saturated fat,
and cholesterol. Additional information
is then used to estimate the impacts of
label usage on dietary intakes of these
67763
nutrients, and the resulting human
health effects.
C. Regulatory Alternatives
FSIS considered several regulatory
alternatives:
• Alternative 1: Continuing with the
existing voluntary program;
• Alternative 2: Making the voluntary
program mandatory;
• Alternative 3 (the supplemental
proposed rule): Requiring nutrition
information on labels of all ground or
chopped products and making the
voluntary program mandatory for the
major cuts;
• Alternative 4: Requiring nutrition
information on labels of the major cuts
and on all ground or chopped products;
and
• Alternative 5: Requiring nutrition
information on labels of major and
nonmajor cuts and all ground or
chopped products.
The provisions for the regulatory
alternatives are summarized in the
following table.
TABLE 6—NUTRITION LABELING REQUIREMENTS UNDER REGULATORY ALTERNATIVES
Type of product
Ground or chopped products
Major cuts of single ingredient, raw
products
Nonmajor cuts of single-ingredient, raw
products
Alternative 1; (Status quo/current
requirements).
On-package nutrition labeling is not required for ground or chopped products that are raw, single-ingredient.
Voluntary program: nutrition information can be on package or at point of
purchase.
Alternative 2 ...........
Alternative 3 (Supplemental Proposed Rule provisions).
Mandatory nutrition labeling requirements. Nutrition information must be
provided on package or at the point
of purchase. The analysis assumes
that a reference manual is provided
at the point of purchase which contains the required nutrition information.
On-package nutrition labeling is mandatory for all ground or chopped
products, including those that are
single ingredient, raw products.
Alternative 4 ...........
Same as Alternative 3 ..........................
Mandatory nutrition labeling requirements. Nutrition information is provided on package or at the point of
purchase. The analysis assumes
that a reference manual is provided
at the point of purchase which contains the required nutrition information.
Mandatory nutrition labeling requirements. Nutrition information must be
provided on package or at the point
of purchase. The analysis assumes
that placards conveying the required
nutrition information will be located
at the point of purchase.
On-package nutrition labeling is mandatory for these products.
Alternative 5 ...........
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Regulatory
alternative
Same as Alternative 3 ..........................
Voluntary program: nutrition information for these products is not required. However, if nutrition information is voluntarily provided for these
products, it must be consistent with
the nutrition information required for
the major cuts of single-ingredient,
raw products.
Mandatory nutrition labeling requirements. Nutrition information is provided on package or at the point of
purchase. The analysis assumes
that a reference manual is provided
at the point of purchase which contains the required nutrition information.
Nutrition information for these products
is not required. However, if nutrition
information is voluntarily provided for
these products, it must be consistent
with the nutrition information required
for the major cuts of single-ingredient, raw products.
Nutrition information for these products
is not required. Nutrition information
can be provided on the label or by
POP.
On-package nutrition labeling is mandatory for these products.
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Uncertainty analyses are conducted to
estimate cost distributions for each of
the alternatives and the supplemental
proposed rule. The stochastic cost
model uses @RISK (Version 4.5,
Palisades Corp.) to examine the effects
of uncertainty. The model, statistical
properties, assumptions,
documentation, and results are
presented in the tables of Appendix B
and Appendix D, Tables 2 and 3.9
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Alternative 1: Continuing With the
Voluntary Program
FSIS considered continuing with the
existing voluntary program and
attempting to increase participation by
providing additional assistance to the
non-participants. FSIS considered
providing nutrition information or POP
materials directly to retail stores to
encourage their participation in the
voluntary nutrition labeling program
and providing POP material files on the
FSIS Web site that retailers could print
and place in their stores.
Under this alternative, retail
establishments would continue to
provide, on a voluntary basis, nutrition
labeling for all single-ingredient, raw
meat and poultry products, including
major cuts identified in §§ 317.344 and
381.444 (including ground beef, ground
pork) and cuts that are not identified as
major cuts (including ground or
chopped products not covered in
§§ 317.344 and 381.444). This
information could be provided at the
point of purchase or on the label of the
product.
FSIS’s efforts to provide nutrition
information or POP materials to retail
stores to encourage their participation in
the voluntary nutrition labeling program
and to provide POP material files on the
FSIS Web site could lead to additional
participation in the voluntary nutrition
labeling program. However, FSIS did
not choose this alternative because,
even though its cost is relatively low,
the benefits of the alternative are also
9 The stochastic model structure or framework,
equation specification, statistical properties,
assumptions, documentation, and results are
presented in the tables of Appendix B and in
Appendix D, Tables 2 and 3. In most cases, the
minimum (low), maximum (high), and most-likely
or mid-points values are to be found in the tables
of Appendix B. In general, the values used
represent information collected by RTI for the FDA
Labeling Model, or other studies such as the NCBA
surveys. Other values were assumed to be around
a point-value that was collected by RTI, NCBA, or
other referenced studies. Assumptions are made
and tested for their effect on average cost of the
alternatives considered. The results are in tables of
Appendix B, and in Appendix D, Table 1 that has
the summary of additional costs by alternative. In
addition, Appendix D, Tables 2 and 3, have the
detailed stochastic model framework of the
economic analysis, and results of the preferred
Alternative 3.
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relatively low. This option would not
ensure that nutrition information is
provided for the major cuts of singleingredient, raw meat and poultry
products. In addition, FSIS did not
choose this alternative because the
Agency has determined that ground or
chopped products that do not bear
nutrition information would be
misbranded under section 1(n)(1) of the
FMIA and section 4(h)(1) of the PPIA.
Therefore, POP materials would not be
adequate to provide nutrition
information for these products.
Alternative 2: Make the Voluntary
Program Mandatory
FSIS considered making the voluntary
program mandatory by requiring
nutrition information, either on labels or
at the point of purchase, for all singleingredient, raw meat and poultry
products, including the major cuts and
the nonmajor cuts of single-ingredient,
raw meat and poultry products. Under
this alternative, FSIS would assume that
most retailers would display POP
information for these products rather
than nutrition labels, because this is a
low-cost means of providing nutrition
information for multiple products.
FSIS believes the vehicle chosen by
retail establishments for displaying
nutrition information at the point of
purchase for all major and nonmajor
cuts of single-ingredient, raw meat and
poultry products would be a reference
manual, because placards covering all
the major and nonmajor cuts would take
up product display space and result in
visual clutter. In addition, a manual
may be easier for consumers to use than
numerous placards covering all major
and nonmajor cuts, and all the
numerous formulations of ground or
chopped meat and poultry products. A
manual about the size of the Uniform
Retail Meat and Identity Standards
publication could include nutrition
information for all the major and
nonmajor cuts, including nutrition
information for numerous formulations
of ground or chopped products. The
Uniform Retail Meat and Identity
Standards publication is approximately
100 pages, with a page size of 81⁄2x11,
in a three-ring binder. The publication
provides meat identification standards
for all cuts. However, the publication
does not provide nutrition information
or information on poultry cuts. Such
information would have to be assembled
from other sources for inclusion in the
manual.
This publication, including shipping
and handling costs, is available for
purchase through the National
Cattleman’s Beef Association for a
minimum cost of $97.50; most-likely
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cost of $100.00; or a maximum cost of
$102.50. In the cost analysis of the
alternative chosen, FSIS estimated there
are about 74,910 retail establishments
(Table 3). FSIS assumed that the manual
would be replaced annually. FSIS
estimated the labor cost of displaying
POP information for the major cuts at
$21.11 per hour.10 The time to obtain
and make available POP information for
the major cuts per store, an average of
0.5 hour, is the same as that used to
estimate the cost of Alternative 3, the
supplemental proposed rule. Based on
these estimates, the annual costs of this
alternative is estimated to be
$8,281,675.11 This estimate is
comprised of $790,675 for labor costs
(74,910 establishments × $21.11/hour ×
.5 hours) and $7,491,000 for the cost of
the reference manual (74,910 × $100.00/
establishment). The average present
value of this cost is estimated at $87.74
million12 when discounted at 7 percent
over 20 years.13
This alternative would be less
expensive than the alternative chosen
by the Agency. As explained in the
preamble to the proposed rule, FSIS is
unable to distinguish between the
benefits that would accrue from
requiring nutrition labels on products
versus nutrition information on POP
materials (66 FR 4984–4985, January 18,
2001). Research is not available to
differentiate the benefits of nutrition
information on labels versus nutrition
information on displays. This is a
significant area of uncertainty in
analyzing benefits of the regulatory
alternatives.
The benefits of this alternative may be
comparable to the benefits of the
alternative chosen if POP nutrition
information and on-package labels have
roughly the same amount of success 14
10 Department of Labor, 2002. This wage
represents an appropriate wage for a combination
of managerial and regular staff that would be
making available POP materials for major cuts and
includes wages of $15.62 and fringe benefits of
$5.49 per hour.
11 This average annual cost has a range of
variability of $8.03 million at the 5th percentile and
8.53 at the 95th percentile (see Appendix B, Table
10 and Appendix D, Table 1).
12 This average annual cost has a range of
variability of $85.10 million at the 5th percentile
and $90.83 million at the 95th percentile (see
Appendix B, Table 10 and Appendix D, Table 1).
13 All present value calculations in the analysis of
both costs and benefits use a 20-year time horizon.
14 The term ‘‘success’’ or ‘‘successful’’ is used to
aid the discussion in the cost effectiveness analysis
where the effectiveness of the regulatory
alternatives is discussed under scenarios where the
impact (‘‘success’’) of POP nutrition information is
varied relative to that of on-package nutrition labels
in leading to dietary change. The use of the same
term to refer to two different types of comparisons
is intended to clarify the discussion.
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in leading to dietary change.15 However,
because there are numerous
formulations of ground or chopped
products, it would be difficult for
producers or retailers to develop POP
materials that would address all the
different formulations that exist for
these products. Furthermore, it would
be difficult for consumers to find the
correct information for a specific ground
or chopped product on POP materials
that include information concerning
numerous formulations of these
products (66 FR 4977, January 18, 2001).
To use POP materials only, without
nutrition labels, consumers would have
to find the nutrition information for a
specific fat and lean formulation among
multiple formulations. If a statement of
the fat percentage is not included on a
package of ground products, consumers
would not know which nutrient data
concerning ground product on POP
materials would apply to that particular
ground product. Therefore, because this
option may not result in benefits
associated with the consumption of
ground or chopped products, this option
would likely result in lower benefits
compared to the option chosen. In
addition, FSIS did not choose this
alternative because it does not allow for
any distinction between major and
nonmajor cuts. FSIS has determined
that it is not appropriate or necessary to
require nutrition information for
nonmajor cuts that are not ground or
chopped at this time.
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Alternative 3 (Supplemental Proposed
Rule): Require Nutrition Information on
Labels of All Ground or Chopped
Products and Make the Voluntary
Program Mandatory for the Major Cuts
(Other Than Ground Beef, Ground Pork)
Should this rule become final, it will
require nutrition information on the
labels of all ground or chopped products
and requires nutrition information,
either on their labels or at their POP, for
the major cuts of single-ingredient, raw
products, unless such products qualify
for an exemption. Under this
alternative, retail establishments and
processors of meat and poultry products
could continue to voluntarily provide
nutrition information for nonmajor cuts
of single-ingredient, raw meat and
poultry products that are not ground or
chopped. This approach allows for a
distinction between ground or chopped
products and other cuts. It also allows
15 As the success of point-of-purchase information
declines relative to on-package nutrition labels,
there is a proportional decline in dietary changes
and consequently a proportional decline in lives
saved associated with that measure, given the
differences in that amount of product affected.
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for a distinction between major and
nonmajor cuts.
Consistent with the regulations, the
most recent voluntary nutrition labeling
survey (USDA, 1999) only assessed
whether retail stores provided nutrition
labeling for the major cuts of singleingredient, raw meat and poultry
products. Until some assessment is
made of whether adequate information
is being provided for the nonmajor cuts
of single-ingredient, raw products that
are not ground or chopped, FSIS cannot
determine whether it would be
beneficial to require nutrition
information for these products.
The derivations of the costs of
Alternative 3 are shown in the section,
Supplemental PRIA Cost Analysis. The
average total present value of the costs
of this alternative is $348.06 million,
assuming retailers select the lower cost
compliance option (Table 14). The
average annualized cost associated with
this alternative is $32.85 million. As is
shown in the section, Supplemental
PRIA Benefits Analysis, the present
value of the benefits of this alternative
is $2.2 billion if POP nutrition
information for the major cuts is as
successful as on-package labels in
leading to dietary changes. The
annualized benefit associated with this
alternative is $205.5 million. These
estimates are not adjusted to account for
current compliance, thus over estimate
costs and benefits from saved lives.
Alternative 4: Require Nutrition
Information on Labels of the Major Cuts
and on All Ground or Chopped Products
FSIS considered requiring nutrition
information only on labels of the major
cuts and on all other ground or chopped
products not covered in §§ 317.344 and
381.444.16 As in Alternative 3,
establishments could voluntarily
provide nutrition information, either at
the POP or on the label, for the
nonmajor cuts that are not ground or
chopped. This approach allows for a
distinction between major cuts and
nonmajor cuts that are not ground or
chopped.
FSIS estimates that packages of singleingredient, raw major cuts, including
ground beef and ground pork, represent
at a minimum 80 percent, most-likely 85
percent, and at a maximum 90 percent
of all packages of single-ingredient, raw
meat and poultry products sold through
retail stores. Therefore, FSIS estimates
the minimum, most-likely, and
maximum costs of this alternative
16 Ground or chopped products or not covered in
§§ 317.344 and 381.444 will be referred to as
‘‘ground or chopped products’’ in the remainder of
the final regulatory impact analysis.
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67765
would be the same as these percentages
of the costs of Alternative 5, which
requires nutrition information on the
package labels of all major and
nonmajor cuts sold through retail stores.
FSIS has based these percentages on a
previous determination by FSIS that the
major cuts are representative of the
market (56 FR 60307, November 27,
1991) and are the most popular cuts (56
FR 60320). Comments on the 1991
nutrition labeling proposal generally
supported the list of major cuts (58 FR
640, January 6, 1993). Similarly, one
comment to the January 18, 2001,
proposed rule on nutrition labeling
stated that the major cuts represent the
greatest share of fresh meat
consumption. The cost analysis of
Alternative 5 follows this discussion.
FSIS estimates the average present
value of the costs of this alternative to
be $812.99 million ($956.5 million, the
average present value cost of Alternative
5, × .85). The average annualized cost
associated with this alternative is
estimated at $90.28 million.
The benefits of this alternative would
be similar to those of the selected
alternative if POP nutrition information
and on-package labels are equally
successful at leading to dietary change.
The pounds of product requiring
nutrition labeling are the same for both
Alternatives 3 and 4. However, this
alternative would be significantly more
costly than the alternative chosen,
because this alternative would require
on-package nutrition labels on a large
volume of product that are not required
to bear labels under Alternative 3.
These estimates are not adjusted to
account for current compliance, thus
over estimate costs and benefits from
saved lives.
Alternative 5: Require Nutrition Labels
on All Single-Ingredient, Raw Meat and
Poultry Products and on All Ground or
Chopped Products
FSIS considered requiring nutrition
information on labels of major cuts and
nonmajor cuts of single-ingredient, raw
meat and poultry products, and on
labels of ground or chopped products,
unless an exemption applied.
The supplemental PRIA cost analysis
for the alternative chosen calculated the
costs of requiring nutrition labels on all
ground or chopped products. FSIS
calculated the costs of requiring labels
on all other major and nonmajor cuts of
single-ingredient, raw products that are
not ground or chopped. The same
method for estimating the labeling cost
for all ground and chopped products
under the alternative chosen was used
to estimate the labeling costs for major
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and nonmajor cuts of single-ingredient,
raw products under Alternative 5.
Table 7 shows the number of Federal
establishments producing major or
nonmajor cuts that are not ground
products. Many of these establishments
have a mix of operations that fabricate
a variety of cuts derived from multiple
species in the same establishment. This
is especially prevalent in small and very
small sized establishments. Thus, the
totals of the columns or the rows in this
table do not represent the total number
of establishments under Federal
inspection due to double counting.
TABLE 7—FEDERAL ESTABLISHMENTS THAT FABRICATE MAJOR OR NONMAJOR CUTS THAT ARE NOT-GROUND PRODUCTS
Size
Product
Large
Small
Very small
Unknown
Meat:
Beef ...................................................................................................
Pork ...................................................................................................
Lamb ..................................................................................................
Other meat ........................................................................................
52
56
0
3
886
750
319
186
1303
1155
575
338
28
23
11
4
Chicken ..............................................................................................
Turkey ................................................................................................
Other poultry ......................................................................................
158
38
0
611
210
0
698
264
2
15
5
0
Poultry:
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Note: Data is from the Performance Based Inspection System (PBIS) April 2006.
Consistent with the supplemental
PRIA cost analysis for the selected
alternative, FSIS estimates that very
small establishments would be exempt
from nutrition labeling requirements
because they have 500 or fewer
employees, are owned by companies
with 500 or fewer employees, and FSIS
assumes they produce 100,000 pounds
or less annually of each product. Also,
FSIS assumes that all ‘‘small’’
establishments are owned by large,
multi-establishment firms and would
not qualify for this exemption. Nutrition
labels are designed for company-wide
use. FSIS estimated the number of
affected companies by dividing the
number of small and large
establishments in the table above by
three, the number of establishments
owned on average by multiestablishment firms (Muth, 2003; RTI,
2003). FSIS assumed establishments of
unknown size are either large or small,
to ensure that the Agency did not
underestimate the number of affected
establishments.
In addition, there are about 41 State
establishments that are small that would
likely be affected by this rule. Little
information is available to the Agency
about the number of firms that represent
the 41 State establishments. However, it
is likely that the 41 State establishments
are owned by 41 firms. There are no
State establishments that are large. The
analysis assumes that State
establishments that are small would be
affected. Furthermore, the Agency does
not have data for these 41 State
establishments on the fabrication of
major or nonmajor cuts of singleingredient, raw products. Therefore, the
Agency may be underestimating the
number of affected firms that own small
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or large processing establishments that
fabricate major and nonmajor cuts.
Thus, the final estimates of the
number of affected firms that own small
or large processing establishments that
fabricate major and nonmajor cuts that
are not ground are: 322 beef firms; 276
pork firms; 110 lamb firms; 64 ‘‘other’’
meat firms, including goat processors;
261 chicken firms; and 84 turkey
firms.17
To estimate the average number of cut
products fabricated per firm, FSIS
estimated that all firms would fabricate
all the major cuts (except the ground
major cuts, because FSIS has already
accounted for those) and an additional
3 nonmajor cuts. FSIS estimated that
beef firms would typically fabricate 12
major products; pork firms, 9; lamb
firms, 6; chicken firms, 5; and turkey
firms, 5 major products. Therefore, the
total number of major and nonmajor
products fabricated by beef firms is 15
products; pork firms, 12; lamb firms, 9;
chicken firms, 8; and turkey firms, 8.
FSIS then assumed processors of
‘‘other’’ meat products would fabricate
12 products (similar to the number of
beef or pork products). In the table
above, the PBIS figures for beef
processors include veal processors. For
purposes of this analysis, FSIS
considered the number of major beef
cuts rather than veal cuts, because beef
is more widely produced and consumed
than veal.
FSIS estimated the average, one-time
cost to modify on-package labels for
prepackaged meat and poultry product
17 The number of firms affected is derived by
summing the number of large establishments, small
establishments, and establishments of unknown
size for each type of species in Table 7 and dividing
by 3, the average number of establishments owned
by a firm.
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by multiplying the average per label
modification cost ($2,274 as shown in
the Supplemental PRIA Cost Analysis)
by the number of affected firms and by
the number of products per firm. Based
on this formula and the numbers of
firms and products shown above, the
estimated average label modification
costs are: beef and veal firms, $10.85
million ($33,700/firm); pork firms, $7.44
million ($27,000/firm); lamb firms,
$2.22 million ($20,000/firm); other meat
firms, 1.73 million ($27,000/firm);
chicken firms, $4.69 million ($18,000/
firm); and turkey firms, $1.51 million
($18,000/firm). The total, one-time
average costs of designing labels would
be $28.45 million.
In addition to the one-time average
costs of designing labels, companies
will also incur costs for providing larger
labels with nutrition information. To
calculate this cost, FSIS estimated that
there are 11.25 billion packages (15
billion 18 retail packages of all raw meat
and poultry × 75 percent 19 that are
single-ingredient, raw packages) of
major and nonmajor cuts sold through
retail establishments.
Furthermore, in the supplemental
PRIA cost analysis for the alternative
18 The safe handling rule estimated that there
were 15 billion retail packages of raw meat and
poultry products (58 FR 58925).
19 Based on information from the July 2004
National Conference on Weights and Measures held
in Pittsburgh, PA, FSIS estimates that 25 percent of
retail packages of meat and poultry are products
with added solutions. Therefore, FSIS estimates
that 25 percent of retail packages of fresh meat and
poultry products are multi-ingredient products for
which nutrition labeling information is already
required, unless an exemption applies. Thus, 75
percent (100 percent minus 25 percent) of retail
packages of raw meat and poultry products are
single-ingredient products for which nutrition
labeling information is now required, unless an
exemption applies.
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chosen, FSIS estimated that there are
2.267 billion packages of ground or
chopped products (see Appendix B
Table 8). Therefore, FSIS estimates that
there are 8.983 billion packages (11.25
billion packages of all meat and poultry
minus 2.267 billion packages of ground
or chopped products) of major and
nonmajor cuts that are not ground or
chopped sold through retail
establishments.
FSIS estimates that 25 percent of
8.893 billion packages of singleingredient, raw major and nonmajor
cuts that are not ground or chopped are
packaged by processing establishments,
or 2.246 billion packages (8.893 billion
packages × 25 percent). Based on
information collected by RTI, a blank
label is assumed to have a minimum
cost of $0.002; most-likely cost of
$0.005; and a maximum cost of $0.008.
Multiplying 2.246 billion packages by
the annual added average cost of $0.005
per label results in an average cost of
approximately $11.23 million (2,246
billion packages × $0.005 per label)
annually. Total first-year costs (one-time
and annual recurring) to processing
establishments would be $39.68 million
($28.45 million for one-time cost +
$11.23 million annual recurring cost).
Only retail establishments that have
500 or more employees will be affected
by nutrition labeling requirements for
major and nonmajor cuts because it is
not likely that others would produce
100,000 pounds per single-ingredient,
raw product. Table 4 shows that 23,479
retail facilities are owned by companies
that have 500 or more employees. The
stores are owned by 266 firms.
Retail establishments subject to the
requirements of the rule could comply
by either incorporating nutrition
information on the label printed by store
scale printer systems (option 1) or by
applying an additional preprinted label
with nutrition information (option 2).20
The supplemental PRIA cost analysis for
the Alternative chosen shows that
option 1 is the less expensive option.
Therefore, FSIS assumes stores would
choose this option under Alternative 5
as well. FSIS also assumes that, on
average, the estimated total cost to
upgrade printer scales to provide store-
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20 Options 1 and 2 are described in the Final Rule
Cost Analysis.
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14:59 Dec 17, 2009
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printed labels is $56.35 million (23,479
retail establishments × $2,400 per
establishment). The analysis assumes
that scales with the added features for
making store-printed labels are replaced
every five years. The annual
maintenance costs for the upgraded
scale printer is estimated to be 6 percent
of $2,400 or $144 every year after a scale
printer has been purchased equal to
$3.38 million (23,479 retail
establishments × $144 per
establishment). FSIS is including these
costs here, in addition to the costs for
nutrition labeling of ground or chopped
products, because FSIS assumes that
retail stores would need to have
additional scale printers to apply labels
to major and nonmajor cuts that are not
ground or chopped.
The supplemental PRIA cost analysis
shows that for retail stores the average
one-time cost estimates for redesigning
labels is $0.414 million (Appendix B,
Table 3). FSIS is including this cost here
and in the ground or chopped products
labeling costs to ensure that FSIS does
not underestimate the costs of this
alternative.
The supplemental PRIA cost analysis
estimates that each processor company
produces an average of 6.6 unique
ground or chopped products (see
Appendix B, Table 2), that each retail
firm and meat market firm offers an
average of 4.6 unique ground or
chopped products (4.6/6.6 or 69 percent
of the number of ground or chopped
products produced by processors), and
that each warehouse club firm offers an
average of 1.33 unique ground or
chopped products (1.3/6.6 or 20 percent
of the number of ground or chopped
products sold by processors, (Appendix
B, Table 9).
Excluding ground or chopped
products, FSIS estimates that retail and
meat market firms package 69 percent of
the total number or major and nonmajor
cuts produced by establishments.
Consequently, these firms would
package on average 10.35 beef products,
8.28 pork products, 6.21 lamb products,
5.52 chicken products, 5.52 turkey
products; and 8.28 other meat products.
Excluding ground or chopped products,
FSIS estimates that warehouse club
firms package 20 percent of the total
number of major and nonmajor cuts by
processors. Consequently, these firms
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67767
would package an average of 3 beef
products, 2.4 pork products 1.8 lamb
products, 1.6 chicken products, 1.6
turkey products, and 2.4 other meat
products. Therefore, FSIS estimates that
each retail and meat market firm
packages an average of 44.16 unique
major and nonmajor cuts. FSIS also
estimates that each warehouse club firm
packages an average of 12.8 unique
major and nonmajor cuts.
Therefore, an average of 11,402
unique major and nonmajor cuts will
require nutrition labels applied in retail
facilities ((44.16 products × 255
supermarket, grocery store and meat
market firms) + (12.8 products × 11
warehouse club and superstore firms)).
Consistent with the cost analysis of
the chosen alternative, the average onetime cost to retailers affected by the rule
for the nutrition analyses of major and
nonmajor cuts21 is $7.87 million (11,402
unique products × $690 average cost of
a nutrition analysis, Appendix B, Table
3).
The use of larger labels is another cost
that retail stores may incur. If retail
stores package 75 percent of total singleingredient, major and nonmajor cuts
that are not ground or chopped, then an
average of 6.737 billion packages (8.983
billion packages × 75 percent) are
packaged by retail stores annually. If the
added average cost of each label is
$0.005 (as assumed in the cost analysis
for the alternative chosen), then retailers
affected by the rule will incur an added
average annual cost of about $33.68
million.
A summary of the frequency of
various labeling costs for singleingredient, raw products for Alternative
5 are shown in Table 8. A summary of
the costs for Alternative 5 are shown in
Table 9 and in Appendix D.
Alternative 5 is the most expensive
alternative that FSIS considered. This
alternative would require labels on a
larger volume of product than would
Alternative 4. As with Alternative 4,
this alternative would require labels on
a large volume of product not currently
required to bear labels.
21 A nutrition analysis is required to create a
Nutrition Facts panel. Nutrition information is
available from FSIS and other sources for many
ground or chopped products, and major and
nonmajor cuts of meat and poultry products.
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TABLE 8—FREQUENCY OF LABELING COSTS FOR SINGLE-INGREDIENT, RAW MEAT AND POULTRY PRODUCTS, EXCLUDING
COST FOR GROUND AND CHOPPED PRODUCTS
Frequency of cost *
Item
Recurring
One-time
1st year &
once/5 years
Annual
1st year only
Other **
$ Million
Processing:
Modify Labels .........................................................................................
Use larger labels ....................................................................................
Retail:
Upgrade printer scales ...........................................................................
Printer Maintenance ...............................................................................
Redesign larger labels ............................................................................
Use larger labels ....................................................................................
Nutrition analysis ....................................................................................
28.45
..........................
........................
11.23
........................
........................
........................
........................
..........................
..........................
0.414
..........................
7.87
........................
........................
........................
33.68
........................
56.35
........................
........................
........................
........................
........................
3.38
........................
........................
........................
* All costs are average costs as derived in Appendix B.
** Costs for printer maintenance occur annually, except for years in which a printer is purchased.
TABLE 9—AVERAGE PRESENT VALUE AND ANNUALIZED COSTS * FOR ALTERNATIVE 5
Present value
3%
Present value
7%
Annualized
3%
Annualized
7%
$ Million
Ground and chopped product:
Processing ................................................................................................
Retail .........................................................................................................
47.70
381.71
35.28
281.70
3.21
25.66
3.33
26.59
Total ground and chopped ................................................................
429.41
316.98
28.86
29.92
Raw, single-ingredient cuts:
Processing ................................................................................................
Retail .........................................................................................................
217.33
652.00
159.87
479.62
14.61
48.82
15.09
45.27
Total raw, single-ingredient cuts .......................................................
869.33
639.49
58.44
60.36
Total, All Products ......................................................................
1,298.82
956.54
87.20
90.28
* These estimates are not adjusted to account for current compliance, thus over estimate costs.
The benefits of this alternative are
comparable to the alternative chosen
after taking into account the amount of
nonmajor cuts covered by this
alternative and on the condition that
POP nutrition information is equally as
successful as on-package labels in
leading to dietary change.
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Summary Comparison of Regulatory
Alternatives
The Analysis of Alternatives section
provides an in-depth comparison of the
regulatory alternatives, including a costeffectiveness analysis. This comparison
takes into account the relative success of
POP nutrition information compared to
on-package nutrition information labels,
and the cost of each measure (form in
which nutrition information is
provided) for the products affected. The
discussion of cost-effectiveness centers
on Tables 26–29.
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D. Costs and Benefit of the
Supplemental Proposed Rule
1. Supplemental PRIA Cost Analysis
FSIS analysis of this rule includes
many of the same assumptions that were
used in the proposed rule. In most
cases, FSIS believes that the initial
assumptions are still valid. No new data
has been presented refining or disputing
these original assumptions. However, in
other cases FSIS and RTI were able,
based upon more current information, to
change and improve the original
assumptions.
PRIA vs. supplemental PRIA: The
PRIA estimated the costs of nutrition
labels based on the cost analysis
conducted for the ‘‘Mandatory Safe
Handling Statements on Labeling of
Raw Meat and Poultry Products’’
proposed rule published November 4,
1993 (58 FR 58922). In the PRIA, FSIS
adjusted the costs of the safe handling
rule to reflect the costs related to the
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volume of ground or chopped products
produced. For fixed costs associated
with nutrition labeling of ground or
chopped products, FSIS assumed that
80 percent of the estimated fixed costs
were already incurred by retailers and
processors, and only 20 percent of the
estimated fixed costs would be required
for compliance with the proposed rule.
Therefore, FSIS estimated the fixed
costs for the nutrition labeling of ground
or chopped products would total 20
percent of the estimated fixed safe
handling labeling costs: $10 million to
$20 million for processors and $28.8
million to $43.2 million for retailers (66
FR 4986, January 18, 2001).
The estimates of operating costs to
retail establishments in the PRIA are
based on the number of packages of
ground or chopped products that would
be sold through small and large retail
stores and the labeling costs per package
based on the safe handling labeling
costs. FSIS multiplied the estimated
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number of ground or chopped products
sold through large retail stores by the
safe handling label cost for large retail
stores to derive an estimate of $6
million in annual operating costs for
these stores. Similarly, FSIS multiplied
the estimated number of packages of
ground or chopped products sold
through small retail stores by the safe
handling label costs for small retail
stores to derive an annual estimate of $4
million in costs for these establishments
(66 FR 4988, January 18, 2001). FSIS
explained that these operating costs
would increase by $2 million to $12
million in current prices. FSIS also
estimated the labor costs of small firms
applying a separate nutrition label
would be $.6 million, based on safe
handling label costs (66 FR 4988,
January 18, 2001). FSIS assumed
processors would incur no additional
operating costs associated with nutrition
labeling ground or chopped products.
FSIS also estimated one-time
paperwork burden costs for nutrition
labels on ground or chopped products of
$8.8 million. These paperwork burden
costs were the estimated costs of label
development, recordkeeping, and the
costs of submitting label approval
applications to FSIS (66 FR 4988,
January 18, 2001).
Finally, FSIS estimated that the
average time for each retail
establishment to obtain POP materials
that include nutrition information for
the major cuts of single-ingredient, raw
meat and poultry products would be 30
minutes. Based on labor costs of $20 per
hour, FSIS estimated that total retail
costs for obtaining these materials
would be $0.7 million. (66 FR 4985–
4986, January 18, 2001). The PRIA did
not estimate any other costs associated
with retailers obtaining or maintaining
POP materials.
The revisions in the supplemental
PRIA are based on additional
information available to FSIS, improved
analytical methods, and a more accurate
characterization of the impacts of the
rule. FSIS revised the supplemental
PRIA in response to concerns expressed
during the Interagency review of the
PRIA about data quality and in response
to final guidelines issued by the Office
of Management and Budget (OMB, 2002)
to Federal Agencies after publication of
the proposed rule.
The supplemental PRIA assumes that
no establishment or retail facility has
incurred any costs associated with the
requirements of this regulation prior to
its effective date, even though many
firms have already been providing the
information that is being required.22
Rather than prorate cost estimates in the
safe handling rule based on the volume
of ground or chopped products, the
supplemental PRIA includes estimates
for itemized costs that pertain
specifically to nutrition labels. For
processing firms, these costs in the
supplemental PRIA include
administrative costs, graphic design
costs, prepress activities costs, plate
engraving costs, nutrition analysis costs,
and the costs of larger labels.
The supplemental PRIA explains that
if retail firms choose to use store scaleprinters to print nutrition labels for
ground or chopped products, costs to
these retailers would include upgrading
store scales-printers to include nutrition
information, redesigning larger store
67769
labels, providing a nutrition analysis for
each product, and using larger labels.
This method of labeling is referred to as
‘‘Option 1’’ in the analysis. If retail firms
choose to apply an additional
preprinted label with nutrition
information to ground or chopped
products, the cost to these retail stores
would include designing a one-color
nutrition label, conducting a nutrition
analysis for each product, and
purchasing and applying a separate
label on packages of ground or chopped
product at the retail level. This method
of labeling is referred to as ‘‘Option 2’’
in the analysis.
The supplemental PRIA assumes that
labels will be redesigned for companywide use. The supplemental PRIA also
assumes that small and large plants are
owned by large, multi-firm
establishments. In addition, the
supplemental PRIA assumes that retail
stores or chains with fewer than 500
employees produce 100,000 pounds or
less annually of each ground or chopped
product and are exempt from the
nutrition labeling requirements for
ground or chopped products. In the
supplemental PRIA, the average
material and labor cost for POP placards
have been revised.
The benefits analysis is revised from
the PRIA to reflect a constant value for
each premature death prevented by the
requirements of the rule to update cost
to 2002 dollars. The value of preventing
a premature death varied on the basis of
age in the benefits analysis of the PRIA.
Because of these changes, the benefits in
the supplemental PRIA are higher than
those of the PRIA.
TABLE 10—AVERAGE COSTS IN THE SUPPLEMENTAL PRIA
Total 1st year
costs
Bases of estimates
Present value
7%
Present value
3%
$ Million
75.58
50.83
7.81
312.77
564.36
35.28
424.53
790.70
47.70
Total costs (Option 1) ...........................................................................................................
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Retail costs, including POP materials: Option 1 .........................................................................
Retail costs, including POP materials: Option 2 .........................................................................
Costs to processors only .............................................................................................................
83.38
384.06
472.23
22 The impacts of a 68 percent compliance rate for
nutrition labeling of ground or chopped products
(NCBA, 2004) and a 54.8 percent compliance rate
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for major cuts (USDA, 1999) will be discussed at the
conclusion of this section.
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TABLE 11—BENEFITS OF THE PRIA AND SUPPLEMENTAL PRIA
Annualized benefits
Present value
Rule status
7%
3%
7%
3%
$ Million
Supplemental PRIA .........................................................................................
PRIA .................................................................................................................
The supplemental proposed rule
would require nutrition labels on all
ground or chopped products, with or
without added seasonings, unless an
exemption applies, and would make the
voluntary nutrition labeling program
mandatory for major cuts, unless an
exemption applies.
The cost analysis of the requirements
for ground or chopped products is based
on the FDA Labeling Cost Model
developed by RTI, the Enhanced
Facilities Data Base (EFD), Performance
Based Inspection System (PBIS), the
FSIS Performance Based Inspection
System database, AC Nielsen Purchase
Data of 2003, and Information Resources
Inc. (IRI). The PBIS provides estimates
of the number of very small, small, and
large processing establishments that
grind meat and poultry products. IRI
scanner data and AC Nielsen Purchase
Data provide estimates of the number of
ground or chopped products produced
by processing establishments.
Supplemental Proposed Rule Cost
Estimates for Major Cuts
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For the major cuts, FSIS assumes that
retailers will comply by using POP
placards. The number of retail
establishments affected by the nutrition
labeling requirements for the major cuts
is based on 2002 data from the Bureau
of the Census (Table 3).23 The Census
data are consistent with the
establishment numbers used in the
analysis of nutrition labeling of ground
or chopped products used in the PRIA.
The number of retail establishments
used in the supplemental PRIA is
74,910 (owned by 47,688 firms)
compared to 69,500 (comprised of
supermarkets, other stores, and
wholesale clubs) used in the PRIA (66
FR 4982, January 18, 2001). The use of
the 2002 Bureau of Census data instead
of FMI data (from the PRIA) results in
23 November 2005, more of the 2002 Census data
was released.
24 Flexography printing is frequently used for
printing on plastic foil, acetate film, and other
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205.5
86.6
a higher estimated cost of the POP
requirements in the supplemental
proposed rule. The supplemental PRIA’s
estimate is also higher than the PRIA’s
estimate because in the PRIA, FSIS
assumed retail facilities would incur
labor costs only and would not purchase
frames and placards.
The cost of three nutrition
information placards for displaying POP
information for the major cuts is
estimated to be $65.17 per store ($28.00
for placards and $37.17 for metal
frames), based on information from the
Food Marketing Institute (FMI) and
https://www.hubert.com. Placards will be
replaced every two years because of
normal wear and tear. The supplemental
PRIA estimates that an average of 0.5
hour at labor cost of $21.11 per hour,
per store is the amount of time
necessary to obtain and make available
the POP materials, insert the placards or
posters into frames, and post the
information in the store. The average
labor cost is then $10.16 ($21.11 × 0.5).
The total average cost per store is then
$75.73.
The average total cost of purchasing
and installing posters or placards will
be $5.67 million the first year and every
other year after that ((74,910
establishments × $21.11 per hour × .5
hours) + (74,910 establishments ×
$65.17 per establishment)). The present
value of this cost is $31.07 million when
discounted at 7 percent over 20 years.
Supplemental Proposed Rule Cost
Estimates for Ground or Chopped
Product
Should this rule become final, both
meat and poultry processing firms and
retail establishments will incur
compliance costs associated with
nutrition labeling of ground or chopped
products for such items as label
redesign, nutrition analysis, larger
labels, and upgrading store scale-
material used in packaging. Flexography uses
flexible printing plates made of rubber or plastic.
The inked plates with a slightly raised image are
rotated on a cylinder which transfers the image to
the substrate. Flexography uses fast-drying inks, is
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248.3
145.3
2,176.7
917.8
3,694.4
2,161.0
printers. The following discussion
presents the costs associated with
nutrition labeling ground or chopped
products for meat and poultry
processing firms and for retail firms.
Meat and Poultry Processing Firms
The cost of nutrition labeling of
ground or chopped products packaged
by processing establishments is
comprised of costs for redesigning
preprinted product labels that will
include a nutrition label (one-time cost),
for conducting nutrition analysis on
products to obtain information for the
nutrition label (one-time cost), and for
using larger labels that would be needed
for the former product labels (recurring
cost).
Based on an examination of labels
applied to ground or chopped products
that are labeled at processing
establishments, the most common
printing method for these labels is
flexography.24 Nutrition facts are
typically printed in one color. The perlabel modification estimated midpoint
cost, in 2005 dollars, for a one-color
change using the flexography printing
method is $2,247. The estimated
minimum cost is $1,528, and the
maximum cost is $3,170. Cost depends
upon the complexity of the label design
(Table 12). These estimates reflect
administrative, graphic design, prepress
activities, plate engraving costs, and
nutrition analysis. The paperwork costs
are included in the administrative costs.
FSIS assumes that the paperwork costs
are about 14 percent of the midpoint
estimate administrative costs. Thus, the
midpoint estimate of the paperwork
burden costs would be $44.66 ($319 ×
14 percent) per label modification. The
estimated total per label design
modification cost ranges from a low of
$929 to a high of $2,383 with a
midpoint of $1,557.
a high-speed print process, can print on many types
of absorbent and non-absorbent materials, and can
print continuous papers such as gift wrap and
wallpaper.
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67771
TABLE 12—COSTS PER LABEL MODIFICATION FOR A ONE-COLOR CHANGE USING FLEXOGRAPHY PRINTING METHOD
Type of Cost
Low
Mid-Point
High
Dollars
Administrative1 .............................................................................................................................
Graphic design .............................................................................................................................
Prepress activities ........................................................................................................................
Plate engraving ............................................................................................................................
137
342
279
171
319
513
401
323
502
684
627
570
Total label redesign ..............................................................................................................
929
1,557
2,383
Nutrition analysis 2 .......................................................................................................................
599
690
787
Total ......................................................................................................................................
1,528
2,247
3,170
1 Includes
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regulatory affair costs that are similar to paperwork burden costs.
2 RTI assumed that the cost for nutrition analysis would be the cost associated with analysis required to create a Nutrition Facts panel. Source:
RTI, 2003, P.7.
Although nutrition information for
some ground products will be available
from the USDA National Nutrient
Database for Standard Reference (USDA,
Agricultural Research Service, 2005) or
other low-cost sources, in many cases,
the regulations would require that
companies conduct a separate nutrition
analysis for ground or chopped products
for which the USDA National Nutrient
Database for Standard Reference or
other sources have not provided
nutrition information. Because of the
large variety of ground product
formulations, many products will not
likely be the same or similar enough to
the products for which the USDA
National Nutrient Database for Standard
Reference or other sources provide
nutrition information. Because FSIS
could not identify the number of ground
or chopped products that would require
a separate nutrition analysis versus the
number of products for which the USDA
National Nutrient Database for Standard
Reference or other sources supply
complete nutrition information, FSIS
estimated a one-time nutrition analysis
cost for all ground or chopped products.
The per-label cost of this analysis is in
the range of $599 and $787, with an
average of $690. On average, the Agency
assumed that total label design will be
$1,557, and a nutrition analysis will be
$690.
Nutrition labels are designed for
company-wide use. The number of
affected companies is estimated by
dividing the number of small and large
establishments in Table 1 by three, the
number of establishments owned on
average by multi-establishment firms
(Muth, 2003; See RTI analysis). Thus,
the final estimate of the number of
affected firms that own small or large
Federal processing establishments that
grind meat is 322 ((858 small processing
establishments + 109 large processing
establishments)/3). For the purposes of
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this analysis, very small establishments
are considered to be exempt from the
requirements for nutrition labeling of
ground or chopped products because
FSIS assumes they have fewer than 500
employees, are owned by companies
with fewer than 500 employees, and
FSIS assumes they produce 100,000
pounds or less annually of each ground
product. The PBIS database does not
include data on size of the owning
company or processed product volumes.
Thus, the total number of
establishments affected by the rule for
this analysis may be overestimated. In
addition, this analysis includes 41 State
establishments/firms that are smallsized. These firms were identified in
PBIS database as having grinding
operations that would produce ground
or chopped products.
AC Nielsen Food Purchase data from
2003 and Information Resources Inc.
(IRI) were used to identify ground meat
and poultry products with or without
added seasonings. The purchase data
include data for frozen and fresh,
ground or chopped products affected by
the final nutrition labeling rule. The
information shows that an average of 3.3
frozen ground meat or poultry products
are produced by companies that grind
meat and poultry. The data were then
scaled to account for the total number
of ground or chopped products by
assuming that a typical company
produces an equal number of fresh and
frozen ground meat or poultry products.
Therefore, multiplying 3.3 × 2 results in
an average of 6.6 products per firm and
2,396 unique meat and poultry products
(6.6 × 363 firms) that are subject to the
labeling requirements of the rule.
The one-time, average cost for meat
and poultry establishments to modify
product labels on prepackaged ground
meat and poultry products to include
nutrition information at processing
establishments is estimated at $5.38
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million ($2,247 mid-point per label
modification costs × 363 affected
companies × 6.6 affected products per
company). The average present value of
this one time cost discounted over 20
years at 7 percent is $5.03 million.
In addition to the one-time costs of
designing labels, companies will also
incur costs for providing larger labels.
The cost of larger labels was obtained by
estimating the volume of ground meat
and poultry products packaged by
processors and multiplying the results
by the incremental cost of larger labels.
The cost of applying larger labels is
assumed to be the same as the cost of
applying smaller labels.
The NCBA’s Meat Purchase Diary
(RTI, 2003) indicates that an average
American household purchases 49.3
pounds of raw ground beef annually
from retail stores. Based on 112.0
million households in the United States
(U.S. Department of Commerce, 2003),
5.5216 billion pounds (49.3 pounds per
household × 112 million households) of
ground beef are purchased from retail
stores annually. The American Meat
Institute estimates that 0.123 pounds of
other ground meat and poultry products
are consumed for every pound of
ground beef. Consequently, an estimated
6.201 billion pounds of ground or
chopped meat and poultry (5.5216
billion pounds × 1.123 scale factor) are
purchased by consumers annually (66
FR 4987, January 18, 2001).
According to the NCBA, the average
weight of a retail package is 2.735
pounds, with a distribution of 1.17
pounds at the 5th percentile and 4.35
pounds at the 95th percentile
(McGowan, 2003). Dividing 6.201
billion pounds by 2.735 pounds per
package yields an average of 2.267
billion packages of ground or chopped
products sold at retail stores annually.
To determine the total number of
packages sold at ‘‘exempt’’
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establishments, the Agency, using U.S.
Census 2002 data, FSIS found that 79.3
percent of total dollar sales by
supermarkets, meat markets, and
warehouse stores were sold by
establishments owned by large retail
firms and establishments (500 or more
employees). These large retail firms and
establishments (266) represent 0.006 of
the total number of retail firms and
establishments (47,688) affected by the
rule as shown in Tables 4 and 5 above.
Assuming that the percentage of total
dollar sales is similar to sales for ground
meat and poultry products, about 1.798
billion packages (2.267 billion packages
× .793) of ground or chopped products
are sold each year by nonexempt
processing establishment and retail
establishments.
Finally, a study conducted by NCBA,
found that less than 25 percent of
ground products are packaged by
processing establishment (Dopp, 2001).
Thus the Agency estimates that at most
566.75 million packages of ground or
chopped products are packaged by
processing establishments each year
(2.267 billion packages × .25).
The Agency assumes that a larger
label will cost an additional $0.005 per
label, on average. This estimate was
based on information from the FDA
Labeling Cost Model (Muth, et al. 2003),
where $0.005 was the difference in cost
between the low and high cost estimates
for pressure-sensitive labels. This
estimate was evaluated by Hobart, a
label manufacturer, who believed that it
was reasonable (Schuller, 2003).
Multiplying 566.75 million packages by
the annual added cost of $0.005 per
label results in an added cost of
approximately $2.83 million, annually.
The present value of these annual costs
discounted at 7 percent is $30.02
million.
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Retail Firms
The cost of nutrition labeling would
also affect retail stores. But because of
the small business exemption, fewer
retail stores are affected by the
requirements for ground and chopped
products than the 74,910 establishments
shown in Table 3. Using U.S. 2002
Census data shown earlier in Table 4, a
total of 23,479 stores will be affected.
Table 4 shows the number of retail
stores that are owned by companies
with more than 500 employees. FSIS
assumes that stores or chains with 500
or fewer employees produce 100,000
pounds or less annually of each ground
or chopped product and are, therefore,
exempt from the nutrition labeling
requirements for ground or chopped
products.
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Should the rule become final, retail
establishments subject to the
requirements of the rule may comply by
either incorporating nutrition
information on the label printed by store
scale printer systems (Option 1) or by
applying an additional preprinted label
with nutrition information (Option 2).
The cost of store-printed labels includes
upgrading store scale-printers to include
nutrition information, redesigning larger
store labels, providing a nutrition
analysis for each product, and using
larger labels. Based on information from
NCBA and FMI (Amstein, 2003) many
scale-printers in retail establishments do
not have the capability to print nutrition
information on store-generated labels
without an upgrade of memory capacity
and software and either new printers or
new printer heads. Based on a pilot
study conducted by King Marketing
Services, Inc., for the NCBA, the average
cost to upgrade a scale-printer system in
their study was $1,600 (Amstein, 2003).
FSIS assumes that, on average, retail
stores have 1.5 scales in their meat
departments. Thus the total cost for
upgrading printer-scale systems is
assumed to be about $2,400 per store
($1,600 per printer × 1.5 printers). The
total average cost to upgrade printer
scales to provide store-printed labels for
ground or chopped products is
estimated at $56.35 million (23,749
retail establishments × $2,400 per
establishment). The analysis assumes
that scales with the added features for
making store-printed labels are replaced
every five years. The annual
maintenance costs for an upgraded
scale-printer is estimated to be 6 percent
of $2,400 or $144 ($2,400 × .06) every
year after a scale-printer has been
purchased.25 26
The cost of redesigning larger store
logo labels to be used with the scaleprinter systems was based upon cost
data from the FDA Labeling Cost Model
and Census data on the number of large
companies that own retail
25 Based upon a communication between
Warranty Department, Hobart Corporation, Troy,
Ohio, and Gary Becker, USDA, FSIS, September 4,
2003, and a second communication between Sales
Department, Hobart Corporation, Beltsville,
Maryland, and Gary Becker, USDA, FSIS,
September 4, 2003. The suggested retail price for a
Quantum scale-printer is between $5,500 and
$6,000. A one-year maintenance agreement would
cost about $355. Therefore, it has been estimated
that operating and maintenance costs would be
about six percent of the purchase price annually
($355/$5,750 = 6%).
26 It is possible that as new scale-printer systems
are developed that the cost of including the added
feature to new scale-printer systems may be less
than $1,600 per scale. But to assume, as RTI
reported, that there is no additional cost for these
added features in the future results in an
underestimate of the compliance costs.
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establishments. As for preprinted labels,
flexography is the most common
printing method for the store logo labels
used with scale printer systems. The
cost to make a one-color label redesign
change depending on the complexity of
the label redesign ranges from a
minimum of $929, an average of $1,557,
and a maximum of $2,383, as shown in
Table 12.27 Because each company will
need to redesign only one label, the
average cost was multiplied by the 266
firms affected by the rule. The average
one-time cost estimates for redesigning
labels is $0.414 million ($1,557 per label
design × 266 firms). The average onetime cost estimate for the paperwork
costs (average regulatory affairs costs of
$319 × 14 percent = $44.50) of
redesigning labels is $11,837 ($44.50 ×
266 firms). As with products packaged
by processors, label redesign can not
simply be incorporated into the normal
label redesign process because it is a
fundamental change in the label format.
Once the label is redesigned, the costs
of subsequent label redesigns will not be
affected substantially.
To estimate the cost of conducting
nutrition analysis for ground or
chopped products packaged by retailers,
the number of unique products was
estimated. It was assumed that each firm
(or parent company) would conduct a
nutrition analysis once for each unique
product, which might be sold in some
or all of their retail facilities. The
number of firms shown in Table 4 was
multiplied by an average number of
store-brand products packaged at each
store. To estimate the average number of
ground or chopped products packaged
at retail, the number of ground or
chopped products with store-applied
packaging at six different grocery stores
and three wholesale clubs was
counted.28 This analysis showed that
grocery stores sell an average of 4.57
ground or chopped products and
warehouse stores sell an average of 1.33
ground or chopped products packaged
at the store. Multiplying 4.57 by the
total number of grocery store firms and
meat market firms and multiplying 1.33
by the total number of warehouse club
firms in Table 4 results in 1,180 ((4.57
products × 255 grocery store and meat
market firms) + (1.33 × 11 warehouse
club firms))29 unique products that will
27 Package redesign varies depending upon what
must be changed on the current label. Therefore,
three estimates have been provided.
28 Each store visited by RTI was owned by a
different company and included medium and large
sized stores. No meat markets were visited because
RTI believed that no meat markets owned by
companies large enough to be affected by the
labeling requirements are located in the RaleighDurham area.
29 Numbers are rounded.
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require nutrition labels applied in retail
stores. FSIS recognizes that a survey of
six grocery stores and three wholesale
clubs in one U.S. city is not a nationally
representative survey. Because of
limited time and Agency resources,
information from this survey provided
the best available data for FSIS’s
estimates. Although this is a significant
area of uncertainty in the cost analysis,
FSIS believes these data allow for
reasonable estimates of the costs to
retailers.
Using the cost of a nutrition analysis
shown in Table 12 above, and the
number of unique products that will
require nutrition labels applied in retail
stores the average cost estimate is $2.65
million ($2,247 × 1,180 unique
products).
The use of larger labels is another cost
that retail stores may incur should the
rule become final. The cost of larger
labels is the product of the number of
packages of ground or chopped products
sold in retail establishments and the
cost of using a larger label. Earlier in the
analysis, it was estimated that about 25
percent of approximately 2.267 billion
packages or about 566.79 million
packages of ground or chopped products
are packaged by processing
establishments each year. If the
remaining 75 percent of total package
volume of ground or chopped products
is packaged at retail stores, then 1.700
billion packages (2.267 billion × .75) are
packaged by retail stores annually. If the
added average cost of each label is
$0.005, then retail stores will incur an
added cost of about $8.5 million (1.7
billion packages × $0.005).30
FSIS estimates that based on the
analysis described above, the resulting
average present value of one-time costs
of upgrading scale-printer systems,
added annual operating and
maintenance costs for the scale-printer
systems, one-time costs for redesigning
larger store labels, one-time costs for
conducting nutrition analysis, and
present value costs for using a larger
label will be about $209.43 million
discounted at 7 percent.
The cost of the second method of
complying with the labeling
requirements for ground or chopped
products at retail stores (Option 2)
includes designing a one-color nutrition
30 The Agency assumed an average cost of $0.005
per label for a larger label because it represents the
change in cost between low, midpoint, and high
cost estimates for pressure-sensitive labels in the
FDA Labeling Cost Model (Appendix B). The
differences in the low, midpoint, and high cost
estimates derive primarily from the differences in
the size of labels. Second, a representative from
Hobart, which manufactures labels, says that $0.005
was a reasonable estimate for the added cost of a
larger label for including nutrition facts.
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14:59 Dec 17, 2009
Jkt 220001
label, conducting a nutrition analysis for
each product, and purchasing and
applying a separate label on packages of
ground or chopped products applied at
the retail level. Using the same
methodology that was described earlier,
it is estimated that 1,180 unique
products will be required to have
nutrition labels applied in retail stores.
Multiplying the number of unique
products by the average per-label
redesign and nutrition analysis costs
(the cost of flexography is $2,470),
results in a one-time cost estimate of
$2.65 million (1,180 unique products ×
$2,247 per label design).
To estimate the cost of purchasing
and applying labels to packages of
ground or chopped products packaged
at retail, the per-unit cost estimates from
the FDA Labeling Cost Model were
multiplied by the volume of packages
described earlier.31 FSIS estimates the
annual cost using the average cost of
$0.0293 per label applied. The
estimated annual cost is $49.77 million
($0.0293 per label and application cost
× 1.452 billion retail packages). All of
these costs will be incurred by large and
small businesses. The present value of
these costs is $452.83 million when
discounted at 7 percent.
Percentage Lean/Percentage Fat
Labeling
In the PRIA, FSIS assumed that the
cost per label to provide information
regarding percent lean/percent fat
would be comparable to those costs for
nutrition labeling, $0.0025 to $0.05 per
label, if that information was included
as part of the price label and $0.01 per
label if producers developed separate
percent fat/percent lean labels. Based on
the National Cattleman’s Beef
Association National Meat Case Study
in 2004, approximately 25 percent of
ground beef package labels surveyed
had statements of the lean percentage of
the packaged products but did not have
nutrition facts panels. Therefore, FSIS
assumed that many small businesses
may currently include a statement of the
lean percentage on the label of ground
products but may not include nutrition
facts panels on the product label. Based
on this assumption, FSIS concluded that
requiring small businesses that use the
lean percentage and fat percentage
statement on the label of ground
products to also include nutrition
information on the label of such
products may result in significant
expenses for small businesses. An
31 The Agency estimated the low, mid-point, and
high per-unit cost for purchasing and applying onecolor pressure-sensitive labels in 2005 dollars to be
$0.016, $0.0293, and $0.042, respectively.
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additional 47,422 small businesses with
an additional 51,431 retail
establishments (stores) (see Table 5)
may be affected. Based on the FSIS cost
model (see Appendix B), this may
increase the present value (7 percent) of
average expenses for small businesses
by about $394.16 million or by about
$37.21 million when annualized (7
percent). Therefore, in this
supplemental proposed rule, small
businesses that use statements of
percent fat and percent lean on the label
or in labeling of ground products will be
exempt from nutrition labeling
requirements, provided they include no
other nutrition claims or nutrition
information on the product labels or
labeling. FSIS is taking this action,
pursuant to 5 U.S.C. 604(a)(5), to
minimize the significant impact of the
regulation on small and very small
establishments and small retailers. By
taking this action, many of these small
businesses will not be affected by this
rule at all.
Summary of Cost Estimates
FSIS estimates that the average
present value of the compliance costs
associated with the provisions of the
supplemental proposed rule for retail
and processing establishments is
$348.06 million discounted at 7
percent,32 or $472.23 million
discounted at 3 percent 33 (see tables 13
and 14). The average annualized costs
are $32.85 million and $31.74 million,
based on a 7 percent and 3 percent
discount rate, respectively. These
estimates are based on the assumption
that retail stores will choose the less
costly of the two options which would
be to upgrade their scale-printer
systems, redesign larger store labels,
conduct a nutrition analysis, and use
larger labels. If these retail
establishments choose the more costly
option, the average present value cost to
retail processing establishments could
be as high as $599.64 million,
discounted at 7 percent and $838.40
million, discounted at 3 percent.
The average present value cost of the
supplemental proposed rule for retail
establishments under option 1 would be
32 The FSIS analysis which takes into account the
uncertainty associated with various cost factors
shows that the values at the 5th and 95th
percentiles for this average present value using a 7
percent discount rate and 20 year time horizon are
$282.88 and $474.79 million, respectively. See
Appendix D, Table 1.
33 The FSIS analysis which takes into account the
uncertainty associated with various cost factors
shows that the values at the 5th and 95th
percentiles for this average present value using a 3
percent discount rate and 20 year time horizon are
$380.76 and $650.23 million, respectively. See
Appendix D, Table 1.
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$312.77 million using a 7 percent
discount rate and $424.53 million using
a 3 percent rate. However, under Option
2, the average present value cost to retail
establishments could be $564.36 million
discounted at 7 percent and $790.70
million discounted at 3 percent.
Processing establishments will incur
the smallest portion of the cost
increases. FSIS expects average present
value costs to processing establishments
costs to be $35.28 million discounted at
7 percent and $47.70 million discounted
at 3 percent.
TABLE 13—COST SUMMARY OF THE SUPPLEMENTAL PROPOSED RULE (NOMINAL)
Year
Measure
1
2
3
4
5
6–10
11–20
Total
$ Million
Retail: Purchase & Install POP Placards .................................................
Processing: Modify Labels on Prepackaged Ground or Chopped
Products .........................................
Processing: Larger Labels on Ground
or Chopped Products .....................
Retail : (Option 1 ................................
Retail: (Option 2) ................................
Total Retail: (Option 1 and POP Placards) ...............................................
Total Retail: (Option 2 and POP Placards) ...............................................
Total All Processing Plants ................
Total Retail: (Option 1 and POP Placards) and Processing .....................
Total Retail: (Option 2 and POP Placards) and Processing .....................
5.67
0.0
5.67
0.0
5.67
11.35
28.36
56.73
5.39
0.0
0.0
0.0
0.0
0.0
0.0
5.39
2.42
69.91
45.13
2.42
12.33
42.51
2.42
12.33
42.51
2.42
12.33
42.51
2.42
12.33
42.51
12.10
118.01
212.55
24.21
236.03
425.10
48.41
473.29
852.86
75.58
12.33
18.01
12.33
18.01
129.36
264.39
530.01
50.83
7.81
42.51
2.42
48.18
2.42
42.51
2.42
48.18
2.42
223.90
12.10
453.47
24.21
909.58
53.80
83.39
14.75
20.43
14.75
20.43
141.46
288.60
583.81
58.64
44.93
50.60
44.93
50.60
236.00
477.67
963.38
11–20
Total
TABLE 14—COST SUMMARY OF THE SUPPLEMENTAL PROPOSED RULE (DISCOUNTED)
Year
Measure
1
2
3
4
7% Discount Rate
5.30
0.0
4.63
0.0
4.04
6.62
10.47
31.07
5.04
0.0
0.0
0.0
0.0
0.0
0.0
5.04
2.26
65.37
42.23
2.11
10.77
37.11
1.98
10.06
34.69
1.85
9.41
32.44
1.73
8.79
30.31
8.64
73.58
124.36
7.08
89.91
151.80
30.24
281.70
533.29
70.67
10.77
14.69
9.41
12.84
80.20
100.38
312.77
47.53
7.71
37.11
2.11
39.32
1.98
32.44
1.85
34.35
1.73
130.88
7.08
162.28
8.64
564.36
35.28
79.60
12.88
16.67
11.26
14.56
87.27
109.03
348.06
62.34
39.22
41.29
34.28
36.08
137.95
170.92
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3% Discount Rate
$ Million
Retail: Purchase & Install POP Placards ...................................................
Processing: Modify Labels on Prepackaged Ground or Chopped Products ...................................................
Processing: Larger Labels on Ground
or Chopped Products .......................
Retail: (Option 1) ..................................
Retail: (Option 2) ..................................
Total Retail: (Option 1 and POP Placards) .................................................
Total Retail: (Option 2 and POP Placards) .................................................
14:59 Dec 17, 2009
6–10
$ Million
Retail: Purchase & Install POP Placards ...................................................
Processing: Modify Labels on Prepackaged Ground or Chopped Products ...................................................
Processing: Larger Labels on Ground
or Chopped Products .......................
Retail: (Option 1) ..................................
Retail: (Option 2) ..................................
Total Retail: (Option 1 and POP Placards) .................................................
Total Retail: (Option 2 and POP Placards) .................................................
Total All Processing Plants ..................
Total Retail: (Option 1 and POP Placards) and Processing .......................
Total Retail: (Option 2 and POP Placards) and Processing .......................
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5.51
0.0
5.19
0.0
4.90
8.96
18.27
42.82
5.23
0.0
0.0
0.0
0.0
0.0
0.0
5.23
2.35
67.88
43.85
2.28
11.63
40.09
2.21
11.28
38.90
2.15
10.95
37.75
2.09
10.64
36.69
9.56
95.87
167.87
13.36
154.06
269.77
42.46
381.72
747.88
73.39
11.63
16.48
10.95
15.54
104.82
172.32
424.53
49.36
40.09
44.09
37.75
41.59
176.83
288.04
790.70
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TABLE 14—COST SUMMARY OF THE SUPPLEMENTAL PROPOSED RULE (DISCOUNTED)—Continued
Year
Measure
1
Total All Processing Plants ..................
Total Retail: (Option 1 and POP Placards) and Processing .......................
Total Retail: (Option 2 and POP Placards) and Processing .......................
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5
6–10
11–20
Total
2.21
2.15
2.09
9.56
15.36
47.70
82.66
13.91
18.69
13.10
17.63
114.38
187.68
472.23
64.74
42.37
46.30
39.90
43.67
186.39
303.40
838.40
FSIS did not reduce the compliance
costs of the supplemental proposed rule
to take into account the level of
voluntary compliance with the nutrition
labeling requirements for ground or
chopped products that currently exists.
Consequently, the estimated compliance
costs for providing nutrition labeling of
ground or chopped products are
overstated. However, Appendix C,
Tables 1, 2, 3, 4, and 5 show the
estimated costs which take into account
a 68 percent compliance rate (NCBA,
2004) of voluntary nutrition labeling of
ground or chopped products that is
currently assumed to exist.
FSIS estimated the costs to all
retailers of obtaining and displaying
POP information for major cuts. FSIS
did not take into account the existing
level of compliance with the voluntary
guidelines for nutrition labeling of
major cuts. Consequently, the estimated
compliance costs for providing POP
nutrition information are also
overstated. The impacts of a 54.8
percent level of voluntary compliance
(USDA, 1999) of stores that provide
nutrition labeling for major cuts are,
however, shown in Appendix C, Tables
1, 2, 3, 4, and 5.
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2.28
Impacts of Exemptions and Existing
Compliance on Costs
14:59 Dec 17, 2009
3
8.00
The average cost increases that FSIS
has identified are higher than those
estimated by RTI in their revised final
report to FSIS. RTI had estimated the
present value cost to be $159.0 million
discounted at 7 percent under Option 1.
RTI had also estimated the present value
cost to be $396.7 million discounted at
7 percent under Option 2. The FSIS
estimates are higher than the RTI
estimates because FSIS believes that
scale-printers will have to be replaced
periodically since they have a limited
useful life. This equipment will also
have to be maintained on a periodic
basis. In addition, the costs are higher
because the costs were updated to
reflect 2005 costs instead of 2003 costs.
Also, the U.S. Census 2002 data was
used that indicated that there are more
stores selling food products.
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2
Appendix D, Table 1 provides a
summary of the present value costs of
the rule after taking into account the
levels of voluntary compliance that are
currently assumed to exist. The average
present value costs of the rule decline
to $115.45 million and $156.72 million
when using a 7 percent and 3 percent
discount rate, respectively.34
Impact on Estimated Costs
The estimates of the total
undiscounted compliance costs of the
final requirements for ground or
chopped product and POP requirements
for major cuts are $583.81 million under
Option 1. The average present value cost
is $348.06 million at 7 percent, with all
but $31.07 million attributed to the
labeling costs for ground or chopped
product. The average annualized cost of
the supplemental proposed rule for
ground or chopped product, using the
same 7 percent discount rate, is $32.85
million. This cost is not significant
relative to the volume of output of
ground or chopped products sold at
retail. For example, as noted earlier, the
annual volume of these products sold at
retail stores is estimated at 6.2 billion
pounds. Therefore the annualized cost
of the supplemental proposed rule per
pound of ground or chopped product is
$0.0053 ($32.85 million/6.2 billion
pounds). Viewed another way, it was
estimated earlier that the average weight
of a retail package was 2.735 pounds.
Therefore the annualized average cost of
the supplemental proposed rule on a per
package basis is $0.014 ($0.0053 per
pound × 2.735 pounds per package).
This increase compares to a price for
ground beef that can easily exceed $2.00
per pound or over $5.00 for an averagesize package.
Should the rule become final, FSIS
believes that the compliance costs of the
34 The FSIS analysis which takes into account the
uncertainty associated with various cost factors
shows that the values at the 5th and 95th
percentiles for this average present value using a 7
percent discount rate and 20 year time horizon are
$94.72 and $155.97 million, respectively. The
values at the 5th and 95th percentiles of the present
value cost distribution using a 3 percent discount
rate are $127.63 and $213.60 million, respectively.
See Appendix D, Table 1.
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rule largely will be passed on to
consumers in the form of higher product
prices because the demand for meat and
poultry products is inelastic. Huang
(1993) analyzed a group of meats and
other animal proteins consisting of
products including beef and veal, pork,
other meats, chicken, turkey, fresh and
frozen fish, canned and cured fish, eggs,
and cheese. He concluded that the price
elasticity of demand for this group of
products was (¥0.3611), i.e., a one
percent increase in price for one of these
products would reduce demand by only
0.3611 percent.
Review of about a dozen recent
studies annotated by William Hahn
(1996) of the Economic Research Service
reveals that estimates of price elasticity
of demand for most beef products
(ground beef, steak, chuck roast, etc.) is
less than one. Consequently, consumers
are unlikely to reduce their demand for
beef, ground meat products, etc.,
significantly when beef prices increase
a few pennies per pound. Some
consumers may demand labeled
products, even at a higher cost per
pound, given the value of the
information from a diet/health
perspective.
2. Supplemental Proposed Rule Benefit
Analysis
Research Findings
FSIS conducted an extensive search of
research on the impacts of nutrition
labeling and consulted with the
Economics Research Service, USDA on
the estimation of benefits. FSIS has
found that there are a limited number of
nationally representative studies on the
effect of nutrition label and POP
nutrition information use on dietary
intakes. In these studies, the authors
frequently examine consumer behavior
before and after a significant change in
the availability of nutrition labeling
information (e.g., Nutrition Labeling and
Education Act (NLEA) implementation
and relaxation on the prohibition of
health claims). The general conclusion
of the available research is that there is
a positive relationship between the
availability of nutrition information and
improvements in diet quality.
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Research by Kim, et al. used USDA’s
Continuing Survey of Food Intake by
Individuals, 1994–96 (CSFII) and the
associated Diet Health Knowledge
Survey (DHKS) to evaluate the impact of
nutrition labels required by the NLEA
on consumer label use and intake of
selected nutrients. They used an
econometric model to evaluate the
effects of nutrition label usage by
comparing the nutrient intake of label
users with the expected intake of the
label user in the absence of labels. For
those who use nutrition facts
information, the intake of calories from
total fat, saturated fat, cholesterol, and
sodium decreases by 6.9 percent, 2.1
percent, 67.6 mg, and 29.58 mg
respectively.
However, measuring the effectiveness
of nutrition labels on dietary intake is
complicated by the relationship
between label reading and other factors
that also affect diet. For example,
consumers with high levels of
knowledge and concern about nutrition
are likely to eat a healthier diet than
consumers who are less concerned
about nutrition; they are also more
likely to read labels and use labels to
guide their diet. A recent study Variyam
(2008) uses the same dataset as Kim et
al. (2000) and finds that the labels
increase only fiber and iron intakes of
label users compared with label
nonusers. The author notes that in
comparison, a model that does not
account for self-selection implies
significant label effects for all but two of
the 13 nutrients that are listed on the
NFP. Below we provide some
information from other studies that
show an association between nutrition
label and improved diet. However, we
note that these studies did not account
for the potential self-selection problem
and may overstate the effectiveness of
nutrition labeling in improving diet. In
addition, none of these studies directly
assessed the consumer responses to
labeling on raw meat products.
Neuhouser, et al. 1999, analyzed data
from a survey of 1,450 adult residents in
Washington State. The survey assessed
nutrition label use, fat-related diet
habits, fruit and vegetable consumption,
diet-related psychological factors, health
behavior and demographic
characteristics. They concluded that
nutrition label use was significantly
associated with lower fat intake and,
after controlling for all demographic,
psychosocial, and behavioral variables,
nutrition label use explained 6 percent
of the variance in fat intake, with a
probability of 99.9 percent.
Teisl and Levy in 1997 conducted a
3-year study on the direct effects of
nutrition shelf label information on
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consumer purchasing behavior. Shelf
labels containing nutrition information
were found to have small but significant
effects on consumer dietary patterns.
The study also found that providing
nutrition information may allow
consumers to more easily switch
consumption away from ‘‘unhealthy’’
products in food categories where
differences in other quality
characteristics, such as taste, are
relatively small toward consumption of
products in food categories where the
difference in taste between the more and
less fatty products may be relatively
large. The type and format for the
nutrition information used in the study,
brand specific nutrition information
provided on the shelf in conjunction
with the products’ unit and item price
information, may help to explain the
results. This research shows that the
main effect of the nutrition shelf
labeling program occurred relatively
quickly. The authors attribute this
response, in part, to ancillary activities
efforts, such as measures to enhance
consumer health education, occurring as
part of the initial nutrition labeling
program being evaluated.
Related research conducted by Teisl,
Bockstael, and Levy in 2001 found that
the provision of nutrition information
led consumers to change purchase
behavior, but may not necessarily lead
to their buying more ‘‘healthy’’ foods.
They conclude that consumer responses
to nutrition labeling may take two
forms: a ‘‘health’’ effect and a
‘‘substitution’’ effect. The first arises
when consumers reduce net intake of
‘‘unhealthy’’ nutrients and increase
purchases of ‘‘healthy’’ foods. The
second effect occurs when consumers
increase their level of satisfaction by
substitution across food categories using
nutrition information to maintain an
overall level of health risk while
increasing satisfaction from other food
attributes, such as flavor. They also note
that economic analyses that identify the
benefits of health risk reduction as the
costs of foregone illness may understate
the overall benefits of nutrition labeling.
They assert that consumer welfare is
improved (and, therefore, there is a
willingness to pay for nutrition
information) even if health risks are not
reduced because consumers make food
choices more in line with non-health
preferences about food attributes.
Research by Moorman in 1996
examined whether the NLEA increased
consumers’ understanding of nutrition
information at the point of sale, whether
understanding of nutrition information
has been promoted regardless of
individual consumer preferences, and
whether understanding of nutrition
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information at the point of sale has
increased for healthful and nonhealthful products. Moorman found
statistically significant increases in
consumers’ nutrition information
acquisition after the NLEA took effect.
Motivated consumers acquired more
information after the law went into
effect than before and even the less
motivated more accurately recalled fat
content after the law went into effect.
The research also found that consumers
retained more information about higher
fat products (defined as those having
more than 5.5 grams of fat per serving)
than they did about lower fat products.
The author made the assessment that
standardized and adequate nutrition
information, as required by the NLEA,
raised awareness of the nutritional
quality of food products, thereby
increasing the focus on higher fat
products. Consequently, the NLEA may
have spurred product competition, even
among high fat products (Aldrich).
Ippolito and Mathios (1995) studied
the effect of an FDA relaxation on a
prohibition against health claims.
Following the decision to allow health
claims on labels in 1985, nutrition
advertising, a form of nutrition
education when such advertising
contains factual information, increased
significantly. While they found that fat
consumption per capita fell prior to the
FDA decision to allow health claims on
labels, it fell at a faster rate after the
prohibition was eased. Their research
also found that prior to when health
claims were allowed, fat consumption
declined among categories of food
whose fat or cholesterol content was
widely communicated: Meat, eggs, and
fats and oils. However, increases in fat
content from other foods largely offset
these consumption declines. After
relaxing the prohibition, people
consumed less fat across more
categories, with less of an increase in
consumption in other categories. The
results suggest that more specific
information about nutritional content of
foods assists consumers in making
healthier food choices within food
categories.
In related research, Mathios and
Ippolito (1998) analyzed the effect of
nutrition information in advertising and
labels on consumption of food cereals
with fiber content. They divided their
study into two periods: The period
1974–1984, when the FDA permitted
printing of fiber content on cereal boxes
but did not permit printing of any
health claims; and the period 1985–
1987, when health claims were
permitted. They concluded that, in
concert with an increase in fiber intake
of cereals in their diets, the average
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intakes of fat, saturated fat, and dietary
cholesterol for both men and women
declined during both the periods, albeit
the decline was greater during the
second period relative to the first. They
concluded that the increase in fiber and
the decrease in fat and cholesterol
consumption were associated with the
consumption of labeled cereals.
Although the self-selection issue
noted above complicates the precise
measurement of the incremental impact
of labeling, the results of the studies
identified above suggest there may be a
positive link between nutrition label use
and dietary change beyond that
resulting from healthier eating habits of
those who regularly rely on nutrition
labels.
Consumer Response to Nutrition
Labeling
FSIS consulted with ERS to develop
the empirical analysis of the benefits of
nutrition labeling for the proposed rule
(Crutchfield, et al., 2001b). The
estimated benefits take the form of
reductions in the incidence of coronary
heart disease and three types of cancer
that may accrue as consumers improve
their diet quality through increased use
of nutrition information generated by
the regulation.
As will be shown, survey data on
nutrient intake and label use were used
to correlate intake of fat, saturated fat,
and cholesterol with usage of existing
nutrition information. The Agency
estimated the value of the potential
changes from intake of fat, saturated fat,
and cholesterol that could occur as
consumers respond to the newly
available nutrition information. A
model developed by Zarkin et al. (1991,
1993) links changes in the serum
cholesterol rate to changes in the
percentage of total calories from
polyunsaturated fat, saturated fat, and
dietary cholesterol. Changes in serum
cholesterol are then used to estimate the
health outcomes, which are reductions
in the number of cases and mortality
from three cancers (breast, colorectal,
and prostate) and coronary heart
disease. Finally, the economic value to
the public health changes were
estimated by assuming an implied value
of life associated with reductions in
premature mortality.
Assumptions were made concerning
consumer behavior to determine how
much of a behavioral response and
change in dietary intake may result from
providing more nutrition information on
meat and poultry products. For
example, when nutrition labels and
other sources of nutrition information
are provided for raw meat and poultry
products, FSIS made the assumption
that nutrition information usage rates
will rise to match nutrition label usage
rates for food products as a whole (Table
15).
TABLE 15—CONSUMER USAGE OF NUTRITION INFORMATION
Often
Men
Use nutrition facts panel ..................................................
Look for nutrition information on raw meat ......................
Sometimes
Women
26.7
16.9
41.7
22.1
Men
Rarely/never
Women
25.6
18.2
32.6
18.0
Men
47.7
62.7
Women
25.6
57.9
Do not buy
Men
Women
n/a
2.2
n/a
2.0
Note: Percent of respondents, based on 3 year weighted averages, 1994–1996. Crutchfield, et al., 2001b.
TABLE 15b—CONSUMER USAGE OF NUTRITION INFORMATION AFTER MANDATORY LABELING FOR RAW MEAT, POULTRY,
AND FISH
Often
Men
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Use nutrition facts panel after mandatory labeling ..........
Using the proportions of men (2.2
percent) and women (2.0 percent) who
report not buying raw meat, poultry or
fish, the new assumed label use
distribution after mandatory labeling is
shown in Table 15b. The percentage of
men who would use the label often to
buy raw meat, poultry, or fish would be
26.1, which is obtained as 0.267*97.8,
where .267 is the proportion of men
who use label often in Table 15 and 97.8
is the percentage of men who buy raw
meat, poultry, or fish.
Currently, some nutrition information
is provided for some single-ingredient,
raw meat and poultry products, but the
information is not currently required.
Mandatory nutrition labeling rules for
the major cuts and ground or chopped
products would mean that the nutrition
information provided for these products
would be comparable to that provided
for other food products. The analysis
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Sometimes
Women
26.1
40.9
Men
Women
25.0
could reasonably assume that nutrition
information usage rates for raw meat
and poultry products would then
become the same as the nutrition label
usage rates for all foods taken together.
For example, before mandatory
nutrition information labeling, the data
show that about 17 percent of men look
for nutrition information on meat
‘‘Often’’ (Row 2 of Table 15). In this
analysis, then, it is assumed that after
mandatory nutrition information
labeling, 26.7 percent of men would use
the nutrition fact panel or POP materials
for meat products, which is the
nutrition label usage rate for all foods
(Row 1 of Table 15). Similarly, the
Agency assumed that the percentage of
women using nutrition information on
meat products ‘‘Sometimes’’ would rise
from 18 percent to 32.6 percent.
To assess the impacts on diet quality,
the Agency assumed in the preliminary
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Rarely/never
31.9
Men
46.7
Women
25.1
Do not buy
Men
2.2
Women
2.0
regulatory impact analysis that as
nutrition information usage rates rise for
consumers eating meat and poultry,
dietary patterns will change in a manner
consistent with current data. However,
Crutchfield et al. (2001b) note that this
is an ‘‘admittedly strong’’ assumption.
As shown above, there is strong
statistical evidence that people who use
nutrition information to guide their food
consumption decisions have healthier
diets. While other factors may be at
work, the Agency made the assumption
that the provision of additional
nutrition information and making that
information available to more
consumers will lead to behavioral shifts
and improved diet quality. Thus, the
assumption is made that the effect of
providing new nutrition information for
meat and poultry products would make
some (not all) consumers who currently
do not look for nutrition information on
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meat and poultry products more aware
of the dietary implications of their food
choices. As these consumers see the
new nutrition labels on packages of
meat and poultry products or new POP
information, they may begin to use the
nutrition label or POP information or to
use it more frequently. Some of these
consumers would then choose to
consume the same mix of products as
people who are currently aware of the
nutritional quality of meat and poultry
products because they look for such
nutrition information as currently is
available. For example, men who
currently do not look for nutrition
information on meat in the absence of
mandatory nutrition information
labeling who would begin using this
information ‘‘Sometimes’’ after nutrition
labeling is in place would see a decrease
in fat intake from 96 grams to 92.5
grams (Row 1 of Table 16). Women who
previously had been using labels
‘‘Sometimes’’ who now use them
‘‘Often’’ would see a decrease in
saturated fat intake from 20.60 grams to
17.39 grams (Row 5 of Table 16). Similar
changes in fat and saturated intakes as
a percentage of total calories can be
assessed from Table 17.
The Crutchfield et al. (2001b) study
simply assumed consistency of behavior
toward label use and changes in diet
quality. Whether the assumption leads
to overstating or understating health
benefits is not known.
Consumers will not use labels to make
very significant dietary changes. If diet
quality associations found with all other
labeled foods do not hold up for
nutrition labels on meat, then health
benefits in the supplemental PRIA are
overestimated. Of course, health
benefits are only one way in which
benefits might be realized. Consumers
might choose to use nutritional
information to enhance enjoyment of
food, and not to raise their health status.
Further, they may be better off than if
they had raised their health status, since
rational consumers will use information
to their best advantage. If we observe
rational, well-informed consumers
selecting a more enjoyable diet, for these
consumers a more enjoyable diet was
worth more than better health. Thus,
when we restrict benefits estimates to
allow only for information to be used to
advance health status, we are
simultaneously restricting estimated
benefits to a lower level of value to
consumers. The FSIS analysis imposes
that restriction and the resulting
benefits estimate must therefore be
interpreted as an underestimate of
overall benefits.
TABLE 16—DIETARY INTAKE OF FAT, SATURATED FAT, AND CHOLESTEROL BY USAGE OF NUTRITION INFORMATION ON
RAW MEAT, POULTRY, OR FISH
Often
Men:
Total fat .........................................................................
Saturated fat .................................................................
Cholesterol ....................................................................
Women:
Total fat .........................................................................
Saturated fat .................................................................
Cholesterol ....................................................................
Sometimes
Rarely/
never
Do not buy
Average
81.64
27.20
311.81
92.49
31.09
321.49
96.09
32.44
355.14
74.48
24.02
236.83
92.51
31.12
339.07
53.90
17.39
194.32
61.70
20.60
219.27
62.18
21.41
216.55
57.23
17.27
135.89
60.16
19.71
210.53
Note: Fat intake in grams, cholesterol in milligrams. Crutchfield, et al., 2001b.
TABLE 17—PERCENTAGES OF CALORIES FROM FAT, SATURATED FAT, BY USAGE OF NUTRITION INFORMATION ON RAW
MEAT, POULTRY, OR FISH
Often
Men:
Total fat .........................................................................
Saturated fat .................................................................
Cholesterol ....................................................................
Women:
Total fat .........................................................................
Saturated fat .................................................................
Cholesterol ....................................................................
Sometimes
Rarely/
never
Do not buy
Average
31.67
10.53
311.81
34.03
11.36
321.49
33.88
11.37
355.14
26.69
9.52
236.83
33.44
11.19
339.07
31.62
10.15
194.32
32.94
10.82
219.27
32.87
10.82
216.55
26.79
9.19
135.89
32.49
10.64
210.53
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Note: Fat and saturated fat values are percentages of total calories; cholesterol in milligrams. Crutchfield, et al., 2001b.
Under these assumptions, then, the
Economic Research Service of the U.S.
Department of Agriculture analyzed
how requirements for mandatory
nutrition information labeling of raw
meat and poultry products could
possibly affect diet quality (Crutchfield,
et al., 2001b). Table 18 shows the
estimated intake of fat, saturated fat, and
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cholesterol, by gender, after adjusting
for the assumed change in patterns of
label use. To reach the values shown in
Table 18, each cell in Table 16 (the
dietary intake of fat, saturated fat, and
cholesterol) was multiplied by the
associated percentage of label use
(nutrition facts panel use) from Table
15. This increased the number of people
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in the ‘‘often’’ and ‘‘sometimes’’ cells,
and decreased the number of people in
the ‘‘rarely/never’’ cells, so that the
distribution of label usage on meat and
poultry products would reflect the
distribution of label usage on all
products.
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67779
TABLE 18—CHANGE IN INTAKE DUE TO INCREASED LABEL USAGE
Intake prior to
mandatory labeling for meat &
poultry
Decreased intake
92.51
31.12
339.1
91.31
30.69
335.0
1.3%
1.37%
4.12
60.16
19.71
210.5
Men:
Total fat .................................................................................................................
Saturated fat .........................................................................................................
Cholesterol ............................................................................................................
Women:
Total fat .................................................................................................................
Saturated fat .........................................................................................................
Cholesterol ............................................................................................................
Intake after adjusting for increased
label usage
58.57
19.45
208.2
2.65%
1.32%
2.37
Note: Fat intake in grams, cholesterol in milligrams. Fat and saturated fat intake changes are in percentage terms, cholesterol intake changes
are absolute changes in milligrams. (Crutchfield, et al., 2001b.)
Applying these new label use
percentages of men and women to their
intakes in Tables 18 and 19, the new
estimated changes in intakes, after
accounting for non-buyers, are reported
in Tables 18b and 19b.
TABLE 18b—CHANGE IN INTAKE DUE TO INCREASED LABEL USAGE, ASSUMING THAT THE PERCENTAGE OF NON-BUYERS
REMAINS UNCHANGED
Intake prior to
mandatory labeling for meat &
poultry
Note that the second column in Table
18b is computed as the weighted
average of intakes from Table 16, using
the percentages in Table 15 as weights.
For example, for the total fat intake of
90.94
30.55
335.0
1.7%
1.83%
4.1
60.16
19.71
210.5
men, 81.64 *.261 + 92.49 *.25 + 96.09
*.467 + 74.48 *.022 = 90.94.
Aggregating across categories, a new
weighted average intake is obtained,
which could be seen after the
imposition of mandatory labeling
Decreased intake
92.51
31.12
339.1
Men:
Total fat .................................................................................................................
Saturated fat .........................................................................................................
Cholesterol ............................................................................................................
Women:
Total fat .................................................................................................................
Saturated fat .........................................................................................................
Cholesterol ............................................................................................................
Intake after adjusting for increased
label usage
58.54
19.40
210.52
2.69%
1.57%
¥0.02
requirements. Table 19 shows the
percentage of calories from fat and
cholesterol intake that were derived in
a similar manner using intakes from
Table 17.35
TABLE 19—CHANGE IN PERCENTAGE OF CALORIES FROM FAT AND CHOLESTEROL INTAKE DUE TO INCREASED LABEL
USAGE
Intake prior to
mandatory labeling for meat &
poultry
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Men:
Total fat .................................................................................................................
Saturated fat .........................................................................................................
Cholesterol ............................................................................................................
Women:
Total fat .................................................................................................................
Saturated fat .........................................................................................................
Cholesterol ............................................................................................................
Intake after adjusting for increased
label usage
Decrease in
intake
33.44
11.19
339.1
33.33
11.14
335.0
0.11
0.04
4.12
32.49
10.64
210.5
32.37
10.54
208.2
0.11
0.10
2.37
Note in Table 19 that fat intake is in
grams, and cholesterol is in milligrams.
Further, fat and saturated fat intake
changes are in percentage terms, and
cholesterol intake changes are absolute
changes in milligrams. (Crutchfield, et
al., 2001b).
35 The calculations in Tables 18 and 19 ignore the
fact that 2.2% of men and 2% of women report not
buying meat, poultry or fish (Table 15). If these
proportions are assumed to remain unchanged after
mandatory labeling, then the decrease in intakes
estimated in Tables 18 and 19 would be slightly
different.
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TABLE 19b—CHANGE IN PERCENTAGE OF CALORIES FROM FAT AND CHOLESTEROL INTAKE DUE TO INCREASED LABEL
USAGE, ASSUMING THAT THE PERCENTAGE OF NON-BUYERS REMAINS UNCHANGED
Intake prior to
mandatory labeling for meat &
poultry
Decrease in intake
33.44
11.19
339.1
33.19
11.11
335.0
0.25
0.08
4.1
32.49
10.64
210.5
Men:
Total fat ...............................................................................................................
Saturated fat .......................................................................................................
Cholesterol ..........................................................................................................
Women:
Total fat ...............................................................................................................
Saturated fat .......................................................................................................
Cholesterol ..........................................................................................................
Intake after adjusting for increased
label usage
32.23
10.50
210.52
0.26
0.14
¥0.02
Note: Fat and saturated fat intake changes are in percentage terms, cholesterol intake changes are absolute changes in milligrams.
Applying these new label use
percentages of men and women to their
intakes in Tables 18 and 19, the new
estimated change in intakes, after
accounting for non-buyers, are reported
in Tables 18b and 19b.
Comparing Table 18b with Table 18
and Table 19b with Table 19, it can be
seen that when the proportions of nonbuyers are assumed to remain
unchanged, the estimated decrease in
intakes of fat and saturated fat are
higher, decrease in cholesterol is nearly
the same for men, whereas for women
cholesterol intake increases slightly.
This is because the fat and saturated fat
intakes of buyers are higher than nonbuyers, whereas the cholesterol intakes
of women buyers are in general lower
than women non-buyers. Based on these
magnitudes, if the new numbers are
used in the calculations, the benefits of
labeling are likely to be even higher.
Evaluation of Health Effects
Based on epidemiological research,
the estimated reductions in calories
from fat and cholesterol intake (Table
19) were used to estimate the decrease
in the incidence of major diseases
associated with consumption of fat and
cholesterol. The diseases considered in
this analysis include three types of
cancer and coronary heart disease.
Epidemiological studies of the
relationships between dietary fat and
cholesterol intake and incidence of
cancer and coronary heart disease
indicate that saturated and
polyunsaturated fat and cholesterol are
converted into serum cholesterol. Serum
cholesterol has an impact on the
incidence rates of these diseases.
Zarkin, et al. (1993) developed a model
which estimated the relationships
between dietary intake of fat and
cholesterol to convert fat contents into
the change in fat and serum cholesterol:
(1) SC (Mg/) = 2.16S¥1.65P + 0.097C
Where SC is serum cholesterol, S is the
change in percentage of total calories
represented by saturated fat, P is the
change in percentage of total calories
represented by polyunsaturated fat, and
C is the change in dietary cholesterol
measured in mg/1,000 calories.
Mancino and Kuchler (2009) show
that the threat of severe adverse health
consequences can induce significant
improvements in diet quality
(improvements from the perspective of
the public health community, not from
consumers’ perspectives). Cigarette
smoking and dietary intake of
cholesterol, total fat, and saturated fat
are lower for those whose physicians
told them they have high cholesterol,
compared to those with undiagnosed
high cholesterol. But, some also choose
to compromise diet quality. Mancino
and Kuchler found that dietary intake of
cholesterol is unaffected by the decision
to take cholesterol-lowering medication.
However, for those taking cholesterollowering medication, diets are higher in
total fats and in saturated fats than are
diets of those with unmedicated high
cholesterol. The waist circumference of
those on medication is also larger,
although some of the increase may be
associated with reduced cigarette
consumption. The increased dietary
intake of fat and saturated fat, along
with increased waist size are telling
evidence of offsetting behavior, as
medication lowers the health price of
unhealthy choices.
Reductions in serum cholesterol are
then converted to reduction in risk of
coronary heart disease and the three
types of cancers. The estimated values
of percentage changes in saturated fat
and cholesterol intake from the last
column of Table 18 were substituted
into the model developed by Zarkin, et
al. Since separate data for
polyunsaturated (P) fat were not
available, it was assumed that P would
be one-third of total fats, as was also
assumed by Zarkin, et al. The estimates
of serum cholesterol for male and
female consumers and reductions in
mortality are shown in Table 20.
TABLE 20—REDUCTION IN SERUM CHOLESTEROL AND CHANGE IN MORTALITY
Change in
calories from
total fat
Change in
calories from
saturated fat
Change in
cholesterol
intake
Change
in serum
cholesterol
Reduction
in mortality
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% change
Men ......................................................................................
Women .................................................................................
The calculated values of SC presented
above were used to estimate incidence
of breast, prostate, colon/rectal cancer,
and coronary heart disease. Zarkin, et
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0.11
0.11
%
0.04
0.10
al. (1993) concluded that an increase in
serum cholesterol by 20 mg/1,000
calories was associated with a 1.2percent increase in the incidence of
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4.12
2.37
0.399
0.231
0.0240
0.0139
each of these diseases. This rate was
used to convert reductions in total fat,
saturated fat, and cholesterol in Table
18 into SC. It is estimated that the
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reduction in mortality associated with
changing dietary pattern resulting from
mandatory nutrition information
labeling are 0.024 percent for men, and
about 0.014 percent for women.
However, Crutchfield et al. (2001b) note
that: ‘‘the link between fat intake, serum
cholesterol, and cancer risk is less clear
than for coronary heart disease.’’
The PRIA did not estimate changes in
total meat or poultry consumption that
may result from the rule, because of the
assumption that consumers would
choose different types of meat and
poultry to reduce fat, saturated fat, and
cholesterol. For example, consumers
may consume more poultry and less red
available that establishes a relationship
among nutrition labeling information,
health effects, and total meat or poultry
consumption.
Table 21 presents data on the annual
number of deaths associated with the
three types of cancer and coronary heart
disease for men and women in the
United States in 1998. Data for the
number of deaths came from the
National Center for Health Statistics
(coronary heart disease) and the
American Cancer Society (cancer). Data
on colorectal cancer were not available
by gender; FSIS assumed the estimated
56,000 cases were distributed equally
between men and women.
meat, or they may consume more white
poultry meat and less dark poultry meat
in response to the newly available
nutrition information. Also, in response
to the nutrition information, consumers
may prefer to purchase meat that has
been trimmed more closely to remove
fat.
The assumption that total
consumption of meat or poultry would
not change in response to the newly
available nutrition information is
consistent with the approach taken by
other studies that examine consumers’
response to health claims. One such
study is noted in the PRIA (66 FR 4989,
January 18, 2001). There is no research
TABLE 21—REDUCTION IN MORTALITY, NUMBER OF DEATHS, AND ESTIMATED LIVES SAVED
Reduction in
mortality (%)
Number of
deaths
Number of lives
saved
1
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The fact that FSIS’s analysis did not
estimate changes in total meat or
poultry consumption may be a
limitation of the results, but it is not a
major concern, because FSIS’s analysis
assumes that when consumers read the
new nutrition information, they will use
the information and choose to consume
the same mix of products as consumers
that are aware of the nutritional quality
of meat and poultry. The calculations in
the PRIA are based on a distribution of
nutrition label usage on meat and
poultry that reflects the distribution of
nutrition label usage for food products
as a whole. FSIS did not receive
comments on the fact that the PRIA did
not estimate changes in total meat or
poultry consumption. The supplemental
PRIA incorporates the PRIA’s estimates
of potential changes from intake of fat,
saturated fat, and cholesterol that could
occur as consumers respond to the
newly available nutrition information.
Finally, the Agency attached an
economic value to the public health
changes by estimating the implied value
of life associated with reductions in
premature mortality.
Using recent estimates, deaths from
breast cancer are estimated at 39,800,
prostate cancer at 29,800 and colorectal
cancer at 57,100 in 2003. Deaths from
coronary heart disease are estimated at
515,204 for 2000. As a result, the
estimated lives saved due to dietary
changes from nutrition labeling are
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3
4
5
6
7
Men
Breast Cancer ....................................................................................
Prostate Cancer .................................................................................
Colorectal Cancer ..............................................................................
Coronary Heart Disease ....................................................................
2
Women
Men
Women
Men
Women
Total
..............
0.0240
0.0240
0.0240
0.0139
..............
0.0139
0.0139
..............
31,900
28,000
231,332
41,200
..............
28,000
228,769
revised from those shown in Table 21.
The revised estimates are as follows:
annual deaths from breast cancer are
reduced by an estimated 5.5, deaths
from prostate cancer by 7.2, deaths from
colorectal cancer by 10.8, and deaths
from coronary heart disease by 97.8.36
The total annual lives saved due to
dietary changes from nutrition labeling
for all diseases is 121.7.
Effect of Nutrition Labeling on
Consumer Attitudes About Beef
As reported by the National
Cattlemen’s Beef Association (2009) the
U.S. meat industry trade organizations,
namely the National Cattlemen’s Beef
Association (NCBA), the Food
Marketing Institute (FMI) and the
National Pork Board (NPB), conducted
research to examine the benefits and
challenges of implementing on-pack
nutrition labeling for meat products.
This research included qualitative and
quanitative studies (via focus groups) to
explore consumer needs, behavior and
preference for nutrition labeling on
fresh meat products.
Focus Group Key Learnings
Findings from the focus groups
indicated that consumers desire more
nutrition information, find both on-pack
and POP materials useful but prefer on36 These estimates are based upon the rates that
were calculated for the PRIA.
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0
8
7
55
6
0
4
32
6
8
11
87
pack, and still want to see the product
they are purchasing. Additional
learnings indicate:
—Consumers want to see nutrition
information for fresh meat and they
want more information on specific
nutritional content.
• Information on fat content, calories
per serving, cholesterol and proteins are
of greatest importance.
• Micronutrients (vitamins and
minerals) are also of interest.
—Consumers are generally unaware of
the micronutrients found in fresh meat
products and they want to see all of the
nutrient information a food provides
(but aren’t interested in what a food
doesn’t have such as 0 percent for
Vitamin C).
—Consumers currently use on-pack
labels most often to learn about the
nutritional content of meat products
because there is higher awareness for
labels than for posters or take-home
brochures.
Beef Checkoff-Funded Research
Given the beef industry’s philosophy
that nutrition information should be
widely available to help people make
informed purchase decisions, yet
understanding the challenges many
retailers face in providing the
information in a simple and easy-tounderstand format, NCBA embarked on
a number of additional nutrition
labeling research projects. The goal of
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this subsequent research was to further
understand appropriate methods and
vehicles for retailers to share the
information with consumers.
Effect of Exemptions on Benefits
Estimates
Under this rule should it become
final, all very small establishments
would be exempt from the requirement
for nutrition labeling of ground or
chopped products because they have
500 or fewer employees, are owned by
companies with 500 or fewer
employees, and likely produce 100,000
pounds or less annually of each ground
product. Finally, retail firms that have
500 or fewer employees would be
exempt from nutrition labeling
requirements for ground or chopped
products, provided they produce
100,000 or less annually of each ground
product. This exemption for small
businesses will reduce the benefits
associated with the rule in proportion to
the share of ground or chopped
products affected by the rule that are
sold at these establishments.
FSIS estimates that the number of
packages of ground or chopped product
sold or produced through exempt
facilities is approximately 469 million
packages (2.267 billion packages times
20.7 percent, the estimated share of
packages sold at ‘‘exempt’’
establishments as shown using U.S.
Census 2002 data in the Cost Analysis).
At an average of 2.735 pounds per
package, the average amount of ground
or chopped product sold at these
establishments is about 1.283 billion
pounds (469 million packages × 2.735
pounds per package). FSIS estimates
that of the total of 6.201 billion pounds
of ground or chopped meat and poultry
products consumed annually, 4.918
billion pounds will be affected by the
labeling requirements of the rule.
As discussed above, the rule would
provide numerous exemptions from
nutrition labeling requirements, in
addition to the small business
exemptions, for ground or chopped
products sold through retail facilities.
FSIS reduced costs and benefits to
account for the small business
exemption regarding the labeling of
ground or chopped products. However,
FSIS did not reduce the costs or benefits
estimates to account for the other
exemptions for ground or chopped
product because the volume of ground
or chopped product that would qualify
for these other exemptions is very low.
Should it become final, the
supplemental proposed rule would not
provide a small business exemption
from the nutrition labeling requirements
for the major cuts. The rule provides
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numerous other exemptions from
nutrition labeling requirements for the
major cuts. However, FSIS did not
reduce the costs or benefits estimates to
account for the exemptions for major
cuts because the volume of major cuts
that would qualify for these exemptions
is very low.
FSIS estimates that the total amount
of major and nonmajor cuts of singleingredient, raw meat and poultry
products is 19.6 billion pounds.37 Of
this amount, FSIS estimates that 16.745
billion pounds, or 85 percent are major
cuts, would be subject to the label
requirements of the rule as indicated
above. The estimate of the total amount
of single-ingredient, raw meat and
poultry products that are not ground or
chopped is based on recent research
conducted by the Economic Research
Service on beef and pork consumption
and on information provided by the
National Chicken Council and National
Turkey Federation at their Web sites.
The derivation of this estimate is shown
in Appendix A, Tables 1–4.
Based on these estimates, 16.745
billion pounds of major cuts are affected
by the supplemental proposed rule.
From above, 4.918 billion pounds of
ground or chopped product are affected
by the rule, for a total of or 21.663
billion pounds of meat and poultry
products. This compares to a total of 63
billion pounds of red meat and poultry
products consumed in the United States
in 2003.38 The exemption for small
businesses affects 1.283 billion pounds
of ground or chopped product, or 5.92
percent of the total amount of meat and
poultry products affected by the rule.
Consequently, the total annual lives
saved due to dietary changes from
nutrition labeling for all diseases is
reduced accordingly. For example, the
maximum number of lives saved
annually declines from 121.7 to 114.5
(121.7 × (1.0–0.0592)).
Estimating the Benefits of Preventing
Premature Death
The benefits of this supplemental
proposed rule would be the lives saved
due to the estimated reductions in
mortality rates associated with coronary
heart disease and selected cancers. The
Agency believes that there are potential
37 This amount includes nonmajor cuts of singleingredient, raw meat and poultry that are not
ground or chopped. The data available do not
distinguish between major and nonmajor cuts.
38 Source: Per capita consumption estimates are
found at U.S. Department of Agriculture, World
Agricultural Supply and Demand Estimates and
Supporting Materials. Published in Livestock,
Dairy, and Poultry Outlook, http//
www.ers.usda.gov/publications/ldp/. Total
consumption is based on a total U.S. population of
288.4 million.
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benefits associated with the reductions
in non-fatal cases of coronary heart
disease. However, identifying and
quantifying the risk reduction of
premature death in an economic context
is difficult. Similarly, it is also complex
applying risk reductions of non-fatal
cases of diseases within an economic
context.39 Given questions concerning
data quality and unsettled
methodological issues in estimating the
benefits of a reduction in non-fatal cases
of coronary heart disease, FSIS is
restricting its analysis of benefits to
reductions in premature death.
If food were marketed by risk levels
(e.g., probabilities of inducing cancer or
heart disease), and consumers treated
advertised risk levels as they do other
objectively measurable product
characteristics (e.g., weight or volume),
there would be little difficulty in
valuing diet-related food safety risk
factors. Product prices could be
statistically associated with risk levels,
yielding the risk-dollar trade-off
consumers make. That is, one could
measure, based on consumer purchases,
the dollar value consumers attach to
particular types of risk reduction.
However, there is no ‘‘market’’ for
reducing diet-related fatal risks and
these values can not be measured.
There is no price that can be tabulated
from commercial transactions that
reflects the value of reducing dietrelated fatal risks. Actions that
individuals might take to reduce these
risks do not leave a behavioral trail for
analysts to follow. This informational
void makes it difficult to evaluate
programs that might reduce diet-related
risks. In particular, there is no obvious
dollar value to assign to the major
benefit of such programs, namely lives
saved and reductions in cases of nonfatal diseases.
Ultimately, FSIS wanted to monetize
the benefits of diet-related fatal health
risk reduction. The Agency’s goal was to
find a method of transferring marketbased risk-dollar trade-off estimates to
diet-related fatal cancer risks.
The most studied risk choices are
those for on-the-job risks of accidental
injury and death. Analysts have
estimated the compensation required to
induce workers to accept such risks.
Many studies of labor market behavior
have been carried out because the wide
range of risk levels workers accept and
the wide range of wages paid are
amenable to statistical analysis.
Available evidence suggests that
workers’ subjective assessments of risks
they face are plausible (Viscusi, 1992).
39 For an in-depth analysis of this issue, see Fred
Kuchler and Elise Golan, 1999.
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FSIS is using a range for the value of
life of $5.0 million to $6.5 million with
a mean of $5.5 million. The preliminary
regulatory impact analysis of the rule
used a single value of $5.0 million. The
value of a statistical life is not the value
an individual would pay to save his
own life, but the aggregate value paid by
many individuals to reduce a small risk
of death each faces. To make this
transfer, FSIS assumed that individuals
make consistent risk choices, reducing
health risks as much as their budgets
allow. The Agency assumed individuals
focus on the likelihood of health
outcomes and the gravity of these
outcomes.40
Viscusi (1992) has summarized the
empirical work estimating the value of
risk of premature death. Several studies
had estimated the risk-dollar trade-off in
the labor market by dividing the wage
premium for high-risk jobs by the risk
of a fatal job injury. Drawing on the
compiled results of these studies, he
stated: ‘‘Although the estimates of the
risk-dollar trade-off vary considerably
depending on the population exposed to
the risk, the nature of the risk, and
similar factors, most of the reasonable
estimates of the value of life are
clustered in the $3 to $7 million range’’
(Ibid., p. 73). Thus, compensating wages
indicate that, on average, industrial
workers value a statistical life at $5
million (December 1990 dollars), the
midpoint of the range. The Economic
Research Service, USDA has used a
value of $5 million per life estimate
(adjusted upwards for inflation to 2000
dollars) to measure the benefits of
preventing premature death from
foodborne diseases caused by microbial
pathogens such as E. coli O157:H7,
Salmonella spp., and Listeria
monocytogenes (Crutchfield, et al.,
2001a). This estimate has been used by
other government agencies to evaluate
the benefits of regulations designed to
reduce the risk of premature death. For
example, the Food and Drug
Administration (66 FR 6137, January 19,
2001) and the Consumer Product Safety
Commission (Miller, 1997) currently use
Viscusi’s mid-point value of $5 million
for each life saved (Kuchler and Golan,
1999, p.25). Finally, the Food and Drug
Administration (68 FR 41434, July 11,
2003, and 69 FR 56824, September 22,
2004) use both $5.0 million and $6.5
million as the value of a statistical life.
FSIS believes that the value for a
statistical life used in the analysis is
consistent with current practices, OMB
guidance, and research.
It should be noted that the
calculations used to estimate present
value explicitly account for the time
factor associated with delayed health
impacts of dietary change. Decreases in
intake of saturated fat, fat, and
cholesterol will reduce the incidence of
heart disease and cancer, but not
immediately—the reductions in illness
and death will begin to occur years into
the future. To address the uncertainty
associated with the reduced incidence
of heart disease and cancer, FSIS
identified three plausible scenarios that
are intended to encompass the actual
impact. The scenarios are shown in
Table 22. The first scenario assumes that
there would not be any reduction in
mortality in the first time period
covering the first two years after the
effective date of the rule. During the
second time period covering the third
through the seventh years following the
effective date, 25 percent of the
potential reduction in human health
risk is achieved—28.6 lives saved
annually as a result of dietary changes.
In period 4, covering the last eight years
of the period of analysis, the full
reduction in human health risk is
achieved—114.5 lives saved annually as
a result of dietary changes. In scenarios
2 and 3, the benefits of the rule are
assumed to occur progressively later in
the period of analysis.
TABLE 22—HUMAN HEALTH IMPACT FOR ALTERNATIVE SCENARIOS—ANNUAL PERCENTAGE REDUCTIONS IN MORTALITY
AND LIVES SAVED
Period 1
Period 2
Period 3
Period 4
0
25
50
100
Percent of Total Reduction
Scenario 1
Years in period following effective date ..........................................................................
Lives saved annually .......................................................................................................
1–2
0
3–7
28.6
8–12
57.3
13–20
114.5
1–5
0
6–10
28.6
11–15
57.3
16–20
114.5
1–8
0
9–13
28.6
14–18
57.3
19–20
114.5
Scenario 2
Years in period following effective date ..........................................................................
Lives saved annually .......................................................................................................
Scenario 3
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Years in period following effective date ..........................................................................
Lives saved annually .......................................................................................................
To arrive at an estimate of the benefits
associated with reductions in mortality
due to changes in fat and cholesterol
intake, FSIS multiplied the dollar values
assigned to each premature death ($5.0,
$5.5, and $6.5 million) prevented by the
number of lives saved annually in the
three scenarios due to changes in diet
quality. The present values of the
benefits associated with the reductions
in mortality associated with the
scenarios identified in Table 22 are
shown in Table 23. The net present
value of the human health benefits of
reduced mortality for all diseases over
20 years is estimated to be a maximum
of $5.9 billion under Scenario 1 using a
discount rate of 3 percent and $6.5
million for each premature death
avoided. The lowest present value of
human health benefits occurs under
Scenario 3 using a discount rate of 7
percent and $5.0 million for each
premature death avoided and is
40 FSIS revised the method employed in the
preliminary regulatory impact analysis of the rule
to estimate human health benefits based on
guidance to all Federal agencies concerning the
estimation of human health benefits. The revised
method uses a single value for each premature
death prevented, regardless of age. The revised
method results in significantly higher human health
benefits resulting from the nutrition labeling
requirements of the rule.
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estimated to be $1.1 billion. These
benefits would be distributed among the
diseases evaluated in the same share
that they represent of total lives saved
due to dietary changes from nutrition
labeling as shown above.
Based on the information shown in
Table 22, FSIS constructed a composite
scenario for all diseases by first
computing the average number of lives
saved annually from the three scenarios.
The derivation of lives saved for the
composite scenario is shown in
Appendix A, Table 5. The annual
average for lives saved over the 20 year
period under the composite scenario
was 50.1. This compares with annual
averages of 67.3, 50.1, and 32.9 lives
saved under scenarios 1, 2, and 3,
respectively (Appendix A, Table 5). To
estimate an average human health
benefit over the three scenarios, the
annual average number of lives saved
under the composite scenario is
multiplied by each of the three values
for a statistical life year. The average is
then computed for each year to derive
the annual values of lives saved under
the composite scenario as is shown in
Appendix A, Table 6. Each value was
weighted equally. The results of the
analysis of the composite scenario show
a net present value for lives saved of
$3.694 billion using a 3 percent
discount rate, and $2.177 billion using
a 7 percent discount rate. The
corresponding annualized human health
benefits from the reduction in all
diseases are $248.3 and $205.5 million,
respectively. The benefits estimates
presented here assume POP nutrition
information to be equally successful as
nutrition labels in leading to dietary
change and consequent reductions in
the three cancers studied and coronary
heart disease. However, this assumption
is not realistic. The analysis of
alternatives section below provides a
range of benefits estimates using
different assumptions about the relative
effectiveness of the POP nutrition.
These annualized values will be used in
the cost-effectiveness analysis.
TABLE 23—PRESENT VALUE OF HUMAN HEALTH IMPACTS FOR ALTERNATIVE SCENARIOS OVER 20 YEARS, 3 PERCENT
AND 7 PERCENT DISCOUNT RATES
Scenario/
value of a statistical life
Present value
3%
Present value
7%
Average annual benefit
3%
Average annual benefit
7%
$ Million
Scenario 1
5.0 ....................................................................................................................
5.5 ....................................................................................................................
6.5 ....................................................................................................................
4,502.4
4,952.7
5,853.2
2,776.4
3,037.5
3,589.8
302.6
332.9
393.4
260.7
286.7
338.8
3,223.8
3,546.1
4,190.9
1,865.8
2,052.4
2,425.6
216.7
238.4
281.7
176.1
193.7
229.0
5.0 ....................................................................................................................
5.5 ....................................................................................................................
6.5 ....................................................................................................................
2,053.6
2,258.9
2,669.7
1,134.8
1,248.3
1,475.3
138.0
151.8
179.4
107.1
117.8
139.3
Composite ........................................................................................................
3,694.4
2,176.7
248.3
205.5
Scenario 2
5.0 ....................................................................................................................
5.5 ....................................................................................................................
6.5 ....................................................................................................................
Scenario 3
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Effects of Current Compliance Levels
As has been discussed in the Cost
Analysis, the level of participation in
the voluntary nutrition labeling program
is 54.8 percent of stores for major cuts
(USDA, 1999). In addition, an estimated
68 percent of ground or chopped
products bear nutrition labels (NCBA,
2004). The analysis of benefits
presented above assumes no prior
compliance. Were these levels of
compliance incorporated into the
amount of meat and poultry product
affected by the supplemental proposed
rule, the amount of product affected
would decline from 21.6 billion pounds
to 9.1 billion pounds 41 (21.6 billion
pounds minus 16.7 billion pounds of
major cuts × (1.0–0.548) and 4.9 billion
41 The estimates amounts of major cuts and
ground or chopped products are shown in Table 24.
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pounds ground or chopped product ×
(1.0–0.68). Since the benefits analysis
treats the consumption of types of meat
and poultry products the same in terms
of their impacts on human health, the
benefits would be reduced accordingly.
Instead of achieving a maximum
number of lives saved of 114.5 annually,
which is the starting value for the
benefits analysis, the rule would save at
most 42.1 lives annually. Under the
composite scenario, modified
accordingly, the annual number of lives
saved would be 18.4. The present values
of the benefits are $1.358 and $.800
billion using 3 and 7 percent discount
rates, respectively. The corresponding
annual benefits are $91.3 million and
$75.5 million. The estimated benefits
under this scenario can be compared
with those in Table 23 above.
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3. Minimum Effectiveness of Measures
Required by the Supplemental Proposed
Rule for Benefits To Exceed Costs
In the cost analysis of the proposed
and supplemental proposed rules, FSIS
assumes that retailers will display POP
nutrition information for the major cuts
rather than apply nutrition labels to
these products because this is a lowercost means of providing nutrition
information for multiple products. The
benefits analysis does not provide
separate estimates of the benefits of
nutrition labels and POP information as
it was not possible to distinguish
between the behavioral response and
change in dietary intake associated with
these two means of conveying nutrition
information to the consumer.
The Agency assumes that when labels
and other sources of nutrition
information are provided for raw meat
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and poultry products that nutrition
information usage rates will rise to
match label usage rates for food
products as a whole, and that dietary
patterns will change in a manner
consistent with current data. Labeling,
as used in the surveys matching its
usage and dietary changes, has generally
been interpreted to mean on-package
labels rather than POP labeling.
Consequently, the discussion of the
benefits of the rule has implicitly
focused on on-package labels.
In the analysis below, we first
estimate the reduction in risk associated
with POP nutrition information
sufficient to equate its benefits and
costs. Then we estimate remaining
benefits of the rule that must be
attributed to on-package nutrition labels
for benefits to exceed costs.
The estimated cost of providing POP
nutrition information is $5.67 million
starting the year of the effective date and
every other year thereafter. The net
present values using a discount rate of
3 and 7 percent for the 20-year period
of analysis are discounted costs of
$42.82 and $31.07 million, respectively.
The annualized values for these net
present values are $2.88 and $2.93
million, respectively (Table 25). The net
present values for the 20-year costs of
on-package nutrition labels for ground
and chopped products are $429.41
million and $316.99 million, using 3
and 7 percent discount rates,
respectively. The annualized cost
associated with net present values using
3 and 7 percent discount rates are
$28.86 and $29.92 million,
respectively.42 Under the composite
scenario discussed in the benefits
analysis, there is an average of 50.1 lives
saved annually as a result of the
nutrition labeling requirements of the
rule.
The average reduction in risk for the
benefits of POP nutrition information
for major cuts of single ingredient, raw
products to equal their cost is 0.53 lives
saved annually ((2.88+2.93)/2)/5.5)
assuming a value of life of $5.5 million
(Table 25). The reduction in risk for the
benefits of on-package nutrition labels
for ground or chopped products to equal
their cost is about ten times greater (5.34
lives saved annually).
The estimated total reduction in risk
in order for the benefits of these
combined measures to exceed costs is
5.87 lives saved annually or about oneninth (5.87/50.1) of the estimated 50.1
lives saved annually under the
composite scenario, using a value of life
saved of $5.5 million.
TABLE 25—BREAK-EVEN ANALYSIS OF THE SUPPLEMENTAL PROPOSED RULE MEASURES
Annualized average
costs ($million)
Discount rate
Measure
Number of lives saved annually
for benefits to equal costs
Value of life ($million)
3%
7%
5.0
5.5
6.5
POP nutrition information for major cuts of single ingredient, raw products ..............
On-package nutrition labels for ground or chopped products 1 ...................................
2.88
28.86
2.93
29.92
.58
5.88
.53
5.34
.45
4.52
Total ......................................................................................................................
31.74
32.85
6.46
5.87
5.97
1 The
costs of on-package labels include all costs that are not directly attributable to providing POP nutrition information as identified in Table
13.
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E. Analysis of Alternatives
The previous discussion of regulatory
alternatives provided a description of
the regulatory alternative considered
and information on the likely costs of
the alternatives. The analysis that
follows provides a quantification of the
potential effectiveness of the
alternatives as well as a comparison of
cost-effectiveness and potential net
benefits.
The regulatory alternatives considered
by the Agency employ one or both of the
following measures: POP nutrition
information and on-package nutrition
labels. The combination of measures
and the products subject to these
measures differ among the regulatory
alternatives considered. In the
supplemental proposed rule
(Alternative 3), on-package nutrition
labels are required for ground or
chopped meat and poultry products
(unless an exemption applies), and onpackage nutrition labels or POP
nutrition information are required for
42 Annualized benefits are defined as the average
annual amounts, when discounted, will provide a
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the major cuts of single ingredient, raw
meat and poultry products (unless an
exemption applies). It is assumed for the
purpose of estimating compliance costs
that, given the option, retail
establishments will provide POP
information in the form of placards to
convey nutrition information for major
cuts of single ingredient, raw meat and
poultry products. Alternative 2
stipulates POP nutrition information for
ground or chopped product and for
major and nonmajor cuts of single
ingredient, raw products. It is assumed
for purposes of estimating the cost of
this alternative that retail
establishments will use a reference
manual to convey nutrition information
for the products covered. Retailers may
employ other methods, however.
Alternative 4 requires on-package
nutrition labels for ground or chopped
products and major cuts. Alternative 5
stipulates on-package nutrition labels
for ground or chopped product, and
both major and nonmajor cuts of single
ingredient raw products.
present value benefits equal to that shown for the
selected scenario. It is a means for providing a
single annual amount for a scenario showing
significant differences on a year-to-year basis.
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Relative Effectiveness in Providing the
Necessary Material Facts
The Agency considered several factors
in selecting Alternative 3. The factors
reflect the significant differences in the
two principal categories of meat and
poultry products— ground or chopped
products and major and nonmajor cuts,
consumer preferences, and the
effectiveness with which information
about these two categories of products is
presented in retail establishments.
Differences in product characteristics,
consumer preferences, and demand for
nutrition information affect the value of
nutrition information for the two
general categories of products. The
justification for the government action
in requiring nutrition information
differs for the two categories of
products, as has been argued in the need
for the rule. Different approaches to
labeling may be warranted and what
might be an effective approach for
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providing nutrition information for one
category may be unsuitable for the
other. FSIS finds that this is the case,
based on the full range of evidence
available.
Ground or chopped product are
formulated to achieve a specific fat
content and thus are similar to multiingredient and heat processed products,
which receive on-package nutrition
labels. The nutritional characteristics of
these products can vary significantly.
For example, the percentage of total fat
in ground beef may range from 3 to 30
percent. Consequently, consumers have
a significant number of choices
concerning type of product and
nutritional characteristics. Nutrition
information enables consumers to match
product choices with nutritional
preferences.
While the processor formulating the
ground or chopped product has
knowledge of the nutritional
characteristics of each product
formulation, such information is not
readily available to the consumer.
Significant differences in total fat
content of ground and chopped
products may be difficult for the
consumer to distinguish. Consequently,
there is little incentive for processors to
provide information on ground or
chopped products with higher fat
content. Yet, consumers’ information
needs are significant, given the
differences in consumer preferences for
high fat and low fat products. Under
these conditions, readily accessible
nutrition information would be highly
valued by consumers. FSIS has
concluded that clear and concise
information should be available to
consumers of ground or chopped
product in the form of an on-package
label. It would be confusing to
consumers if nutrition information were
provided by POP placards for all
potential formulations of these
products. Faced with a large array of
signage, the potential value of nutrition
information could be exceeded by the
transactions cost for many consumers
seeking such information.
Because there are numerous
formulations of ground or chopped
product, it would be difficult for
producers or retailers to develop POP
materials that would address all the
different formulations that exist for
these products. Furthermore, it would
be difficult for consumers to find the
correct information for a specific ground
or chopped product on POP materials
that include information concerning
numerous formulations of these
products (66 FR 4977, January 18, 2001).
If a statement of the fat percentage and
lean percentage were not included on a
package of ground product, consumers
would not know which nutrient data
concerning ground product on POP
materials would apply to that particular
ground product. Thus, FSIS on-package
nutrition labels would likely enable
consumers to make product
comparisons far more efficiently
because consumers would have more
relevant information directly attached to
the products to inform their choices.
Major cuts are generally considered
by consumers to be largely
undifferentiated products in terms of
nutrient content (Van Ravenswaay). The
nutritional characteristics of one beef
chuck blade roast are perceived to be
much the same as another. The
differences in nutritional characteristics
for a particular major cut (e.g., chicken
breasts) vary much less than the
nutritional characteristics for a type of
ground or chopped product (USDA,
2005). This is an important factor to
consider as consumer preferences are
more likely to differ on the basis of the
type of major cut (e.g., chicken breasts
versus pork loin chops).
Based on the similarity of nutritional
attributes of any specific major cut and
the type of information desired by
consumers, FSIS has concluded that it
would be acceptable for retail
establishments to provide nutrition
information via POP placards for major
cuts. They are an efficient means of
providing such information given the
relatively small number of products sold
at retail establishments, their relatively
large share of total meat and poultry
consumption, and consumer
information needs.
In developing the regulatory
alternatives, the Agency concluded that,
given the option, retail establishments
would most likely not choose to provide
nutrition information for nonmajor cuts
via POP placards. There are potentially
a large number of such products (350
products for meat alone according to the
National Live Stock Meat Board). Using
POP placards to convey nutritional
information on these products could
result in excessive signage at retail
establishments. Excessive signage
would not only be a concern for the
retail establishment, but also would not
convey information in a manner that
would promote its usage by consumers.
Retail establishments would be more
likely to opt for providing nutrition
information for nonmajor cuts in a
reference manual. The following table
summarizes factors considered by the
Agency in its selection of Alternative 3
as the most effective in providing the
material information to consumers.
TABLE 24—COMPARISONS OF METHODS FOR CONVEYING NUTRITION INFORMATION AND MEAT AND POULTRY PRODUCT
CATEGORIES
Product category
Method
Ground or chopped
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POP Nutrition Information.
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• Information asymmetry is greater
than the information asymmetry in
POP nutrition information for major
cuts and nonmajor cuts that are not
ground or chopped.
• Consumer preferences differ on the
basis of fat content.
• Nutrition information on formulated
products (ground or chopped products) is less accessible on POP materials than it would be on product labels.
• Given the number of product formulations, it would be confusing to consumers to use POP nutrition information.
• Nutrient content of a given major cut is relatively uniform across the market,
and these products are not formulated in the manner of ground or chopped
products.
• Consumer preferences differ on the basis of types of products in the category.
Placards.
• Efficient means of presenting nutrition information for major cuts—relatively
small number of products comprising large share of meat and poultry consumption.
• Ineffective means of information delivery for nonmajor cuts that are not
ground or chopped: potentially large number of products resulting in excessive signage.
• Nonmajor cuts account for small share of consumption. Reference Manual.
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TABLE 24—COMPARISONS OF METHODS FOR CONVEYING NUTRITION INFORMATION AND MEAT AND POULTRY PRODUCT
CATEGORIES—Continued
Product category
Method
Ground or chopped
On-Package Labels
• Information asymmetry is greatest for
product category.
• Consumer preferences differ on the
basis of fat content.
• Information is clear and concise.
• Highly-valued information for consumers because consumer preferences differ most for these types of
products on the basis of nutritional
content.
• Consumer search costs are minimized.
A major source of uncertainty in this
analysis is the success of POP nutrition
information relative to on-package
nutrition labels. Research studies on
effectiveness of POP information
virtually ended with passage of the
NLEA. So, most POP research is now
quite dated. Thus, the research available
does not allow FSIS to make a precise
comparison of the relative success of onpackage nutrition labels versus POP
nutrition information. However, POP
nutrition information may be a
convenient and effective means for
consumers to confirm or gain new
information on the nutritional content
of the major or nonmajor cuts of single
ingredient, raw products. Given these
uncertainties, in the analysis that
follows, FSIS assumes that POP
nutrition information is 50 percent, 10
percent and 5 percent as successful as
on-package nutrition labels in causing
dietary change to illustrate the impacts
of those assumptions on the relative
cost-effectiveness as well as net benefits
of the alternatives.
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Analysis of Cost Effectiveness
A cost-effectiveness analysis (CEA)
provides a means to identify alternatives
that achieve the most effective use of
resources available without requiring
the monetization of all benefits or costs
by comparing regulatory alternatives
with respect to their ability to achieve
a specified outcome (e.g., units of
human or environmental health).
Regulatory alternatives employing the
same measures are ordered on the basis
of the increased frequency, scope,
lethality, or some other criterion.
Ideally, a CEA results in comparison of
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• Reference manual is low-cost means of information delivery. However, high
search costs may greatly reduce effectiveness.
• Number of nonmajor products is large and amounts comprise about 15% of
meat and poultry consumption.
• Uniform reference manuals not likely given regional differences in names of
similar nonmajor products.
• Nutrient content of a given major cut is relatively uniform across the market,
and these products are not formulated in the manner of ground or chopped
products.
• Consumer preferences differ on the basis of types of products in the category.
Major cuts.
• Consumers have reasonable expectations as to the nutrient content of these
products.
Nonmajor cuts.
• Consumers have limited access to nutrition information for nonmajor cuts.
the incremental cost per unit of outcome
for each regulatory alternative when the
alternatives are ordered on the basis of
an increasing level of the specified
criterion.
FSIS agrees that cost effectiveness
ratios for regulatory options should be
calculated incrementally, that is, in
terms of the additional cost incurred by
the next most stringent option to
produce an additional life saved.
However, the data available for the
analysis and the nature of the regulatory
alternatives poses some challenges to
conducting a meaningful incremental
CEA. First, the regulatory alternatives
stipulate the use of one or two measures
that may be employed for providing
nutrition information for two or three
categories of products—ground or
chopped product and single-ingredient
raw products (major and nonmajor
cuts)—of meat and poultry. The two
measures are POP nutrition information
materials and on-package nutrition
labels. Second, the effectiveness of POP
nutrition information relative to onpackage nutrition labels is uncertain.
The greater amount of time required by
the consumer to find the relevant
nutrition information on POP materials
relative to finding such information on
the packaging of the products suggests
that POP nutrition information may be
less successful for some types of
products in leading to healthier dietary
choices. Given the assumptions we
make in order to model the regulatory
provisions given the uncertain
effectiveness, the result is an
incremental cost-effectiveness analysis
which shows that multiple alternatives
are weakly dominated under all
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scenarios. Consequently, the analysis
that follows provides a comparison of
average cost-effectiveness and netbenefits of the regulatory alternatives for
each alternative, for different levels of
assumed relative effectiveness of POP
information.
Average Cost-Effectiveness of
Regulatory Alternatives
Cost-effectiveness analysis results
based on averages can be misleading in
that the regulatory alternative exhibiting
the lowest cost-effectiveness ratio may
not be the best option. Low ratios are
not always an accurate indicator of high
net social benefits, the desired economic
objective. The following provides
information on the average cost
effectiveness of the regulatory
alternatives and their net benefits.
In order to analyze both the average
cost effectiveness of the regulatory
alternatives and incremental cost
effectiveness of the measures employed
by the regulatory alternatives, the share
of the reduction in risk associated with
the POP nutrition information for
ground and chopped products and both
major and nonmajor cuts are estimated.
Estimates of the number of products
subject to on-package nutrition labeling
are also provided. The costs
corresponding to the risk reduction
measures are also estimated. Table 26
provides the information that was used
to allocate the annualized costs and
reductions in risk.
The reductions in risk associated with
the regulatory alternatives reflect the
differences in the pounds of product
affected. Alternatives 2 and 5 affect
ground and chopped products and the
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major and nonmajor cuts, a total of 24.5
billion pounds (Table 26). Alternative 3
(the supplemental proposed rule)
requires on-package nutrition labels for
ground or chopped products and either
on-package nutrition labels or POP
nutrition information for the major cuts,
a total of 21.6 billion pounds.
Alternative 4 affects the same amount of
product as Alternative 3. The
differences in pounds of products
affected among the regulatory
alternatives are reflected in the annual
number of lives saved. The potential
number of lives saved annually for
Alternatives 2 and 5 are increased
proportionately by 13 percent (24.5/21.6
= 1.1343) to reflect the difference in
pounds of product affected. Therefore,
the maximum number of lives saved
annually for Alternatives 3 and 4 is
50.1. The corresponding value for
Alternative 2 and 5 is 56.8 lives saved
annually (50.1 × 1.1343).
The total cost of Alternative 2, which
is exclusively the cost of the POP
nutrition information manual, is
allocated among ground and chopped
product, and major and nonmajor cuts
on the basis of the share of products in
these categories (CFR §§ 317.344 and
381.444, National Livestock Meat Board,
1995). The costs associated with
labeling measures for the product
categories (on-package nutrition labels
for ground and chopped and major cuts,
and on-package labels for these products
plus nonmajor cuts for Alternatives 4
and 5, respectively) are allocated on the
basis of the relative shares of these
products at retail establishments.
TABLE 26—MEAT AND POULTRY PRODUCT INFORMATION
Percent
shares for
Alternatives
2&5
Billion
pounds
Meat and poultry product volumes affected by regulatory alternatives
Major and nonmajor cuts .................................................................................................
Major cuts ........................................................................................................................
Nonmajor cuts ..................................................................................................................
Ground or chopped ..........................................................................................................
All meat and poultry .........................................................................................................
80.0
68.2
11.8
20.0
100.0
Number of
products
Products in POP nutrition information manual
19.6
16.7
2.9
4.9
24.5
Percent
share for
Alternative 2
Ground or chopped ..........................................................................................................
Major cuts ........................................................................................................................
Nonmajor cuts 1 ...............................................................................................................
13
45
350
Total ..........................................................................................................................
403
77.3
77.3
............................................
22.7
100.0
3.0
11.0
86.0
............................................
............................................
............................................
100.0
............................................
Percent
share
Alternative 5
Number of
products
Products at retail establishments with on-package nutrition labels
Percent
shares for
Alternatives
3&4
Percent share
Alt. 3
Alt. 4
Ground or chopped ..........................................................................................................
Major cuts ........................................................................................................................
Nonmajor cuts ..................................................................................................................
12.50
31.74
12.42
22.0
56.0
22.0
100.0
....................
....................
28.3
71.7
....................
Total ..........................................................................................................................
56.66
100.0
100.0
100.0
1A
comprehensive listing of nonmajor cuts was provided in the Uniform Retail Meat Identity Standards published by the National Livestock and
Meat Board. Nonmajor cuts of poultry, of which there are few, are not included. Amenable kinds of poultry are not accounted for. Most ducks,
geese, squab are sold as carcasses and there is only a very small market for ostrich cuts/parts; and rhea and emu are used for byproducts
mostly.
The present value and corresponding
annualized costs for the regulatory
alternatives and their measures are
shown in Table 27. There are no costs
associated with Alternative 1 as it
represents the status quo. As is reflected
in their costs, the alternatives become
increasingly costly due to the increasing
share and number of products that
receive on-package nutrition labels,
which are significantly more costly than
POP nutrition information. The present
value cost of the alternatives range from
a low of $87.74 million for Alternative
2 to $956.48 million for Alternative 5.
The present value of the compliance
costs of the alternative selected by the
Agency is $348.06 million. The table
also shows the compliance costs, both
present value and annualized, on the
basis of the major product categories.
TABLE 27—AVERAGE COSTS OF REGULATORY ALTERNATIVES
Present value
Annualized values
Alternative
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3%
7%
3%
7%
$ million
Alternative 2. POP manuals for all products:
Total .............................................................................................................................................
Ground & chopped ...............................................................................................................
Major cuts .............................................................................................................................
Nonmajor cuts ......................................................................................................................
Alternative 3. On-package labels for ground and chopped, POP placards for major cuts:
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123.19
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13.59
105.68
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87.74
2.80
9.68
75.27
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8.28
.26
.91
7.1
8.28
.26
.91
7.1
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TABLE 27—AVERAGE COSTS OF REGULATORY ALTERNATIVES—Continued
Present value
Annualized values
Alternative
3%
7%
3%
7%
$ million
Total .............................................................................................................................................
Ground & chopped ...............................................................................................................
Major cuts .............................................................................................................................
Alternative 4. On-package labels for ground and chopped products and major cuts:
Total .............................................................................................................................................
Ground & chopped ...............................................................................................................
Major cuts .............................................................................................................................
Alternative 5. On-package labels for all products:
Total .............................................................................................................................................
Ground & chopped ...............................................................................................................
Major cuts .............................................................................................................................
Nonmajor cuts ......................................................................................................................
472.23
429.41
42.82
348.06
316.98
31.07
31.74
28.86
2.88
32.85
29.92
2.93
1,103.90
429.41
674.49
812.99
316.98
496.00
74.20
28.86
45.34
76.75
29.92
46.82
1,298.74
429.41
674.49
194.84
956.54
316.99
496.00
143.49
87.30
28.86
45.34
13.10
90.28
29.92
46.82
13.54
Note: These compliance costs do not take into account the level of voluntary compliance with the labeling required under each alternative.
Consequently, the estimated compliance costs are overstated.
The lives saved associated with the
nutrition labeling measures for ground
or chopped products, and major and
nonmajor cuts are based on the amount
of product affected by the measures for
each of the regulatory alternatives. For
example, 16.7 billion pounds of major
cuts are affected by POP nutrition
information placards under Alternative
3 (Table 26). On-package nutrition
labels are required for the 4.9 billion
pounds of ground and chopped meat
and poultry products affected by
Alternative 3. The average annual 30.74
(19.37 + 11.37) lives saved as a result of
this alternative, assuming POP nutrition
information is 50 percent as successful
as on-package nutrition labels in
causing dietary change, is obtained as
follows. The average annual lives saved
as a result POP nutrition information for
major cuts is 19.4 lives as shown in
Table 28 (16.7/21.6 = 0.77; (0.77 × 50.1)
× .5 43 = 19.4). On-package nutrition
labels for ground or chopped products
account for the remaining 11.4 lives
saved annually (4.9/21.6 = .227; .227 ×
50.1 = 11.4).
Table 28 shows the cost-effectiveness
of the regulatory alternatives when POP
nutrition information is assumed to be
half as successful as on-package
nutrition labels in bringing about
healthier diets and reducing coronary
heart disease and cancer. This success
rate is considered to be an upper bound.
The cost per life saved for Alternative 3
is $1.069 million, when using the
composite annual average and
annualized costs based on a 7 percent
discount rate. The cost per life saved for
on-package nutrition labels for ground
or chopped products under this
alternative is $2.63 million ($29.92
million from Table 27/11.37 lives saved
annually, column 1 of Table 28) and
$151,000 for POP nutrition information
placards under this alternative ($2.93
million from Table 27/19.37 lives saved
annually).
As would be expected under this
scenario, Alternative 4 and 5 are less
cost effective than the supplemental
proposed rule measures because they
rely entirely on the relatively more
costly measures of on-package nutrition
labels. Alternative 2 has a lower costeffectiveness ratio in this scenario
because of the assumed high rate of
success for POP nutrition information
and because it relies entirely on a lowcost POP reference manual.44 Using an
average VSL of $5.5 million, all
alternatives show large average annual
benefits relative to annual costs with
Alternative 5 yielding the highest net
benefits.
TABLE 28—AVERAGE COST-EFFECTIVENESS AND NET BENEFITS OF POTENTIAL LIVES SAVED—POP NUTRITION
INFORMATION 50 PERCENT AS SUCCESSFUL AS ON-PACKAGE NUTRITION LABEL INFORMATION
Potential lives
saved
Alternatives
Cost/life saved
7%
Value of lives
saved
Net benefit 7%
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$ million
Alternative 2. POP manuals for all products:
Total .................................................................................................................
Ground/chopped .......................................................................................
Major cuts .................................................................................................
Nonmajor cuts ..........................................................................................
Alternative 3. On-package labels for ground and chopped, POP placards for
major cuts:
Total .................................................................................................................
Ground/chopped .......................................................................................
Major cuts .................................................................................................
43 This value reflects the relative success of POP
nutrition information relative to on-package labels.
This value will change according to the scenario
being discussed.
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28.4
5.7
19.4
3.4
.291
.046
.047
2.112
156.3
31.3
106.5
18.5
150.0
31.0
105.6
11.4
30.7
11.4
19.4
1.069
2.633
.151
169.0
62.5
106.5
136.2
32.6
103.6
44 The analysis assumes that the manual
containing the nutrition information as specified for
Alternative 2 and the POP nutrition information
placards specified in Alternative 3 have the same
impact on consumer dietary patterns. The use of a
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nutrition information reference manual is assumed
to be the manner by which retail establishments
would convey nutrition information under
Alternative 2.
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TABLE 28—AVERAGE COST-EFFECTIVENESS AND NET BENEFITS OF POTENTIAL LIVES SAVED—POP NUTRITION
INFORMATION 50 PERCENT AS SUCCESSFUL AS ON-PACKAGE NUTRITION LABEL INFORMATION—Continued
Potential lives
saved
Alternatives
Cost/life saved
7%
Value of lives
saved
Net benefit 7%
50.1
11.4
38.7
1.532
2.633
1.209
275.6
62.5
213.4
198.8
32.6
166.2
56.8
11.4
27.8
10.9
1.589
2.633
1.628
1.202
312.6
62.5
153.1
59.9
222.3
32.6
106.3
46.4
Alternative 4. On-package labels for ground and chopped products and
major cuts:
Total .................................................................................................................
Ground/chopped .......................................................................................
Major cuts .................................................................................................
Alternative 5. On-package labels for all products:
Total .................................................................................................................
Ground/chopped .......................................................................................
Major cuts .................................................................................................
Nonmajor cuts ..........................................................................................
Note: These estimates do not take into account the level of voluntary compliance with the labeling required under each alternative. Consequently, the estimated compliance costs as well as potential lives saved are overstated.
Tables 29 and 30 show the impact on
the cost effectiveness of Alternatives 2
and 3, and their respective measures,
when POP nutrition information is 10
and 5 percent as successful,
respectively, as on-package nutrition
labels in leading to dietary changes. The
cost effectiveness of Alternatives 4 and
5 are not affected as they do not employ
POP nutrition information.
Consequently, their effectiveness ratios
and net benefits are unchanged from
Table 28.
The results show that as the success
of POP nutrition information declines
relative to on-package nutrition labels,
the cost-effectiveness measures for
Alternative 2 decline more rapidly than
those for Alternative 3, given the second
alternative’s entire reliance on POP
nutrition information. When POP
nutrition information is 10 percent as
successful as on-package nutrition
information labels (Table 29), the
average cost-effectiveness for
Alternatives 2 through 5 are
approximately the same (between $1.5
to $2.2 million per life saved). While the
average cost-effectiveness ratios of the
regulatory alternatives are
approximately the same, the annual net
benefits of the alternatives differ
significantly. This measure ranges from
$23 million for Alternative 2 to 10 times
that amount for Alternative 5 (Table 26).
It should be noted that the cost per life
saved associated with POP nutrition
information for nonmajor cuts of single
ingredient, raw meat and poultry
products under Alternative 2 exceeds
the value of a life saved and,
consequently, the annual benefits
associated with the measure are less
than the annual costs.
TABLE 29—AVERAGE COST-EFFECTIVENESS AND NET BENEFITS OF POTENTIAL LIVES SAVED —POP NUTRITION
INFORMATION 10 PERCENT AS SUCCESSFUL AS ON-PACKAGE NUTRITION LABEL INFORMATION
Potential lives
saved
Alternatives
Cost/life saved
7%
Value of lives
saved
Net benefit
7%
$ Million
Alternative 2. POP manuals for all products:
Total .................................................................................................................
Ground/chopped .......................................................................................
Major cuts .................................................................................................
Nonmajor cuts ..........................................................................................
Alternative 3. On-package labels for ground and chopped, POP placards for
major cuts:
Total .................................................................................................................
Ground/chopped .......................................................................................
Major cuts ........................................................................................................
5.7
1.1
3.9
0.7
1.457
.232
.236
10.562
31.3
6.3
21.3
3.7
23.0
6.0
20.4
¥3.4
15.2
11.4
3.9
2.156
2.633
.757
83.8
62.5
21.3
51.0
32.6
18.4
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Note: These estimates do not take into account the level of voluntary compliance with the labeling required under each alternative. Consequently, the estimated compliance costs as well as potential lives saved are overstated.
When POP nutrition information is 5
percent as successful as on-package
nutrition information labels (Table 30),
the average cost-effectiveness ratio for
Alternative 2 is higher than those for the
other alternatives and 15 percent higher
than that for Alternative 3. The annual
net benefit of POP nutrition information
for ground or chopped product under
Alternative 2 is declining to marginal
levels. The annual net benefit for
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Alternative 3 is nearly $40.3 million,
about 5 times that for Alternative 2.
Due to the differences in search costs
for consumers using a POP reference
manual versus a POP placard,
Alternative 2 is expected to be less
successful than Alternative 3 in
changing dietary patterns. If POP
manuals were 5 percent as successful as
on-package labels and placards were 10
percent as effective as on-package
labels, a plausible scenario, the cost per
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life saved for Alternative 3 would be
about 75 percent (2.156/2.915) of that
for Alternative 2. The number of lives
saved annually under Alternative 3
would be about 5 times (15.2/2.8) that
found under Alternative 2. The
uncertainty associated with the success
of a POP reference manual (Alternative
2) is an important factor supporting the
effectiveness of Alternative 3 and the
Agency’s decision to select this
alternative relative to Alternative 2.
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67791
TABLE 30—AVERAGE COST-EFFECTIVENESS AND NET BENEFITS OF POTENTIAL LIVES SAVED—POP NUTRITION
INFORMATION 5 PERCENT AS SUCCESSFUL AS ON-PACKAGE NUTRITION LABEL INFORMATION
Potential lives
saved
Alternatives
Cost/life saved
Value of lives
saved
Net benefit
$ million
Alternative 2. POP manuals for all products:
Total ...............................................................................................................
Ground/chopped .....................................................................................
Major cuts ...............................................................................................
Nonmajor cuts ........................................................................................
Alternative 3. On-package labels for ground and chopped, POP placards
for major cuts:
Total ...............................................................................................................
Ground/chopped .....................................................................................
Major cuts ...............................................................................................
2.8
0.6
1.9
0.3
2.915
.464
.472
21.125
15.63
3.13
10.70
1.85
13.3
11.4
1.9
2.470
2.633
1.514
73.16
62.51
10.65
7.4
2.9
9.7
¥5.3
40.3
32.59
7.72
Note: These estimates do not take into account the level of voluntary compliance with the labeling required under each alternative. Consequently, the estimated compliance costs as well as potential lives saved are overstated.
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Summary of Analysis of Alternatives
The analysis shows that the POP
information does not need to be highly
successful for its benefits to exceed its
costs, even at low levels of success
relative to on-package nutrition labels.
FSIS finds that the measures required
in the supplemental proposed rule are
generally more effective than the other
alternatives when all the qualitative and
quantitative evidence is considered. As
has been discussed above in this
section, FSIS finds that on-package
nutrition labels for ground or chopped
product are more effective than POP
nutrition information in informing
consumers about the nutritional
characteristics of these products, given
the nature of the product, its
presentation in the retail environment,
and consumer behavior. FSIS also finds
that POP nutrition placards are an
effective means for informing
consumers about the nutritional
characteristics of major cuts of single
ingredient, raw products for these same
reasons.
F. Summary of Costs and Benefits of the
Final Nutrition Labeling Rule
FSIS estimates that for the
supplemental proposed rule, the
discounted average present value of
benefits over a 20-year period using a 7
percent discount rate will be $2.2
billion and using a 3 percent discount
rate will be $3.7 billion, using a
composite of three scenarios for the
effectiveness of nutrition labels and
three values for reducing a premature
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death. The corresponding average
annual benefits are $205.5 million and
$248.3 million (See summary Table
30b).
The discounted average present value
costs, over a 20-year period, are
estimated to be $348.06 million using a
7 percent discount rate and $472.23
million using a 3 percent discount rate.
The corresponding annualized average
costs are $32.8 and $31.7 million (See
summary table 30b and Appendix D,
Tables 1 and 2).
After taking into account the current
assumed levels of compliance with the
supplemental proposed rule measures,
the average present value costs of the
rule decline to $115.45 million and
$156.72 million when using a 7 percent
and 3 percent discount rate,
respectively. The corresponding
annualized average costs are $10.9 and
$10.5 million. The average present
values of the benefits are $0.800 billion
and $1.358 billion using 7 and 3 percent
discount rates, respectively. The
corresponding average annual benefits
are $75.5 million and $91.3 million.
Table 30c provides a summary of these
annualized costs and benefits. These
estimates suggest that under plausible
assumptions, the impact of this rule in
any given year may be less than $100
million. However, given the
uncertainties in the analysis, this action
is deemed ‘‘economically significant’’.
Not included in the quantitative
analysis were other likely benefits to
providing nutrition labeling: increased
profits received by food retailers and
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manufacturers, and consumers buy
products with the attributes they want.
FSIS believes that the labeling
provisions help consumers make better
food choices and provide incentives to
producers to continue producing
nutritionally-improved products that
contribute substantially to the health
benefits associated with nutrition
labeling. If diet quality associations
found with all other labeled foods do
not hold up for nutrition labels on meat,
then health benefits in the FSIS report
are overestimated. Of course, health
benefits are only one way in which
benefits might be realized. Consumers
might choose to use nutritional
information to enhance enjoyment of
food, and not to raise their health status.
Further, they may be better off than if
they had raised their health status since
rational consumers will use information
to their best advantage. If we observe
rational, well-informed consumers
selecting a more enjoyable diet, for these
consumers a more enjoyable diet was
worth more than better health. Thus,
when we restrict benefits estimates to
allow only for information to be used to
advance health status, we are
simultaneously restricting estimated
benefits to a lower level of value to
consumers. The FSIS analysis imposes
that restriction and the resulting
benefits estimate must therefore be
interpreted as an underestimate of
overall benefits. The estimated costs of
the rule’s nutrition labeling
requirements appear to be justified by
the estimated benefits.
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TABLE 30b—SUMMARY OF ANNUALIZED AVERAGE NET PRESENT VALUES OF COSTS AND BENEFITS, BEFORE ACCOUNTING
FOR LEVELS OF CURRENT COMPLIANCE, $million/year
Units
Primary estimate
Category
Benefits:
Annualized ...........................................
Monetized* $million/year .....................
Qualitative:
Low estimate
High estimate
Year dollars
Discount
(percent)
Period
covered
205.5
185.6
230.8
2002
7 20 years.
248.3
228.4
273.6
2002
3 20 years.
Consumers might also choose to use nutritional information to enhance enjoyment of food, and not
just to raise their health status.
Costs:
Annualized ...........................................
Monetized* $million/year .....................
32.8
31.7
26.7
25.6
44.8
43.7
2002
2002
7
3
20 years.
20 years.
Notes: * Monetized benefits of potential lives saved.
Note: These estimates do not take into account the level of voluntary compliance with the nutrition labeling requirements for ground or
chopped products that currently exists. Consequently, the estimated amounts of ground or chopped products and major cuts impacted by this
supplemental proposed rule are overstated. Consequently, the estimated compliance costs as well as the monetized benefits of potential lives
saved are overstated.
TABLE 30c—SUMMARY OF ANNUALIZED AVERAGE NET PRESENT VALUES OF COSTS AND BENEFITS, AFTER ACCOUNTING
FOR ASSUMED LEVELS OF CURRENT COMPLIANCE, $million/year
Units
Primary estimate
Category
Benefits:
Annualized ........................................
Monetized* $million/year ...................
Qualitative:
Low estimate
High estimate
Year dollars
Discount
(percent)
Period
covered
75.5
68.1
84.8
2002
7
20 years.
91.3
83.9
100.6
2002
3
20 years.
Consumers might also choose to use nutritional information to enhance enjoyment of food, and not
just to raise their health status.
Costs:
Annualized ........................................
Monetized* $million/year ...................
10.9
10.5
8.9
8.6
14.7
14.4
2002
2002
7
3
20 years.
20 years.
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Notes: * Monetized benefits of potential lives saved.
Note: These estimates take into account the level of voluntary compliance with the nutrition labeling requirements for ground or chopped products that currently exists—the 68 percent compliance rate (NCBA, 2004) of voluntary nutrition labeling of ground or chopped products and 54.8
percent level of voluntary compliance (USDA, 1999) of stores that provide nutrition labeling for major cuts.
Regulatory Flexibility Act (RFA)—
Assessment
Based on the cost analysis above, FSIS
has made a tentative determination that
this rule would not have a significant
economic impact on a substantial
number of small entities, as defined by
the Regulatory Flexibility Act (5 U.S.C.
601). The supplemental proposed rule
would affect meat and poultry
processing establishments producing
ground or chopped products (Table 1
and 2) and retail firms and
establishments (Tables 3 and 4). There
are approximately 3,073 potentially
affected Federal and State processing
establishments and 47,688 potentially
affected retail firms with 74,910 retail
establishments. A ‘‘firm’’ refers to the
parent company and an ‘‘establishment’’
refers to the retail facility. Processing
establishments that grind or chop meat
and poultry will be potentially affected.
There are 1,433 very small, 858 small,
and 109 large Federal establishments
that produce ground or chopped
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products, based on PBIS (April, 2006).
The final regulatory analysis assumes
that no small processor is independent.
That is, all (regardless of their size) are
part of a larger organization. Table 13
shows the undiscounted costs of about
$53.80 million for all the affected
processing establishments.
FSIS does not believe that any very
small operations will be affected by the
regulation because very small meat and
poultry operations employ nine or fewer
employees. These establishments would
find it difficult to produce over 100,000
pounds per ground product annually
because these employees also process
other products. Annual revenues
associated with 100,000 pounds of
annual ground beef total approximately
$230,000 for 85 percent lean ground
beef, based on a retail value of $2.30 per
pound (Agricultural Marketing Service,
Market Reports, September 2009). Some
small establishments are also likely to
be exempt from the regulation because
they have 500 or fewer employees, or
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are owned by companies with 500 or
fewer employees, and FSIS assumes
they produce less than 100,000 pounds
annually of each ground product. FSIS
researched this issue to better address
the number of establishments that
would be affected but does not have
better data on corporations that own
these individual establishments.
However, as discussed earlier in the
final regulatory analysis, RTI made the
assumption that Federally-inspected
processing establishments generally are
a part of a larger organization that own,
on average, three establishments each.
In addition, based on PBIS (April 2006),
there are 41 state-inspected processing
establishments (Table 2) that are owned
by 41 firms. Therefore, there are about
899 (858 + 41) small processing
establishments that are affected by the
supplemental proposed rule.
As part of the Regulatory Flexibility
Assessment, FSIS also examined the
impact of the supplemental proposed
rule, by altering certain assumptions, to
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determine whether the supplemental
proposed rule could have a significant
impact on a substantial number of small
entities. Therefore, even though FSIS
believes that small processors would
find it difficult to produce over 100,000
pounds per ground product annually
because these employees also process
other products, FSIS estimated the cost
to small grinders if they were not
exempt from nutrition labeling
requirements. For purposes of this
alternative analysis, it is assumed that
all 899 small processing firms will be
affected by this regulation.45 Also, based
on the analysis for the supplemental
proposed rule, there are 6.6 frozen or
fresh ground meat or chopped meat and
poultry products produced per
company. For this alternative analysis,
it is assumed that there are 5,933
(899 × 6.6) unique ground or chopped
products. FSIS estimates that the onetime average costs of modifying product
labels on prepackaged ground or
chopped products to include nutrition
information at processing
establishments will be $13.33 million
($2,247 per label modification costs ×
896 affected companies × 6.6 affected
products per company) using average
cost estimates. The annualized cost over
20 years at 7 percent is $1.26 million.
On a per company basis the annualized
cost over 20 years is about $1,402 ($1.26
million/896).
In addition to the one-time costs of
designing labels, processing
establishments will also incur added
costs of larger labels. Again, it is
assumed that there are 899 small
processing establishments that grind or
chop meat and poultry, and that all
these establishments are small
businesses. Based on a study conducted
by NCBA, 25 percent of ground or
chopped meat and poultry packages are
packaged at processing establishments.
As explained above, approximately
437.5 million packages of ground and
chopped meat and poultry products are
packed by processing establishments
each year. There are no data available to
estimate the number of packages of
ground or chopped meat or poultry
products packaged by these small
establishments, but (for purposes of this
analysis) if 25 percent of all of the
packages originate at small
establishments, then these 899
companies package 109.4 million
packages annually (437.5 million × .25).
Multiplying 109.4 million packages by
45 Although
RTI, in their analysis stated that all
of these businesses are large, for this analysis, FSIS
is altering the assumption in order to determine the
impact (measure the sensitivity) of a set of
alternative assumptions.
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0.5 cents per label (RTI, 2003) results in
an annual cost of $547,000 (109.4
million packages × $0.005) or about
$509 per company. In total, FSIS
estimates that (under the alternative set
of assumptions that all small entities
will be affected by this supplemental
proposed rule and that they package 25
percent of the total) the cost to these 899
small companies (assuming that they
package 25 percent of the total) will be
about $1,616 ($1,107 + $509) per
company on an annualized basis using
a 7 percent discount rate.
If, on the other hand, 50 percent of all
packages from processing
establishments originate at the small
establishments, then these 899
companies package about 219 million
packages annually. Multiplying 219
million packages by $0.005 per label
results in an annual cost of $1,095,000
or $1,218 per company. In total, FSIS
estimates that the cost to 899 small
companies (under the alternative set of
assumptions that all small entities will
be affected by this supplemental
proposed rule and that they package 50
percent of the total) will be about $2,126
per company ($1,402 + $1,218) on an
annualized basis discounted at 7
percent.
Small retail stores will incur the cost
of providing POP nutrition information
for the major cuts. There are 47,422
small retail firms that own 51,431 small
retail stores that would be required to
provide POP information for the major
cuts of single-ingredient, raw products.
FSIS estimates that the cost to a retail
store for placards will be $10.56 for
labor plus $65.17 for materials or
approximately $75.73 per store. The
annualized cost, assuming that the
placards have to be replaced every two
years, is about $41.88 using a 7 percent
discount rate. All retail stores, including
small and very small businesses will
incur these costs. FSIS believes that
these costs are not significant—even for
very small businesses.
Retail stores will also incur costs
related to required nutrition labels for
ground or chopped products. For this
analysis, it is assumed that they will all
comply by following Option 1 (the less
costly printing method for labels)
because it is the least costly. Based upon
the information contained in the
regulatory analysis, a total of 74,910
establishments owned by 47,688 firms
could potentially be affected. However,
23,479 establishments owned by 266
firms are considered to be large
according to the 2002 Economic Census.
If they grind or chop over 100,000
pounds of a particular product annually,
then as many as 51,431 small
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establishments owned by 47,422 firms
could potentially be affected.46
For these establishments, it is
assumed that there would be only one
scale-printer system instead of the 1.5
scale-printer systems that was assumed
in the regulatory analysis. Therefore, the
average cost of upgrading scale-printer
systems is estimated at $1,600, and this
cost would be incurred by these
businesses once every five years. FSIS
estimates that the annualized cost, since
scale-printer systems need to be
replaced every 5 years, is about $390
using a 7 percent discount rate.
Operating and maintenance costs are
estimated at 6 percent (See
supplemental PRIA for detailed
explanation) or $96 annually. Therefore,
the sum of the annualized maintenance
costs at 7 percent is estimated at $486
annually per establishment ($390 +
$96).
The average cost of redesigning larger
store labels and conducting nutrition
analysis is estimated at $2,247.
However, many firms have more than
one establishment so the cost per
establishment will be much lower.
Assuming that each establishment had
to redesign its store labels for 4.6
products and conduct nutrition analysis
for each unique product, then the added
annualized cost over 20 years is
estimated at $766 using a 7 percent
discount rate.
The use of larger labels is another cost
that these retail stores will incur. As
explained above, an estimated 1.75
billion packages of ground or chopped
meat or poultry products are sold at
large retail facilities. Therefore, 460
million packages of ground or chopped
products are sold at small retail
establishments. Given that 51,431 small
retail establishments could be affected,
then each small establishment (460
million packages/51,431 establishments)
sells 8,039 packages annually. If the
added average cost of each label is
$0.005, then each retail store will incur
an added cost of about $40 annually
($8,039 packages per establishment ×
.005).
FSIS estimates that using a 7 percent
discount rate the sum of the annual/
annualized cost to each retail
establishment will be $42 for nutrition
information placards, $486 for
upgrading and maintaining scale-printer
systems, $969 for redesigning larger
store logo labels, and $40 for using
larger labels. The total annual/
46 RTI believes that all of these businesses will be
exempt from nutrition labeling requirements. For
purposes of conducting a sensitivity analysis, this
analysis assumes that they are small for purposes
of the Regulatory Flexibility Act and that they will
not qualify for the small business exemption.
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annualized cost using a 7 percent
discount rate will be $1,537. FSIS also
estimates that using a 3 percent
discount rate the total annual/
annualized cost using a 3 percent
discount rate will be $1,216. In
summary, FSIS concludes from using an
alternate set of assumptions, that this
supplemental proposed rule would not
have a significant impact on a
substantial number of small entities.
FSIS is cognizant of the possibility
that while exempted establishments
would not have to incur labeling costs,
they also might not realize the benefits
of increased sales of the nutritionally
labeled products. This is because if
demand for the labeled product
increases relative to demand for nonlabeled products, the exempt
establishments would lose their market
shares to the nonexempt establishments
producing nutritionally labeled
products. Therefore, to keep their
market shares, these exempt
establishments are likely to voluntarily
include nutrition information on the
product label. Such a strategy would
minimize any adverse impact on these
smaller establishments. It would,
however, also increase their labeling
costs. Economic theory dictates that
these establishments would compare the
costs of nutrition labels with the
benefits of retaining their market shares
and would decide to label their
products if the benefits of increasing the
market shares exceed the label costs.
Nutrition labeling would be required,
either on the product label or on POP
materials, for the major cuts. Therefore,
if manufacturers do not provide
nutrition information on the label,
retailers would be required to provide
this information at the POP or on
product labels. However, as noted
above, this requirement should not
impose major costs or other burdens.
The annual/annualized cost to each
retail establishment will be $42 for
nutrition information placards.
The economic impact on retail stores
is likely to be minimal because recently
there has been consolidation of these
stores as a consequence of mergers and
acquisitions, resulting in an increased
market share of large retailers relative to
small ones. For example, several years
ago Royal Ahold, the Dutch
Conglomerate, bought out Giant Food.
Also, Ahold announced the pending
purchase of Supermarket General-II
Holdings Corporation, parent of the
Pathmark chain. Similarly,
SUPERVALUE acquired Richfood, Food
Lion bought out Hannaford Brothers and
Scarborough, and Albertson’s purchased
American Stores. (Sean Mehegan,
‘‘Consolidation Changes the Face of the
North American Supermarket Sector,’’
Meat & Poultry (September 1999): 22–
25). More recently, Wal-Mart through its
operation Wal-Mart Puerto Rico agreed
to acquire Supermercados Amigo, the
leading supermarket chain in Puerto
Rico. These mergers and acquisitions
are likely to increase market shares of
the large retailers at the cost of smaller
ones.
Based on the 2002 Economic Census
of the U.S. Department of Commerce,
meat and poultry processing
establishments that are small entities
had annual revenues from total value of
shipments that ranged from $0.454
million to $96.038 million. For each
processing (grinding) establishment,
average costs as a percent of revenues
range from a lower bound of 0.001
percent ($1,402/$96.038 million to an
upper bound of 0.3 percent ($1,402/
$0.454 million). Further, small entity
retail stores (supermarkets and other
grocery (except convenience) stores and
meat market stores) had annual
revenues from sales that ranged from
$0.343 million to $8.873 million. Also,
the companies or firms of the small
retail stores had annual revenues from
sales that ranged from $0.343 million to
$48.342 million. Costs as a percent of
revenues range from the lower bound of
0.02 percent ($1,537/$8.873 million) to
the upper bound of 0.4 percent ($1,537/
$0.343 million). Many of these retail
firms that are small entities own
multiple retail stores that are small
entity supermarkets and other grocery
(except convenience) stores.
The following table shows the
upfront, first year costs for all
businesses affected by the rule,
compared to the first year, upfront costs
for small businesses. The table also
shows the percent of total first year
costs of the rule that will be incurred by
small businesses. Based on the cost
estimates for the rule, assuming retailers
choose Option 1 for labeling ground or
chopped products, small businesses will
incur 10.1 percent of total estimated
first year costs.
TABLE 32—DISTRIBUTION OF FIRST YEAR COSTS—3 PERCENT DISCOUNT RATE
Option 1
retail
Option 2
retail
Processing
plant
Option 1
retail +
processing
plant
Option 2
retail +
processing
plant
Option 1
retail
$ Million
All entities ................
Only small entities ...
61.88
2.84
39.88
2.84
Option 2
retail
Processing
plant
Option 1
retail +
processing
plant
Option 2
retail +
processing
plant
$ Million—Present value
6.00
3.98
67.88
6.82
45.88
6.82
60.09
2.76
38.72
2.76
5.83
3.86
65.91
6.62
44.55
6.62
4.59
7.12
66.33
10.05
14.86
Option 1
retail +
processing
plant
Option 2
retail +
processing
plant
Percent
Small entitles share
of total costs .........
4.59
7.12
66.33
10.05
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TABLE 33—DISTRIBUTION OF FIRST YEAR COSTS—7 PERCENT DISCOUNT RATE
Option 1
retail
Option 2
retail
Processing
plant
Option 1
retail +
processing
plant
Option 2
retail +
processing
plant
Option 1
retail
$ Million
All Entities ................
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retail
Processing
plant
$ Million—Present value
6.00
67.88
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57.86
37.29
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TABLE 33—DISTRIBUTION OF FIRST YEAR COSTS—7 PERCENT DISCOUNT RATE—Continued
Option 1
retail
Only small entities ...
Option 2
retail
2.84
Processing
plant
2.84
Option 1
retail +
processing
plant
Option 2
retail +
processing
plant
Option 1
retail
Option 2
retail
6.82
6.82
2.66
2.66
4.59
7.12
3.98
Option 1
retail +
processing
plant
Option 2
retail +
processing
plant
3.72
6.38
6.38
66.33
10.05
14.86
Processing
plant
Percent
Small entitles share
of total costs .........
4.59
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Executive Order 12988
This supplemental proposed rule has
been reviewed under Executive Order
12988, Civil Justice Reform. States and
local jurisdictions are preempted by the
Federal Meat Inspection Act (FMIA) and
the Poultry Products Inspection Act
(PPIA) from imposing any marking,
labeling, packaging, or ingredient
requirements on Federally inspected
meat and poultry products that are in
addition to, or different than, those
imposed under the FMIA or the PPIA.
However, States and local jurisdictions
may exercise concurrent jurisdiction
over meat and poultry products that are
outside official establishments for the
purpose of preventing the distribution
of meat and poultry products that are
misbranded or adulterated under the
FMIA or PPIA, or, in the case of
imported articles, which are not at such
an establishment, after their entry into
the United States.
The supplemental proposed rule
would not be intended to have
retroactive effect.
Administrative proceedings would
not be required before parties may file
suit in court challenging this rule.
However, the administrative procedures
specified in §§ 306.5 and 381.35 must be
exhausted before there is any judicial
challenge of the application of the rule,
if the challenge involves any decision of
an FSIS employee relating to inspection
services provided under FMIA and
PPIA.
Paperwork Requirements
Title: Nutrition labeling of ground or
chopped meat and poultry products and
single-ingredient products.
Type of Collection: New.
Abstract: FSIS has reviewed the
paperwork and record keeping
requirements in this supplemental
proposed rule in accordance with the
Paperwork Reduction Act. Should this
rule become final, FSIS will require
several information collection and
recordkeeping activities. FSIS will
requiring nutrition labeling on the major
cuts of single-ingredient, raw meat and
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66.33
10.05
14.86
poultry products, either on their label or
at their POP, unless an exemption
applies. If the manufacturer provides
nutrition information on the label of
individual packages of the major cuts of
single-ingredient, raw meat or poultry
products, the retailer would not be
required to provide the information at
the POP. However, if the manufacturer
does not provide the nutrition
information on the label of these
products, the retailer would be required
to provide the information at their POP.
In the estimate of burden below, FSIS is
calculating that all retailers would
display POP information for the major
cuts of single-ingredient, raw meat and
poultry products, because this is a lowcost means of providing nutrition
information for multiple products, and
because this rule will not require that
manufacturers include nutrition labels
on the major cuts of single-ingredient,
raw meat and poultry products. FSIS is
also requiring nutrition labels on all
ground or chopped meat and poultry
products, with or without added
seasonings, unless an exemption
applies.
Estimate of burden: FSIS estimates
that obtaining POP materials and
making them available for consumers
would take an average of 30 minutes.
FSIS believes that the nutrition
information on most POP materials will
be based on the most current
representative database values
contained in USDA’s National Nutrient
Data Bank or the USDA National
Nutrient Database for Standard
Reference. FSIS also believes it is
unlikely that there will be any nutrition
claims made on the POP materials on
the basis of the representative data base
values. Therefore, these products will
not be subject to FSIS compliance
review, and there will be no
recordkeeping requirements based on
this information.
FSIS estimates that developing
nutrition labels for ground or chopped
products would take an average of 6
hours. Labels developed at official
establishments would be submitted to
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FSIS. FSIS estimates that each official
establishment that produces ground or
chopped product would submit 6.6
labels to FSIS for approval. FSIS
estimates that it would take an average
of 1.5 hours to prepare and submit the
form for prior approval. All ground or
chopped product would be subject to
FSIS compliance review; therefore,
producers of ground or chopped
product would be required to maintain
records to support the validity of
nutrient declarations contained on
product labels. FSIS estimates the
average time for recordkeeping would
be 30 minutes.
Respondents: Meat and poultry
establishments and retail stores.
Estimated number of respondents:
75,539.
Estimated number of responses per
respondent: 18.04.
Estimated total annual burden on
respondents: 66,062 hours
Copies of this information collection
assessment can be obtained from John
O’Connell, Paperwork Reduction Act
Coordinator, Food Safety and Inspection
Service, USDA, 112 Annex, 300 12th
St., Washington, DC 20250. Comments
are invited on: (a) Whether the proposed
collection of information is necessary
for the proper performance of FSIS’s
functions, including whether the
information will have practical utility;
(b) the accuracy of FSIS’s estimate of the
burden of the proposed collection of
information, including the validity of
the methodology and assumptions used;
(c) ways to enhance the quality, utility,
and clarity of the information to be
collected; and (d) ways to minimize the
burden of the collection of information
on those who are to respond, including
through the use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques, or other forms of
information technology. Comments may
be sent to both John O’Connell,
Paperwork Reduction Act Coordinator,
at the address provided above, and the
Desk Officer for Agriculture, Office of
Information and Regulatory Affairs,
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Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 / Proposed Rules
Office of Management and Budget,
Washington, DC 20253.
To be most effective, comments
should be sent to OMB within 60 days
of the publication date of this
supplemental proposed rule.
E-Government Act Compliance
FSIS is committed to complying with
the E-Government Act, to promote the
use of the Internet and other
information technologies to provide
increased opportunities for citizen
access to Government information and
services, and for other purposes.
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Additional Public Notification
Public awareness of all segments of
rulemaking and policy development is
important. Consequently, in an effort to
ensure that minorities, women, and
persons with disabilities are aware of
this supplemental proposed rule, FSIS
will announce it on-line through the
FSIS Web page located at https://
www.fsis.usda.gov/
regulations_&_policies/
2009_Proposed_Rules_Index/index.asp.
FSIS also will make copies of this
Federal Register publication available
through the FSIS Constituent Update,
which is used to provide information
regarding FSIS policies, procedures,
regulations, Federal Register notices,
FSIS public meetings, and other types of
information that could affect or would
be of interest to constituents and
stakeholders. The Update is
communicated via Listserv, a free
electronic mail subscription service for
industry, trade groups, consumer
interest groups, health professionals and
other individuals who have asked to be
included. The Update is available on the
FSIS Web page. Through the Listserv
and the Web page, FSIS is able to
provide information to a much broader
and more diverse audience.
In addition, FSIS offers an e-mail
subscription service which provides
automatic and customized access to
selected food safety news and
information. This service is available at
https://www.fsis.usda.gov/
news_and_events/email_subscription/.
Options range from recalls to export
information to regulations, directives
and notices. Customers can add or
delete subscriptions themselves, and
have the option to password protect
their accounts.
References
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Information, Implications for Food
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Buzby, and Paul Frenzen, ‘‘Food Safety
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Crutchfield, Stephen, Fred Kuchler, and
Jayachandian N. Variyam. ‘‘The
Economic Benefits of Nutrition Labeling:
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Dopp, M.D., American Meat Institute (AMI),
Arlington, VA. 2001. Re: Docket #98–
005F, Food Safety and Inspection
Service Proposed Rule: ‘‘Nutrition
Labeling of Ground or Chopped Meat
and Poultry Products and SingleIngredient Products.’’ Comments
submitted to the FSIS Docket Clerk,
Washington, DC.
Food and Drug Administration (60 FR 65095,
December 18, 1995). Procedures for the
Safe and Sanitary Processing and
Importing of Fish and Fishery Products;
Final Rule.
Food and Drug Administration (68 FR
41434–41504, July 11, 2003). Food
Labeling: Trans Fatty Acids in Nutrition
labeling, Nutrient Content Claims, and
Health Claims; Final Rule.
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56824–56906, September 22, 2004).
Prevention of Salmonella Enteritidis in
Shell Eggs During Production; Proposed
Rule.
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Mitchell. Economics of Food Labeling.
U.S. Dept. of Agr., Econ. Res. Serv., AER
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Hadden, Susan G. 1986. Read the Label:
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Ippolito, Pauline M., and Alan Mathios.
1990b. ‘‘Information Advertising, and
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Market,’’ Rand Journal of Economics
21(3): 459–80.
Ippolito, Pauline M., and Alan Mathios.
1991. ‘‘Information, Advertising, and
Health: A Study of the Cereal Market.’’
In Economics of Food Safety, ed. Julie
Caswell. Elseview Science Publishing
Co., New York.
Ippolito, Pauline M., and Alan Mathios.
1995. ‘‘Information and Advertising: The
Case of Fat Consumption in the United
States.’’ American Economic Review
85(2): 91–95.
Kim, Sung-Yong, R.M. Nayaga, Jr., and Oral
Capps, Jr. ‘‘The Effect of Food Label Use
on Nutrient Intakes: An Endogenous
Switching Regression Analysis’’, Journal
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Kuchler, Fred and Elise Golan, 1999.
Assigning Value to Life: Comparing
Methods for Valuing Health Risks,
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U.S. Dept. Agric., Econ. Res. Service,
Washington, DC.
Lancaster, Kelvin J., ‘‘A New Approach to
Consumer Theory.’’ Journal of Political
Economy, 74 (1966) pp 132–156.
Magat, Wewsley, and W. Kip Viscusi. 1992.
Informational Approaches to Regulation
(Cambridge, MA: MIT Press).
Mancino, Lisa, and Fred Kuchler. ‘‘Offsetting
Behavior in Reducing High Cholesterol:
Substitution of Medication for Diet and
Lifestyle Changes.’’ The Journal of
Choice Modelling, Vol. 1, Issue 2, Spring
2009, pp.51–64.
Mathios. A.D., and P.M. Ippolito. 1998. Food
companies spread nutrition information
through advertising and labels. Food
Review. 21(2), 38–43.
McGowan, A., NCBA, Centennial, CO. April
9, 2003. Personnal communication with
Mary Muth, RTI International, Research
Triangle Park, NC.
Moorman, Christine. 1996 ‘‘A Quasi
Experiment to Assess the Consumer and
Informational Determinants of Nutrition
Information Processing Activities: The
Case of the Nutrition Labeling and
Education Act,’’ Journal of Public Policy
and Marketing 15(1): 28–44.
Muth, M.K., E.C. Gledhill, and S.A. Karns.
January, 2003. ‘‘FDA Labeling Cost
Model.’’ Prepared for the U.S. Food and
Drug Administration, Center for Food
Safety and Applied Nutrition. Research
Triangle Park, NC. RTI International.
National Cattlemen’s Beef Association. 2004.
National Meat Case Study.
National Cattlemen’s Beef Association. 2009.
The Journey towards Retail Meat Case
Nutrition Labeling, A white paper,
November 2009. https://
www.beefretail.org/CMDocs/BeefRetail/
nutrition/
NutritionLabelingWhitePaper.pdf.
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Illinois. 1995.
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Health and Wellness Trends Database.
Harleysville, PA. As reported in Food
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Neuhouser, M.L., Kristal, A.R., and Patterson,
R.E. 1999. ‘‘Use of food nutrition labels
is associated with lower fat intake’’.
Journal of the American Dietetic
Association, 99, 45–53.
Noah, Lars. 1994. ‘‘The Imperative to Warn:
Disentangling the ‘‘Right to Know’’ from
the ‘‘Need to Know’’ about Consumer
Product Hazards’’ Yale Journal on
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Office of Management and Budget, 2002.
Guidelines for Ensuring and Maximizing
the Quality, Objectivity, Utility, and
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RTI, International. Cost Analysis for
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Products: May 2003, revised final report,
May 20, 2003.
Schuller, B., Hobart Corporation, Troy, OH.
April 16, 2003. Personal communication
with Mary Muth, RTI International,
Research Triangle Park, NC.
Stigler, George, J. ‘‘The Economics of
Information.’’ Journal of Political
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Teisl, Mario F. and Alan S. Levy. ‘‘Does
Nutrition Labeling Lead to Healthier
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Teisl, Mario F., N.E. Bockstael, and A. S.
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U.S. Department of Agriculture, December
1996. Nutrition Labeling/Safe Handling
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1999. Nutrition Labeling/Safe Handling
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OPPDE/rdad/FRPubs/98–005P/Rpt1999–
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Variyam, Jaychandram N., James Blaylock,
and David Smallwood, Modeling
Nutrient Intake; The Role of Dietary
Information. U.S. Dept. of Agr., Econ.
Res. Serv., TB–1842, 1995.
Variyam, Jaychandram N., James Blaylock,
and David Smallwood, Diet-Health
Information and Nutrition: The Intake of
Dietary Fats and Cholesterol. U.S. Dept.
of Agr., Econ. Res. Serv., TB–1855, 1997.
Viscusi, W.K. Fatal Tradeoffs—Public &
Private Responsibilities for Risk. New
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Zarkin, Gary A., Nancy Dean, Josephine A.
Mauskopf, and Dierdre M. Neighbors,
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Triangle Institute, Research Triangle
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Zarkin,Gary A., Nancy Dean, Josephine A.
Mauskopf, and Richard Williams,
‘‘Potential Health Benefits of Nutrition
Label Changes,’’ American Journal of
Public Health 83(5) (May 1993): 717–
724).
Section III
List of Subjects
9 CFR Part 317
Food labeling, Food packaging, Meat
Inspection, Nutrition, Reporting and
recordkeeping requirements.
9 CFR Part 381
Food labeling, Food packaging,
Nutrition, Poultry and poultry products,
Reporting and recordkeeping
requirements.
For the reasons stated in the
preamble, FSIS is proposing to amend 9
CFR Chapter III, as follows:
PART 317—LABELING, MARKING
DEVICES AND CONTAINERS
1. The authority citation for part 317
continues to read as follows:
Authority: 21 U.S.C 601–695; 7 CFR 2.18,
2.53.
2. Section 317.300 is revised to read
as follows:
§ 317.300 Nutrition labeling of meat and
meat food products.
(a) Unless the product is exempted
under § 317.400, nutrition labeling must
be provided for all meat and meat food
products intended for human
consumption and offered for sale,
except single-ingredient, raw products
that are not ground or chopped products
described in § 317.301 and are not major
cuts of single-ingredient, raw meat
products identified in § 317.344.
Nutrition labeling must be provided for
the major cuts of single-ingredient, raw
meat products identified in § 317.344,
either in accordance with the provisions
of § 317.309 for nutrition labels, or in
accordance with the provisions of
§ 317.345 for POP materials, except as
exempted under § 317.400. For all other
products for which nutrition labeling is
required, including ground or chopped
meat products described in § 317.301,
nutrition labeling must be provided in
accordance with the provisions of
§ 317.309, except as exempted under
§ 317.400.
(b) Nutrition labeling may be
provided for single-ingredient, raw meat
products that are not ground or chopped
meat products described in § 317.301
and that are not major cuts of singleingredient, raw meat products identified
in § 317.344, either in accordance with
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the provisions of § 317.309 for nutrition
labels, or in accordance with the
provisions of § 317.345 for point-ofpurchase materials.
3. A new § 317.301 is added to read
as follows:
§ 317.301 Required nutrition labeling of
ground or chopped meat products.
(a) Nutrition labels must be provided
for all ground or chopped products
(livestock species) and hamburger with
or without added seasonings (including,
but not limited to, ground beef, ground
beef patties, ground sirloin, ground
pork, and ground lamb) that are
intended for human consumption and
offered for sale, in accordance with the
provisions of § 317.309, except as
exempted under § 317.400.(b).
[Reserved]
4. Section 317.309 is amended as
follows:
a. In paragraph (b)(3), the first
sentence is amended by adding ‘‘that are
not ground or chopped meat products
described in § 317.301’’ after the phrase
‘‘single-ingredient, raw products’’, and
by removing ‘‘as set forth in
§ 317.345(a)(1)’’; the second sentence is
amended by adding, ‘‘that are not
ground or chopped meat products
described in § 317.301’’ after the phrase
‘‘single-ingredient, raw products’’, and
the following new sentence is added
after the first sentence: ‘‘For singleingredient, raw products that are not
ground or chopped meat products
described in § 317.301, if data are based
on the product ‘as consumed,’ the data
must be presented in accordance with
§ 317.345(d).’’
b. Paragraph (b)(10) is amended by
adding the following new sentence at
the end of the paragraph: ‘‘The
declaration of the number of servings
per container need not be included in
nutrition labeling of single-ingredient,
raw meat products that are not ground
or chopped meat products described in
§ 317.301, including those that have
been previously frozen.’’
c. Paragraph (b)(11) is amended by
adding the phrase ‘‘single-ingredient,
raw products that are not ground or
chopped meat products described in
§ 317.301 and’’ after ‘‘exception of’’.
d. Paragraph (d)(3)(ii) is amended by
removing the period and adding ‘‘or on
single-ingredient, raw meat products
that are not ground or chopped meat
products described in § 317.301.’’ at the
end of the paragraph.
e. Paragraph (e)(3) is amended by
adding ‘‘, but may be on the basis of as
consumed for single-ingredient, raw
meat products that are not ground or
chopped meat products described in
§ 317.301,’’ after ‘‘as packaged’’.
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f. Paragraph (h)(9) is amended by
removing the phrase ‘‘(including ground
beef)’’, by adding, ‘‘that are not ground
or chopped meat products described in
§ 317.301’’ after ‘‘products’’, by
removing the phrase, ‘‘its published
form, the Agriculture Handbook No. 8
series available from the Government
Printing Office’’, and by adding, in its
place, ‘‘its released form, the USDA
National Nutrient Database for Standard
Reference’’, and by removing the period
and adding the following at the end of
the paragraph: as provided in
§ 317.345(e) and (f).’’
§ 317.343
[Amended]
5. Section 317.343 is removed.
6. Section 317.344 is amended by
removing the phrases ‘‘ground beef
regular without added seasonings,
ground beef about 17% fat,’’ and
‘‘ground pork.’’
7. Section 317.345 is amended as
follows:
a. The section heading and paragraphs
(a) and (c) are revised.
b. Paragraph (d) is amended by
removing ‘‘should’’ and adding, in its
place, ‘‘for products covered in
paragraphs (a)(1) and (a)(2) must’’.
c. Paragraph (e) is amended by
removing ‘‘its published form, the
Agriculture Handbook No. 8 series’’ and
by adding, in its place, ‘‘its released
form, the USDA National Nutrient
Database for Standard Reference’’, and
by removing ‘‘(including ground beef)’’.
d. Paragraph (f) is amended by adding
‘‘provided’’ after ‘‘nutrition information
is’’.
e. Paragraph (g) is amended by
removing the phrase ‘‘(including ground
beef)’’.
The revisions read as follows:
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§ 317.345 Nutrition labeling of singleingredient, raw meat products that are not
ground or chopped products described in
§ 317.301.
(a)(1) Nutrition information on the
major cuts of single-ingredient, raw
meat products identified in § 317.344,
including those that have been
previously frozen, is required, either on
their label or at their point-of-purchase,
unless exempted under § 317.400. If
nutrition information is presented on
the label, it must be provided in
accordance with § 317.309. If nutrition
information is presented at the point-ofpurchase, it must be provided in
accordance with the provisions of this
section.
(2) Nutrition information on singleingredient, raw meat products that are
not ground or chopped meat products
described in § 317.301 and are not major
cuts of single-ingredient, raw meat
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products identified in § 317.344,
including those that have been
previously frozen, may be provided at
their point-of-purchase in accordance
with the provisions of this section or on
their label, in accordance with the
provisions of § 317.309.
(3) A retailer may provide nutrition
information at the point-of-purchase by
various methods, such as by posting a
sign or by making the information
readily available in brochures,
notebooks, or leaflet form in close
proximity to the food. The nutrition
labeling information may also be
supplemented by a video, live
demonstration, or other media. If a
nutrition claim is made on point-ofpurchase materials, all of the format and
content requirements of § 317.309
apply. However, if only nutrition
information—and not a nutrition
claim—is supplied on point-of-purchase
materials, the requirements of § 317.309
apply, provided, however:
(i) The listing of percent of Daily
Value for the nutrients (except vitamins
and minerals specified in § 317.309
(c)(8)) and footnote required by
§ 317.309(d)(9) may be omitted; and
(ii) The point-of-purchase materials
are not subject to any of the format
requirements.
*
*
*
*
*
(c) For the point-of-purchase
materials, the declaration of nutrition
information may be presented in a
simplified format as specified in
§ 317.309(f).
*
*
*
*
*
8. Section 317.362 is amended by
adding a new paragraph (f) to read as
follows:
§ 317.362 Nutrient content claims for fat,
fatty acids, and cholesterol content.
*
*
*
*
*
(f) A statement of the lean percentage
may be used on the label or in labeling
of ground or chopped meat products
described in § 317.301 when the
product does not meet the criteria for
‘‘low fat,’’ defined in § 317.362(b)(2),
provided that a statement of the fat
percentage is contiguous to and in
lettering of the same color, size, type,
and on the same color background, as
the statement of the lean percentage.
9. Section 317.400 is amended by:
a. Revise paragraph (a)(1) introductory
text.
b. Paragraph (a)(1)(ii) is amended by
adding ‘‘, including a single retail
store,’’ after the phrase ‘‘single-plant
facility,’’ and by adding, ‘‘, including a
multi-retail store operation,’’ after
‘‘company/firm’’.
c. Paragraph (a)(7)(i) is amended by
removing the semi-colon and ‘‘and’’ and
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by adding the following at the end of the
paragraph:
‘‘, provided, however, that this
exemption does not apply to ready-toeat ground or chopped meat products
described in § 317.301 that are packaged
or portioned at a retail establishment,
unless the establishment qualifies for an
exemption under (a)(1);’’.
d. Paragraph (a)(7)(ii) is amended by
removing the period and by adding the
following at the end of the paragraph:
‘‘, provided, however, that this
exemption does not apply to multiingredient ground or chopped meat
products described in § 317.301 that are
processed at a retail establishment,
unless the establishment qualifies for an
exemption under (a)(1); and’’
e. Add a new paragraph (a)(7)(iii).
f. Paragraph (d)(1) is amended by
removing the period at the end of the
first sentence, and by adding the
following to the end of the first
sentence: ‘‘, except that this exemption
does not apply to the major cuts of
single-ingredient, raw meat products
identified in § 317.344.’’
The revision and addition read as
follows:
§ 317.400
labeling.
Exemption from nutrition
(a) * * *
(1) Food products produced by small
businesses, other than the major cuts of
single-ingredient, raw meat products
identified in § 317.344 produced by
small businesses, provided that the
labels for these products bear no
nutrition claims or nutrition
information, and ground or chopped
products described in § 317.301
produced by small businesses that bear
a statement of the lean percentage and
fat percentage on the label or in labeling
in accordance with § 317.362(f),
provided that labels or labeling for these
products bear no other nutrition claims
or nutrition information,
*
*
*
*
*
(7) * * *
(iii) Products that are ground or
chopped at an individual customer’s
request.
*
*
*
*
*
PART 381—POULTRY PRODUCTS
INSPECTION REGULATIONS
10. The authority citation for part 381
continues to read as follows:
Authority: 7 U.S.C. 138f, 450; 21 U.S.C.
451–470; 7 CFR 2.18, 2.53.
11. Section 381.400 is revised to read
as follows:
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§ 381.400 Nutrition labeling of poultry
products.
(a) Unless the product is exempted
under § 381.500, nutrition labeling must
be provided for all poultry products
intended for human consumption and
offered for sale, except singleingredient, raw products that are not
ground or chopped products described
in § 381.401 and are not major cuts of
single-ingredient, raw poultry products
identified in § 381.444. Nutrition
labeling must be provided for the major
cuts of single-ingredient, raw poultry
products identified in § 381.444, either
in accordance with the provisions of
§ 381.409 for nutrition labels, or in
accordance with the provisions of
§ 381.445 for point-of-purchase
materials, except as exempted under
§ 381.500. For all other products that
require nutrition labeling, including
ground or chopped poultry products
described in § 381.401, nutrition
labeling must be provided in accordance
with the provisions of § 381.409, except
as exempted under § 381.500.
(b) Nutrition labeling may be
provided for single-ingredient, raw
poultry products that are not ground or
chopped poultry products described in
§ 381.401 and that are not major cuts of
single-ingredient, raw poultry products
identified in § 381.444, either in
accordance with the provisions of
§ 381.409 for nutrition labels, or in
accordance with the provisions of
§ 381.445 for point-of-purchase
materials.
12. A new § 381.401 is added to read
as follows:
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§ 381.401 Required nutrition labeling of
ground or chopped poultry products.
Nutrition labels must be provided for
all ground or chopped poultry (kind)
with or without added seasonings
(including, but not limited to, ground
chicken, ground turkey, and (kind)
burgers) that are intended for human
consumption and offered for sale, in
accordance with the provisions of
§ 381.409, except as exempted under
§ 381.500.
13. Section 381.409 is amended as
follows:
a. Revise paragraph (b)(3).
b. Paragraph (b)(10) is amended by
adding the following new sentence at
the end of the paragraph: ‘‘The
declaration of the number of servings
per container need not be included in
nutrition labeling of single-ingredient,
raw poultry products that are not
ground or chopped poultry products
described in § 381.401, including those
that have been previously frozen.’’
c. Paragraph (b)(11) is amended by
adding the phrase ‘‘single-ingredient,
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raw products that are not ground or
chopped poultry products described in
§ 381.401 and’’ after ‘‘exception of’’.
d. Paragraph (d)(3)(ii) is amended by
removing the period and adding ‘‘or on
single-ingredient, raw poultry products
that are not ground or chopped poultry
products described in § 381.401.’’ at the
end of the paragraph.
e. Paragraph (e)(3) is amended by
adding ‘‘, but may be on the basis of ‘‘as
consumed’’ for single-ingredient, raw
poultry products that are not ground or
chopped poultry products described in
§ 381.401,’’ after ‘‘as packaged’’.
f. Paragraph (h)(9) is amended by
adding, ‘‘that are not ground or chopped
poultry products described in
§ 381.401’’ after ‘‘products’’, by
removing the phrase, ‘‘its published
form, the Agriculture Handbook No. 8
series’’, and by adding, in its place, ‘‘its
released form, the USDA National
Nutrient Database for Standard
Reference’’, and by removing the period
and adding the following at the end of
the paragraph: ‘‘, as provided in
§ 381.445(e) and (f).’’
The revision reads as follows:
§ 381.409
Nutrition label content.
*
*
*
*
*
(b) * * *
(3) The declaration of nutrient and
food component content shall be on the
basis of the product ‘‘as packaged’’ for
all products, except that singleingredient, raw products that are not
ground or chopped poultry products as
described in § 381.401 may be declared
on the basis of the product ‘‘as
consumed.’’ For single-ingredient, raw
products that are not ground or chopped
poultry products described in § 381.401,
if data are based on the product ‘‘as
consumed,’’ the data must be presented
in accordance with § 381.445(d). In
addition to the required declaration on
the basis of ‘‘as packaged’’ for products
other than single ingredient, raw
products that are not ground or chopped
poultry products as described in
§ 381.401, the declaration may also be
made on the basis of ‘‘as consumed,’’
provided that preparation and cooking
instructions are clearly stated.
*
*
*
*
*
§ 381.443
[Removed]
14. Section 381.443 is removed.
15. Section 381.445 is amended as
follows:
a. The section heading and paragraph
(a) and (c) are revised.
b. Paragraph (d) is amended by
removing ‘‘should’’ and adding, in its
place, ‘‘for products covered in
paragraphs (a)(1) and (a)(2) must’’.
PO 00000
Frm 00065
Fmt 4701
Sfmt 4702
67799
c. Paragraph (e) is amended by
removing ‘‘its published form, the
Agriculture Handbook No. 8 series’’ and
by adding, in its place, ‘‘its released
form, the USDA National Nutrient
Database for Standard Reference.’’
d. Paragraph (f) is amended by adding
‘‘provided’’ after ‘‘nutrition information
is’’.
The revisions read as follows:
§ 381.445 Nutrition labeling of singleingredient, raw poultry products that are
not ground or chopped products described
in § 381.401.
(a)(1) Nutrition information on the
major cuts of single-ingredient, raw
poultry products identified in § 381.444,
including those that have been
previously frozen, is required, either on
their label or at their point-of-purchase,
unless exempted under § 381.500. If
nutrition information is presented on
the label, it must be provided in
accordance with the provisions of
§ 381.409. If nutrition information is
presented at the point-of-purchase, it
must be provided in accordance with
the provisions of this section.
(2) Nutrition information on singleingredient, raw poultry products that
are not ground or chopped poultry
products described in § 381.401 and are
not major cuts of single-ingredient, raw
poultry products identified in § 381.444,
including those that have been
previously frozen, may be provided at
their point-of-purchase in accordance
with the provisions of this section or on
their label, in accordance with the
provisions of § 381.409.
(3) A retailer may provide nutrition
information at the point-of-purchase by
various methods, such as by posting a
sign or by making the information
readily available in brochures,
notebooks, or leaflet form in close
proximity to the food. The nutrition
labeling information may also be
supplemented by a video, live
demonstration, or other media. If a
nutrition claim is made on point-ofpurchase materials, all of the format and
content requirements of § 381.409
apply. However, if only nutrition
information—and not a nutrition
claim—is supplied on point-of-purchase
materials, the requirements of § 381.409
apply, provided, however:
(i) The listing of percent of Daily
Value for the nutrients (except vitamins
and minerals specified in
§ 381.409(c)(8)) and footnote required by
§ 381.409(d)(9) may be omitted; and
(ii) The point-of-purchase materials
are not subject to any of the format
requirements.
*
*
*
*
*
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(c) For the point-of-purchase
materials, the declaration of nutrition
information may be presented in a
simplified format as specified in
§ 381.409(f).
*
*
*
*
*
16. Section 381.462 is amended by
adding a new paragraph (f) to read as
follows:
§ 381.462 Nutrient content claims for fat,
fatty acids, and cholesterol content.
*
*
*
*
(f) A statement of the lean percentage
may be used on the label or in labeling
of ground or chopped poultry products
described in § 381.401 when the
product does not meet the criteria for
‘‘low fat,’’ defined in § 381.462(b)(2),
provided that a statement of the fat
percentage is contiguous to and in
lettering of the same color, size, type,
and on the same color background, as
the statement of the lean percentage.
17. Section 381.500 is amended by:
a. Revising paragraph (a)(1)
introductory text.
b. Paragraph (a)(1)(ii) is amended by
adding, ‘‘, including a single retail
store,’’ after the phrase ‘‘single-plant
facility,’’ and by adding ‘‘, including a
multi-retail store operation’’ after
‘‘company/firm’’.
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*
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c. Paragraph (a)(7)(i) is amended by
removing the semi-colon and ‘‘and’’ and
adding the following at the end of the
paragraph: ‘‘, provided, however, that
this exemption does not apply to readyto-eat ground or chopped poultry
products described in § 381.401 that are
packaged or portioned at a retail
establishment, unless the establishment
qualifies for an exemption under
(a)(1);’’.
d. Paragraph (a)(7)(ii) is amended by
removing the period and adding the
following at the end of the paragraph: ‘‘,
provided, however, that this exemption
does not apply to multi-ingredient
ground or chopped poultry products
described in § 381.401 that are
processed at a retail establishment,
unless the establishment qualifies for an
exemption under (a)(1); and’’
e. Add a new paragraph (a)(7)(iii).
f. Paragraph (d)(1) is amended by
removing the period at the end of the
sentence, and by adding the following to
the end of the sentence: ‘‘except that
this exemption does not apply to the
major cuts of single-ingredient, raw
poultry products identified in
§ 381.444.’’
The revision and addition reads as
follows:
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Fmt 4701
Sfmt 4702
§ 381.500
labeling.
Exemption from nutrition
(a) * * *
(1) Food products produced by small
businesses other than the major cuts of
single-ingredient, raw poultry products
identified in § 381.444 produced by
small businesses, provided that the
labels for these products bear no
nutrition claims or nutrition
information, and ground or chopped
products described in § 381.401
produced by small businesses that bear
a statement of the lean percentage and
fat percentage on the label or in labeling
in accordance with § 381.462(f),
provided that labels or labeling for these
products bear no other nutrition claims
or nutrition information,
*
*
*
*
*
(7) * * *
(iii) Products that are ground or
chopped at an individual customer’s
request.
*
*
*
*
*
Done in Washington, DC, on December 3,
2009.
Alfred V. Almanza,
Administrator.
[FR Doc. E9–29323 Filed 12–17–09; 8:45 am]
BILLING CODE 3410–DM–P
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Agencies
[Federal Register Volume 74, Number 242 (Friday, December 18, 2009)]
[Proposed Rules]
[Pages 67736-67800]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-29323]
[[Page 67735]]
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Part III
Department of Agriculture
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Food Safety and Inspection Service
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9 CFR Parts 317 and 381
Nutrition Labeling of Single-Ingredient Products and Ground or Chopped
Meat and Poultry Products; Proposed Rule
Federal Register / Vol. 74, No. 242 / Friday, December 18, 2009 /
Proposed Rules
[[Page 67736]]
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DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Parts 317 and 381
[FDMS Docket No. FSIS-2005-0018]
RIN: 0583-AC60
Nutrition Labeling of Single-Ingredient Products and Ground or
Chopped Meat and Poultry Products
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Supplemental Proposed Rule.
-----------------------------------------------------------------------
SUMMARY: The Food Safety and Inspection Service (FSIS) is issuing this
supplemental proposed rule that, if finalized, will amend the Federal
meat and poultry products inspection regulations to require nutrition
labeling of the major cuts of single-ingredient, raw meat and poultry
products, unless an exemption applies.
DATES: Submit comments on or before February 16, 2010.
ADDRESSES: FSIS invites interested persons to submit comments on this
proposed rule. Comments may be submitted by either of the following
methods:
Federal eRulemaking Portal: This Web site provides the
ability to type short comments directly into the comment field on this
Web page or attach a file for lengthier comments. Go to https://www.regulations.gov. Follow the online instructions at that site for
submitting comments.
Mail, including floppy disks or CD-ROMs, and hand- or
courier-delivered items: Send to Docket Clerk, U.S. Department of
Agriculture (USDA), FSIS, Room 2-2127, George Washington Carver Center,
5601 Sunnyside Avenue, Mailstop 5474, Beltsville, MD 20705-5474.
Instructions: All items submitted by mail or electronic mail must
include the Agency name and docket number FSIS-2005-0018. Comments
received in response to this docket will be made available for public
inspection and posted without change, including any personal
information, to https://www.regulations.gov.
Docket: For access to background documents or to comments received,
go to the FSIS Docket Room at the address listed above between 8:30
a.m. and 4:30 p.m., Monday through Friday. All comments submitted in
response to this proposal, as well as background information used by
FSIS in developing this document, will be available for public
inspection in the FSIS Docket Room at the address listed above between
8:30 a.m. and 4:30 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Sally Jones, Senior Technical Advisor,
Labeling and Program Delivery Division, Office of Policy and Program
Development, Food Safety and Inspection Service, U.S. Department of
Agriculture, Beltsville, MD 20705; (301) 504-0878.
Section I
SUPPLEMENTARY INFORMATION:
Background
Supplemental Proposed Rule: On January 18, 2001, FSIS published a
proposed rule in the Federal Register entitled, ``Nutrition Labeling of
Ground or Chopped Meat and Poultry Products and Single-Ingredient
Products'' (66 FR 4969). Because of the length of time since the
publication of the proposed rule, FSIS is providing the public an
opportunity to comment on this supplemental proposed rule. FSIS also
welcomes comments on relevant issues for which there is new evidence
since the proposed rule was issued.
This supplemental proposed rule responds to all comments received
on the January 18, 2001 proposed rule and explains how the Agency
intends to proceed with a final rule. Although FSIS has come to
tentative conclusions regarding the issues raised by the commenters, in
this supplemental proposed rule, FSIS is requesting additional comments
on policies for which there were significant differences of opinion
among commenters.
Specifically, under the ``Provisions of the Supplemental Proposed
Rule'' heading below, FSIS is requesting comments on whether nutrition
information should be allowed on point-of-purchase materials for ground
or chopped products, as an alternative to requiring nutrition
information on the product labels. FSIS is also requesting comments on
the use of statements of lean percentages on the label or in labeling
of ground or chopped products that do not meet the regulatory criteria
for ``low fat.'' In addition, under the ``Provisions of the
Supplemental Proposed Rule'' heading below, FSIS is requesting comments
on whether it should provide an exemption from nutrition labeling
requirements for small businesses that include a fat percentage
statement and lean percentage statement on the labeling or in labeling
of ground or chopped product. FSIS is requesting copies of any studies,
surveys, or other data on consumers' perception of and use of point-of-
purchase materials versus nutrition labels for ground or chopped
product and on consumers' understanding of the nutrient content of
ground or chopped products. FSIS is also requesting copies of any
studies, surveys, or data on consumers' use and understanding of fat
percentage and lean percentage statements on ground or chopped
products. FSIS will post on its Web site, with this supplemental
proposed rule, all studies and data submitted to the Agency in response
to this request. FSIS requests comment on the potential effects of
disallowing a statement of lean percentage on ground or chopped
products.
FSIS will consider all comments received in response to this
supplemental proposed rule. After evaluating the comments, FSIS intends
to respond to them, make any appropriate and necessary changes to this
rule, and issue the final rule in the Federal Register.
The Proposed Rule
Major cuts: FSIS proposed to require nutrition labeling of the
major cuts of single-ingredient, raw meat and poultry products
identified in Sec. Sec. 317.344 and 381.444 that are not ground or
chopped, except for certain exemptions. FSIS proposed that ``ground
beef regular without added seasonings,'' ``ground beef about 17% fat,''
and ``ground pork'' would no longer be included in the list of major
cuts in Sec. 317.344.
FSIS proposed to make the guidelines in place for the voluntary
nutrition labeling program mandatory for the major cuts of single-
ingredient, raw products that are not ground or chopped. Thus, for
these products, FSIS proposed that nutrition information be provided on
the label or at point-of-purchase, unless an exemption would apply. For
further explanation of the guidelines for voluntary nutrition labeling,
see 66 FR 4971, January 18, 2001. For further explanation of the
proposal to make these guidelines mandatory for the major cuts of
single-ingredient, raw products that are not ground or chopped, see 66
FR 4973-4975, January 18, 2001.
In the preamble to the proposed rule, FSIS explained that, in its
two most recent surveys of the voluntary nutrition labeling of single-
ingredient, raw products, FSIS found that significant participation in
the voluntary nutrition labeling program did not exist (66 FR 4972,
January 18, 2001). FSIS regulations provide that a food retailer is
participating at a significant level (1) if the retailer provides
nutrition labeling information for at least 90 percent of the major
cuts of single-ingredient, raw meat and poultry products it sells; and
[[Page 67737]]
(2) if the nutrition label on these products is consistent in content
and format with the mandatory program, or if nutrition information is
displayed at point-of-purchase in an appropriate manner. The required
nutrition labeling provisions for multi-ingredient and heat processed
products are referred to as ``the mandatory program.'' The regulations
also provide that significant participation by food retailers exists if
at least 60 percent of all companies that are evaluated are
participating in accordance with the guidelines (Sec. 317.343 and
Sec. 381.443). The term ``companies,'' as used in these regulations,
refers to individual stores. FSIS used a representative sample of
stores to assess participation (see 58 FR 640, January 6, 1993). Based
on the survey data from the two most recent surveys, less than 60
percent of stores evaluated were participating in accordance with the
guidelines.
In the preamble to the proposed rule, FSIS explained that, because
the most recent surveys showed that significant participation in the
voluntary nutrition labeling program did not exist, FSIS believed that
the proposed rule was necessary. FSIS stated that, without nutrition
information, consumers are not able to assess the nutrient content of
the major cuts and thus cannot make educated choices about these
products based on nutrition information. FSIS believed that the lack of
nutrition information on the labeling of the major cuts was misleading
(66 FR 4973-4974, January 18, 2001) because it fails to disclose
material facts about the consequences of consumption of these products.
Consumers can compare the fat content in major cuts of poultry based on
whether the product has skin and based on the levels of attached fat in
the product. Similarly, consumers can compare the fat content among
major cuts of meat products based on internal marbling and attached
fat. However, without nutrition labeling for the major cuts, consumers
cannot assess precise levels of fat (e.g., 10 grams vs. 20 grams of fat
per serving) and cannot know the levels of specific nutrients, such as
saturated fat, in these products. Therefore, without nutrition labeling
of these products, consumers cannot make educated choices about
consuming the major cuts.
The FMIA and PPIA provide that product is misbranded if its
labeling is false or misleading in any particular (21 U.S.C. 601(n)(1)
and 453(h)(1)). Without nutrition information for the major cuts of
single-ingredient, raw products, FSIS tentatively concluded that these
products would be misbranded under section 1(n) of the FMIA or section
4(h) of the PPIA because the label would fail to reveal significant
material facts about the consequences of consuming these products(66 FR
4974, January 18, 2001).
As explained in the preamble to the proposed rule, although FSIS
believed that nutrition information on the labels of individual
packages of single-ingredient, raw products is useful, the Agency
proposed that nutrition information for the major cuts could also be
provided on point-of-purchase materials, because consumers have
reasonable expectations as to the nutrient content of these products.
Also, FSIS stated that the nutrient content of a given major cut is
relatively uniform across the market, and these products are not
formulated in the manner of ground or chopped products (66 FR 4974,
January 18, 2001).
Ground or Chopped Products: Ground or chopped products that are
multi-ingredient or heat processed products are subject to the
requirements of the mandatory nutrition labeling program; therefore,
these products are already required to bear nutrition labels, unless
they qualify for an exemption. FSIS proposed to extend mandatory
nutrition labeling requirements to all ground or chopped products,
including single-ingredient, raw ground or chopped products, unless an
exemption applies. Thus, FSIS proposed to require that nutrition labels
be provided for all ground or chopped products (livestock species) and
hamburger, with or without added seasonings, unless an exemption
applies. Similarly, FSIS proposed to require that nutrition labels be
provided for all ground or chopped poultry (kind), with or without
added seasonings, unless an exemption applies. Under the proposed rule,
products that would be required to bear nutrition labels include
single-ingredient, raw hamburger, ground beef, ground beef patties,
ground chicken, ground turkey, ground chicken patties, ground pork, and
ground lamb.
In the proposed rule, FSIS explained that, unlike other single-
ingredient, raw products, producers are able to formulate precisely the
fat content of ground or chopped products. Therefore, in this respect,
these products are similar to products in the existing mandatory
program that are required to bear nutrition labels (66 FR 4975, January
18, 2001). FSIS noted that other single-ingredient, raw products cannot
be formulated in the same manner or to the same degree as ground beef
products (66 FR 4976, January 18, 2001).
FSIS noted that it believed that consumers could not easily see the
fat in ground or chopped beef. In ground or chopped beef products, the
fat is uniformly distributed throughout the product, and is not clearly
distinguishable on the surface of the product (66 FR 4975, January 18,
2001). FSIS also explained that the Agency believed that consumers
cannot estimate the level of fat in ground or chopped beef and cannot
compare the levels of fat in these products to those in other products
(66 FR 4975, January 18, 2001). Similarly, FSIS explained that ground
lamb and ground pork may contain varying amounts of fat and varying
nutrient content, which consumers cannot visually detect (66 FR 4976,
January 18, 2001). Additionally, FSIS noted that producers sometimes
use meat from advanced meat recovery (AMR) systems and low temperature
rendering in ground or chopped beef or pork products, which can affect
their nutrient content (66 FR 4975 and 4976, January 18, 2001).
Finally, FSIS noted that, as with the fat on ground meat products,
consumers cannot readily detect the fat content of ground poultry
products (66 FR 4976, January 18, 2001). For these reasons, FSIS
tentatively concluded that ground or chopped meat and poultry products
that did not bear nutrition information would be misbranded under
section 1(n)(1) of the FMIA and section 4(h)(1) of the PPIA (66 FR
4977, January 18, 2001).
FSIS proposed to require that nutrition information for ground or
chopped products appear on the label of these products (unless an
exemption applies), as is required for multi-ingredient and heat
processed products, rather than on point-of-purchase materials because
ground or chopped products are similar to multi-ingredient and heat
processed products in that certain parameters, such as their fat
content, can be controlled precisely to obtain the desired product. In
addition, because there are numerous formulations of ground or chopped
products, it would be difficult for producers or retailers to develop
point-of-purchase materials that would address all the different
formulations that exist for these products. Furthermore, it would be
difficult for consumers to find the correct information for a specific
ground or chopped product on point-of-purchase materials that include
information concerning numerous formulations of these products (66 FR
4977, January 18, 2001).
Exemptions: FSIS proposed that certain exemptions from nutrition
labeling requirements would apply to the major cuts of single-
ingredient, raw meat and poultry products and ground or chopped meat
and poultry products. FSIS proposed the following
[[Page 67738]]
exemptions from nutrition labeling requirements for ground or chopped
products: ground or chopped products that qualify for the small
business exemption in Sec. Sec. 317.400(a)(1) and 381.500(a)(1);
ground or chopped products in packages that have a total surface area
available to bear labeling of less than 12 square inches, provided that
the product's labeling includes no nutrition claims or nutrition
information and provided that an address or telephone number that a
consumer can use to obtain the required information is included on the
label; ground or chopped products that are intended for further
processing; ground or chopped products that are not for sale to
consumers; ground or chopped products that are in small packages that
are individually wrapped packages of less than \1/2\ ounce net weight;
ground or chopped products that are custom slaughtered or prepared; and
ground or chopped products that are intended for export.
FSIS proposed the following exemptions for major cuts of single-
ingredient, raw products that are not ground or chopped: major cuts
intended for further processing; major cuts not for sale to consumers;
major cuts in small packages that are individually wrapped packages of
less than \1/2\ ounce net weight; major cuts that are custom
slaughtered or prepared; and major cuts that are intended for export.
FSIS proposed to exempt ground or chopped products that qualified
for the small business exemption from nutrition labeling requirements
for the main reason stated in the January 6, 1993, final rule: because
these requirements would create undue economic hardship for small
businesses (58 FR 638). FSIS stated in the proposed rule that it did
not believe that the reasons that necessitated the establishment of the
small business exemption, as explained in the January 6, 1993 final
rule, are applicable to the major cuts of single-ingredient, raw meat
and poultry products produced by small businesses. For these products,
FSIS proposed that nutrition information may be provided on labels or,
alternatively, at their point-of-purchase. In addition, FSIS explained
that it intended to make point-of-purchase materials available over the
Internet free of charge. Therefore, the nutrition labeling requirement
for major cuts of single-ingredient, raw products should not impose an
economic hardship for ``small businesses'', including those that are
retail stores (66 FR 4978, January 18, 2001).
In the preamble to the January 6, 1993, final rule, FSIS explained
that it was proposing an exemption from nutrition labeling requirements
for products intended for further processing and products not for sale
to consumers because consumers do not see the nutrition information on
products used for further processing or products that are not for sale
to consumers. The Agency also explained that it would exempt
individually wrapped packages of less than \1/2\ ounce net weight,
provided no nutrition claim or nutrition information was made on the
label, because these products are an insignificant part of the diet.
With regard to the custom exemption, the Agency explained that an
exemption should apply because these custom services are performed
solely for individuals. Finally, the Agency explained that products
intended for export should be exempt because these products are labeled
according to the requirements of the country where the product is to be
exported (58 FR 639, January 6, 1993). In the January 18, 2001,
proposed rule, the Agency proposed these exemptions because the Agency
had tentatively determined that the bases for these exemptions, as
explained in the January 6, 1993, final rule, are valid as applied to
nutrition labeling for ground or chopped products and for major cuts of
single-ingredient, raw products. Therefore, FSIS proposed that any
ground or chopped product or major cut of single-ingredient, raw
product that qualifies for any of these exemptions will continue to be
exempt (66 FR 4979, January 18, 2001).
Under current regulations, products in packages that have a total
surface area available to bear labeling of less than 12 square inches
are exempt from nutrition labeling, provided the product's labeling
includes no nutrition claims or nutrition information and provided that
an address or telephone number that a consumer can use to obtain the
required information is included on the label. FSIS allowed for
nutrition information to be provided by alternative means for products
of this size in order to incorporate sufficient flexibility in the
regulations (58 FR 47625, January 6, 1993). As explained in the
proposed rule, for ground or chopped products, FSIS believes it is
necessary to provide this flexibility for products in packages that
have a total surface area available to bear labeling of less than 12
square inches, provided that the labels for these products bear no
nutrition claims or nutrition information. However, because nutrition
information for the major cuts of single-ingredient, raw meat and
poultry products may be provided on point-of-purchase materials, FSIS
proposed that the provisions for providing nutrition labeling by
alternate means for products in packages that have a total surface area
available to bear labeling of less than 12 square inches would not
apply to the major cuts of single-ingredient, raw meat and poultry
products (66 FR 4979, January 18, 2001).
In the preamble to the proposed rule, FSIS explained that
restaurant menus that include ground or chopped products generally do
not constitute nutrition labeling or fall within the scope of the
proposed regulations. Similarly, although a restaurant menu would most
likely not include a major cut of single-ingredient, raw product, if it
did, the menu would not fall within the scope of the proposed
regulations. Finally, the preamble explained that, under the proposed
rule, any ground or chopped product or major cut of single-ingredient,
raw product represented or purported to be specifically for infants and
children less than 4 years of age would not be allowed to include
certain nutrient content declarations, because infants and children
less than 4 years of age have different nutrition needs than adults and
children older than 4 years of age (66 FR 4979, January 18, 2001).
In the 1993 final rule on nutrition labeling, FSIS exempted from
mandatory nutrition labeling requirements multi-ingredient products
processed at retail, and ready-to-eat products packaged or portioned at
retail. The reasons that FSIS provided these exemptions in the 1993
final rule were that FSIS believed that it would be impractical to
enforce nutrition labeling requirements on these products prepared or
served at retail and because the Agency concluded, based on a review of
National Food Consumption Survey (NFCS) data, that the average person's
diet consisted of an insignificant proportion of ready-to-eat retail
packaged products or retail processed products (58 FR 639, January 6,
1993).
The proposed rule did not provide an exemption for ready-to-eat
ground or chopped products packaged or portioned at retail, or multi-
ingredient ground or chopped products that are processed at retail
because, as FSIS explained in the 2001 nutrition labeling proposed
rule, there may be a significant amount of multi-ingredient ground beef
retail processed products or ready-to-eat retail packaged products.
Also, FSIS explained that the Agency no longer believes enforcement of
nutrition labeling requirements at retail stores to be impractical
because FSIS is already conducting testing for Escherichia coli
[[Page 67739]]
(E. coli) O157:H7 at retail (66 FR 4979, January 18, 2001).
For further explanation of the reasons for the proposed exemptions,
see 66 FR 4978-4980, January 18, 2001.
Nonmajor Cuts of Single-Ingredient, Raw Meat and Poultry Products
That Are Not Ground or Chopped: FSIS did not propose to require
nutrition information for single-ingredient, raw meat and poultry
products that are not major cuts and that are not ground or chopped.
However, FSIS proposed that if nutrition information is provided for
these products, it must be provided according to the existing
guidelines for the current voluntary nutrition labeling program.
Therefore, under the proposed rule, if nutrition information were
provided for these products, it would be consistent with the nutrition
information required for the major cuts of single-ingredient, raw
products. In the preamble to the proposed rule, FSIS explained that the
Agency could not determine whether it would be beneficial to require
nutrition labeling for nonmajor cuts that are not ground or chopped
until it assessed whether adequate nutrition information is being
provided for these products (66 FR 4974, January 18, 2001).
Enforcement and Compliance: FSIS conducts sampling and nutrient
analysis of products that fall under the mandatory nutrition labeling
program. FSIS proposed that the procedures set forth for FSIS product
sampling and nutrient analysis in Sec. Sec. 317.309(h)(1) through
(h)(8) and 381.409(h)(1) through (h)(8) would be applicable to ground
or chopped meat and to ground or chopped poultry products,
respectively. FSIS explained that under the proposal, FSIS would sample
and conduct nutrient analysis of ground or chopped products to verify
compliance with nutrition labeling requirements, even if nutrition
labeling on these products is based on the most current representative
data base values contained in USDA's National Nutrient Data Bank or the
USDA National Nutrient Database for Standard Reference and there are no
claims on the labeling. Therefore, FSIS would treat these products as
it treats other products required to bear nutrition labels (66 FR 4980,
January 18, 2001).
FSIS explained that it would treat ground or chopped products in
this way because the fat content of these products can vary
significantly. In addition, the preamble to the proposed rule stated
that FSIS employees cannot visually assess whether nutrition
information on the label of ground or chopped products accurately
reflects the labeled products' contents because, in most cases, it is
not possible to visually assess the level of fat in a ground or chopped
product (66 FR 4980, January 18, 2001).
FSIS also proposed that if nutrition labeling of the major cuts of
single-ingredient, raw products (other than ground beef or ground pork)
is based on USDA's National Nutrient Data Bank or the USDA's National
Nutrient Database for Standard Reference, and there are no nutrition
claims on the labeling, FSIS would not sample and conduct a nutrient
analysis of the products. The preamble explained that, for the major
cuts, FSIS personnel can visually identify the particular cut. FSIS
further explained that, if the nutrition information for these products
is based on USDA's National Nutrient Data Bank or the USDA National
Nutrient Database for Standard Reference, and there are no nutrition
claims on the labeling, it is not necessary for FSIS to verify the
accuracy of the data because they are USDA data. USDA has already
evaluated these USDA data and determined that they are valid (66 FR
4980, January 18, 2001).
Permitting Percent Lean Statements on labels or in labeling of
ground or chopped products: FSIS also proposed to permit a statement of
lean percentage on the label or in labeling of ground or chopped meat
and poultry products that do not meet the regulatory criteria for ``low
fat,'' provided that a statement of the fat percentage is also
displayed on the label or in labeling. FSIS proposed that the required
statement of fat percentage be contiguous to, in lettering of the same
color, size, and type as, and on the same color background as, the
statement of lean percentage. FSIS stated that many consumers have
become accustomed to this labeling on ground beef products, and that
FSIS believed this labeling provided a quick, simple, and accurate
means of comparing all ground or chopped meat and poultry products (66
FR 4981, January 18, 2001).
Provisions of the Supplemental Proposed Rule
Major cuts and nonmajor cuts that are not ground or chopped:
Consistent with the proposal, should this rule become final, FSIS will
require nutrition information for the major cuts, either on their label
or at their point-of-purchase. The provisions of the voluntary
nutrition labeling program will be mandatory for the major cuts. As
FSIS proposed, ``ground beef regular without added seasonings,''
``ground beef about 17% fat,'' and ``ground pork'' will no longer be
included in the list of major cuts in Sec. 317.344 because FSIS has
decided to treat ground meat and poultry products differently than
single cuts of meat for the purposes of this regulation. Should this
rule become final, ground meat and poultry products will be required to
bear nutrition labeling on their packages, unless an exemption applies.
Nutrition information at the point-of-purchase for ground or chopped
products will not meet the requirements of these regulations.
FSIS believes that without nutrition information, consumers are not
able to assess the nutrient content of the major cuts and, thus, cannot
make educated decisions about these products based on nutrition
information. FSIS has concluded that the lack of nutrition information
for the major cuts of single-ingredient, raw products, either on their
label or at their point-of-purchase, makes these products misbranded
under 21 U.S.C. 601(n)(1) and 453(h)(1). Although FSIS believes that
nutrition information on the labels of individual packages of the major
cuts of single-ingredient, raw products is useful, this final rule
provides that nutrition information for these products may be provided
at their point-of-purchase.
In the 1991 proposed rule and the 1993 final rule on nutrition
labeling, FSIS stated that if it determined, during any evaluation of
its voluntary guidelines, that significant participation did not exist,
it would initiate proposed rulemaking to determine whether it would be
beneficial to require nutrition labeling on single-ingredient, raw meat
and poultry products (56 FR 60306, November 27, 1991; 58 FR 640,
January 5, 1993). Therefore, FSIS initiated rulemaking to propose
requiring nutrition labeling for the major cuts of single-ingredient,
raw products. Through this rulemaking, FSIS has determined that because
nutrition information has not been universally available for the major
cuts of single-ingredient products, consumers have not been able to
assess the nutrient content of these products and, thus, cannot make
educated choices about them, and about the significant portion of their
diet that these products represent, based on nutrition information.
Without nutrition information, the labeling of major cuts of single-
ingredient, raw meat and poultry products fails to include material
facts about the consequences of consuming these products. FSIS has
concluded that the lack of nutrition information for the major cuts of
single-ingredient, raw products, either on their label or at their
point-of-purchase, makes these products misbranded under 21 U.S.C.
601(n)(1) and 453(h)(1). FSIS has determined that this rule is
necessary to ensure that consumers obtain nutrition information
concerning
[[Page 67740]]
these products. Through the supplemental proposed regulatory impact
analysis (PRIA), FSIS has determined that this rule would result in
benefits to consumers and net benefits to society.
Consistent with the proposed rule, this supplemental proposed rule
will not require nutrition information for nonmajor cuts of single-
ingredient, raw meat and poultry products that are not ground or
chopped.
FSIS has determined that it is not appropriate or necessary to
require nutrition information for nonmajor cuts that are not ground or
chopped at this time. They do not contribute in a major way to the
diet. Thus, at this time, the consequences of consuming these products
cannot be considered to be a material fact. In the future, FSIS will
reassess the production and consumption volume of nonmajor cuts that
are not ground or chopped and will determine the levels of consumption
of these products and whether sufficient nutrition information is being
made available about them. After FSIS assesses the volume of these
products and assesses the adequacy of nutrition information provided
for them, FSIS will determine whether it is necessary to propose
nutrition labeling requirements for these products, and whether
nutrition labeling requirements for these products would be beneficial.
Should this rule become effective, if establishments or retail
facilities voluntarily provide nutrition information for nonmajor cuts
of meat and poultry products that are not ground or chopped, they will
have to provide it according to the nutrition labeling requirements for
the major cuts. Should establishments or retail facilities choose to
provide nutrition information for these products, they will have to
either provide it at the point-of-purchase, in accordance with Sec.
317.345 or Sec. 381.445, or on their label, in accordance with Sec.
317.309 or Sec. 381.409. Thus, the nutrition labeling provisions for
these products will be consistent with those for the voluntary
nutrition labeling program.
As proposed, the supplemental proposed rule would allow nutrition
information for the major cuts and nonmajor cuts of single-ingredient,
raw products that are not ground or chopped to be declared on either an
``as packaged'' basis or an ``as consumed'' basis because most of these
products will not need FSIS compliance scrutiny. If FSIS conducts
nutrient analysis of products under 317.309(h) or 381.409(h), it does
so on the packaged product. If nutrition information for these products
is based on USDA's National Nutrient Database for Standard Reference,
and there are no claims on the labeling, FSIS will not conduct a
nutrient analysis of these raw products and, therefore, will not
evaluate ``as packaged'' nutrition labeling information for these
products.
Also consistent with the proposed rule, under this supplemental
proposed rule, the declaration of the number of servings per container
would not need to be included on the nutrition label for the major or
nonmajor cuts of single-ingredient, raw products that are not ground or
chopped, because these products are typically random weight products.
Existing regulations do not require the number of servings on the
nutrition label of random weight products (see Sec. Sec.
317.309(b)(10)(iii) and 381.409(b)(10)(iii)).
Ground or Chopped Products: Consistent with the proposed rule, this
supplemental proposed rule would extend the mandatory nutrition
labeling requirements to all ground or chopped products, including
single-ingredient, raw ground or chopped products, unless an exemption
applies. Should this rule become effective, FSIS will require that
nutrition labels be provided for all ground or chopped products
(livestock species) and hamburger, with or without added seasonings,
unless an exemption applies. This rule would also require that
nutrition labels be provided for all ground or chopped poultry
products, with or without added seasonings, unless an exemption
applies. After analyzing the comments and for the reasons discussed in
the proposed rule and discussed below in the response to comments
section, FSIS has concluded that ground or chopped meat and poultry
products that do not bear nutrition information on their label are
misbranded under 21 U.S.C. 601(n)(1) and 453(h)(1).
FSIS recognizes that single-ingredient, raw ground or chopped
products have not been required to bear nutrition labels. In the
proposed rule, FSIS explained that, on June 3, 1997, the Center for
Science in the Public Interest (CSPI) submitted a petition to the
Agency stating that FSIS should require complete ``Nutrition Facts'' on
ground beef labels that make nutrient content claims. This petition
brought many of the issues concerning the need for nutrition labeling
of ground or chopped products to FSIS's attention. Consistent with
CSPI's petition, FSIS has determined that nutrition information should
be required on packages of all ground or chopped meat and poultry
products, unless an exemption applies. (For more information on the
petition from CSPI, see 66 FR 4975, January 18, 2001).
Most industry commenters did not support requiring on-package
nutrition information for ground or chopped products. Some of these
commenters supported requiring nutrition labeling for these products at
their point-of-purchase. Individuals, consumer organizations, and
nutrition organizations supported mandatory nutrition labeling on the
packages of ground or chopped products.
FSIS requests comments on how retailers or official establishments
would prepare point-of-purchase materials that would address all
possible combinations of percent fat and percent lean in ground or
chopped products. FSIS also requests comments on how point-of-purchase
materials would convey the nutrient values of ground or chopped
products that contain AMR product or product from low temperature
rendering (e.g., finely textured beef or lean finely textured beef). In
addition, FSIS requests comments on how consumers would identify which
nutrient values on point-of-purchase materials correspond to specific
ground or chopped products available in the store, if a statement of
fat percentage or lean percentage is not required on the product. Such
statements would not be required under this supplemental proposed rule.
Finally, FSIS requests surveys, studies, or other data on consumers'
perception and use of point-of-purchase materials versus nutrition
labels for ground or chopped products and on consumers' understanding
of the nutrient content of such products.
Exemptions: This supplemental proposal would provide all the
exemptions that it proposed for the major cuts of single-ingredient,
raw meat and poultry products and for ground or chopped products for
the reasons set forth in the proposal. Consistent with the proposed
rule, it does not provide an exemption for ready-to-eat ground or
chopped products packaged or portioned at retail or multi-ingredient
ground or chopped products that are processed at retail. As FSIS
explained in the 2001 nutrition labeling proposed rule, there may be a
significant amount of multi-ingredient ground beef retail processed
products or ready-to-eat retail packaged products. Also, as was stated
in the proposed rule, FSIS no longer believes enforcement of nutrition
labeling requirements at retail stores to be impractical because FSIS
is already conducting testing for E. coli O157:H7 at retail.
In response to comments, the supplemental proposal provides an
[[Page 67741]]
exemption from nutrition labeling requirements for products that are
ground or chopped at an individual customer's request and that are
prepared and served or sold at retail, provided that the labels or
labeling of these products bear no nutrition claims or nutrition
information.
Enforcement and Compliance: Consistent with the proposed rule and
the reasons discussed in it, under this supplemental proposed rule,
FSIS would sample and conduct nutrient analysis of ground or chopped
products to verify compliance with nutrition labeling requirements,
even if nutrition labeling on these products is based on the most
current representative database values contained in USDA's National
Nutrient Data Bank or the USDA National Nutrient Database for Standard
Reference and there are no claims on the labeling. Also consistent with
the proposed rule, for the major cuts that are not ground or chopped,
if nutrition labeling of these products is based on USDA's National
Nutrient Data Bank or the USDA's National Nutrient Database for
Standard Reference, and there are no nutrition claims on the labeling,
FSIS would not sample and conduct a nutrient analysis of these
products.
Permitting Percent Lean Statements on labels or in labeling of
ground or chopped products: Consistent with the proposed rule, the
supplemental proposed rule would permit a statement of lean percentage
on the label or in labeling of ground or chopped meat and poultry
products that do not meet the regulatory criteria for ``low fat,'' as
long as a statement of fat percentage is contiguous to, in lettering of
the same color, size, and type as, and on the same color background as,
the statement of lean percentage. Because the percent fat statement
must be contiguous to the percent lean statement and must be in
lettering of the same color, size, and type as, and on the same color
background as, the lean percentage statement, FSIS believes that the
percent lean statements will not mislead consumers.
Under the proposed rule, if small businesses produced ground or
chopped product and included a statement of lean percentage and fat
percentage on the product's label or in labeling, the business would
have been required to include nutrition information on the product
label. Based on the National Cattleman's Beef Association (NCBA)
National Meat Case Study in 2004, 93 percent of ground beef packages
had statements of lean or fat percentages. Sixty-eight percent of
packages with such statements had nutrition facts panels and 25 percent
did not. Because 25 percent of ground beef packages in the NCBA study
had statements of lean or fat percentages but did not have nutrition
facts panels, FSIS found it reasonable to conclude that many small
businesses may include a statement of the lean percentage on the label
of ground products but may not include nutrition facts panels on the
product label. On this basis, FSIS concluded that requiring small
businesses that use the lean percentage statement on the label of
ground products to also include nutrition information on the label of
such products may result in significant expenses for small businesses.
Therefore, in this supplemental proposed rule, small businesses that
use statements of percent fat and percent lean on the label or in
labeling of ground products would be exempt from nutrition labeling
requirements, provided they include no other nutrition claims or
nutrition information on the product labels or labeling.
The majority of industry associations supported the use of a
statement of lean percentage on the label or in labeling of ground
products that do not meet the regulatory criteria for ``low fat.''
Because of the longstanding use of the statements of percent fat and
percent lean on the label or in labeling of ground beef and hamburger
products, FSIS has concluded that such statements on the label or in
labeling of ground products produced by small businesses will not
mislead consumers, even if the small businesses do not include
nutrition information on the products' labels.
However, individuals and consumer and nutrition organizations
generally did not support the use of statements of lean percentages on
the label or in labeling of ground or chopped products that do not meet
the regulatory criteria for ``low fat.'' Therefore, FSIS requests
comments on whether such statements should be prohibited on the label
or in labeling of ground or chopped products that do not meet the
regulatory criteria for ``low fat.'' FSIS requests comments on whether
lean percentage statements are inherently misleading to consumers on
the label or in labeling of ground or chopped product that does not
meet the regulatory criteria for ``low fat'' when contiguous to fat
percentage statements, as the rule would require. FSIS also requests
comments on whether lean percentage statements are redundant on the
label or in labeling of such products when contiguous to fat percentage
statements. If commenters believe the regulations should prohibit lean
percentage statements on the label or in labeling of ground or chopped
products that do not meet the ``low fat'' criteria, FSIS requests
comments on whether a fat percentage statement on the label or in
labeling of such products would be useful. If commenters believe such a
statement would be useful, do they believe it should be required on the
label or in labeling for these products?
FSIS also requests comments on whether the final rule should allow
a lean percentage statement and fat percentage statement on the label
or in labeling of ground or chopped products produced by small
businesses if such product does not include nutrition information on
the product label. If commenters believe that nutrition information
should be required on labels of any ground or chopped product for which
a lean percentage and fat percentage statement is provided on the label
or in labeling, FSIS requests comment on the costs of this requirement
for small businesses.
FSIS requests copies of surveys, studies, or other data on
consumers' use and understanding of lean percentage and fat percentage
statements on ground or chopped products.
Effective Date
Should this rule become final, FSIS intends that the requirements
for ground or chopped products would become effective on January 1,
2012. FSIS issued final regulations to establish this date as the
uniform compliance date for new food labeling regulations that are
issued between January 1, 2009, and December 31, 2010 (73 FR 75564;
December 12, 2008). As is discussed in the response to comments below,
FSIS issued the uniform compliance regulations to minimize costs
associated with on-package labels. Because this supplemental proposed
rule would allow for the presentation of nutrition information for the
major cuts of single-ingredient, raw meat and poultry products at their
point-of-purchase, FSIS intends to make the labeling requirements for
the major cuts effective one year from the date of publication of the
final rule. FSIS requests comments on these two planned effective
dates.
Availability of Nutrition Information
FSIS intends to make available nutrition labeling materials that
can be used at the point-of-purchase of the major cuts at the following
Internet address: https://www.fsis.usda.gov. Also, the Food Marketing
Institute (FMI) has made available materials that can be used at the
point-of-purchase of the major cuts at the following Internet address:
https://www.fmi.org/consumer/nutrifacts/.
[[Page 67742]]
The USDA National Nutrient Database for Standard Reference is
developed and maintained by the Agricultural Research Service (ARS) and
can be found on the Internet at the following address: https://www.ars.usda.gov\nutrientdata. Information is available at this site
for ground beef products containing 5%, 10%, 15%, 20%, 25%, and 30%
fat. In addition, ARS has included a calculator on the Internet, with
the Database. Parties can enter the amount of fat (5% to 30% percent
fat) or lean (70% to 95% lean) in a particular raw ground beef product,
and the calculator will calculate the nutrient values for the product
based on the fat value entered.
The USDA National Nutrient Database for Standard Reference also
includes a set of tables with nutrient values for ground pork with fat
levels from 4 to 28%, in one percent increments. ARS did not develop a
calculator because, at this time, labeling for ground pork at retail
does not include statements of percentage fat or percentage lean. The
USDA Nutrient Database also includes nutrient values for raw and cooked
ground chicken but does not include nutrient values for such product at
varying fat levels. Ground chicken is not typically produced over a
wide range of fat levels. ARS also has nutrient data for three types of
commonly marketed ground turkey products. Nutrient values for these
products are not yet in the database. However, ARS expects that the
nutrient values for these ground turkey products will be available in
the database by August 2010. Most ground poultry products are produced
and labeled at Federal establishments rather than at retail.
FSIS requests comments on whether provision of nutritional tables
will be sufficient for retailers and establishments to provide
nutrition labels for ground pork. FSIS also requests comments on
whether the available data for ground chicken and ground turkey in the
USDA Nutrient Database will be sufficient for retailers and
establishments.
Below are examples of nutrition labels for ground or chopped
products that would meet the requirements of the supplemental proposed
rule. Should this rule become final, FSIS will make additional examples
of acceptable nutrition labels for ground or chopped products available
on the Agency's Web site.
BILLING CODE 3410-DM-P
[[Page 67743]]
[GRAPHIC] [TIFF OMITTED] TP18DE09.421
[[Page 67744]]
[GRAPHIC] [TIFF OMITTED] TP18DE09.422
BILLING CODE 3410-DM-C
Summary of and Response to Comments
FSIS received approximately 5,000 comments on the proposed rule
from individuals, consumer advocacy organizations, academia, trade and
professional associations, health and nutrition organizations, two
county health departments, meat and poultry producers, and food
retailers. The majority of the comments (approximately 3,500) were
generated from a letter writing campaign initiated by a consumer
organization. In addition, there were approximately 450 form letters
that expressed consumers' concerns and did not identify an affiliation
with any organization, approximately 60 form letters from a consumer
co-op organization, and two sets of form letters from relatively small
retail chains (approximately 10 letters in each set).
A summary of issues raised by commenters and the Agency responses
follows.
Nutrition Labeling for the Major Cuts of Single-Ingredient, Raw Meat
and Poultry Products
Comment: The majority of letters from individuals, consumer groups,
and health organizations stated that FSIS should require on-package
nutrition labeling for all single-ingredient, raw meat and poultry
products (major and nonmajor cuts). They stated that point-of-purchase
materials fail to convey effectively the nutrition information for
specific fresh meat or poultry products because the materials are
difficult to find and difficult to read. Some of these commenters also
stated that nutrition labels are particularly important for meat and
poultry products because they are a major source of fat, saturated
fatty acids, and calories.
A health organization stated that because the same cut of meat can
be labeled by different names, consumers would be better served by
nutrition information on the labels of the products. Several commenters
stated that an advantage of including nutrition information on the
label is that consumers could review the nutrient content once the
product is taken home, and others, besides the primary food purchaser,
would have better access to the nutrition information. A nutrition
association stated that if FSIS permits point-of-purchase information
for fresh meat and poultry packages, the Agency should require on-
package messages directing consumers to point-of-purchase labeling at
another location in the store.
One consumer association noted that a recent telephone survey
showed an overwhelming percentage (78%) of the respondents said that it
was ``more useful'' to provide nutrition information about raw meat and
poultry products on package labels than on posters or brochures.
Comments from a coalition of health and consumer organizations
suggested that the nutrient content for ground products often has less
variance than the nutrient content of specific cuts. Thus, the
coalition believes that it is more important to provide nutrition
information on the labeling of major cuts than on ground products. The
coalition also stated that the reasons provided by the Agency for
mandating nutrition labeling on the packaging of ground products would
be the reasons for mandating nutrition labeling on
[[Page 67745]]
packaging of the major cuts of meat or poultry (see 66 FR 4977). This
coalition also stated that there are more major cuts than there are
ground products, and it would be difficult for producers or retailers
to develop point-of-purchase materials to address the different
formulations and trim levels of the major cuts; and it would be
difficult for consumers to locate the appropriate information for a
particular cut on the point-of-purchase materials.
One health group stated that although on-package labeling may be a
more effective approach for conveying nutrition information than point-
of-purchase materials, the organization has historically supported the
use of point-of-purchase materials as an acceptable means of nutrition
labeling. This commenter also stated that for single-ingredient, raw
products, other than ground or chopped products, the use of
standardized averages is likely to be the most effective way to provide
nutrition information, either on the package or at point-of-purchase.
An individual also stated that for many major cuts, having the
nutrition label next to the product would be sufficient.
A consumer organization did not believe that consumers have
reasonable expectations as to the nutrient content, including the fat,
of raw meat and poultry products. The organization referenced a
consumer telephone survey in which most respondents were unable to
identify which cut of meat had the highest fat content among four
choices. One medical organization stated that although it may be true
that the nutrient content of the major cuts is relatively uniform,
consumers generally have no idea of the nutrient content of these
foods.
The majority of industry and industry associations supported the
continued use of point-of-purchase nutrition information materials for
the major cuts, rather than nutrition labels on the packages of these
products. Two of these groups presented results of focus group research
demonstrating that consumers currently understand and use point-of-
purchase materials in numbers comparable to the number of consumers who
read and use the nutrition information on the labeling of products
subject to the requirements of the mandatory nutrition labeling
program. Additionally, according to the commenters, the focus group
research demonstrates that consumers are generally satisfied with the
current nutrition information provided for fresh meats.
One industry association stated that the use of individual
nutrition labels may result in consumers' viewing a smaller portion of
the product and paying a higher amount for the product, because of the
cost associated with maintaining a vast number of labels to be placed
on the package. Additionally, according to this commenter, if the
consumer intends to trim the fat from meat or remove the skin from
poultry products, the nutrition information on the label would not
adequately represent the product's nutrition information after fat had
been trimmed from it or skin from it had been removed.
One industry commenter stated that it is extremely difficult to
provide accurate nutrition information for each major muscle cut
because nutrient content varies depending on the breed and quality of
each animal. Another industry commenter stated that although
``average'' numbers from the USDA database are appropriate for point-
of-purchase materials, because of the potential variations in specific
individual cuts, trims and grades, the average numbers are not
appropriate for on-package labeling, where consumers justifiably expect
a label to accurately define the exact nutrient content of what is in
that package.
Two industry commenters stated that according to the Agency's own
survey, 62.7% of men and 57.9% of women rarely or never use the
nutrition information provided on raw meat, poultry or fish (see 66 FR
4982, January 18, 2001). They speculated that this low usage may in
part be explained by the fact that consumers already have reasonable
expectations regarding the nutrient values of these products as a
result of industry's voluntary efforts to provide this information.
Similarly, one retail association stated that consumers have reasonable
expectations as to the nutrient content of major cuts, and that the
nutrient content of a given major cut is relatively uniform across the
market. An industry commenter stated that, unlike ground meat,
consumers can see and remove the fat from whole muscle meat.
Another industry organization stated that single-ingredient, raw
meat and poultry products have a unique quality: the structure of the
cut, including the amount of fat, is visible both on the exterior and
within the muscle cut. As a result, consumers can visibly discern which
products are leanest. However, the commenter also believed that
consumers would benefit from additional nutrition information because
consumers cannot discern the quantitative nutrient content of single-
ingredient, meat and poultry products without the nutrition information
provided on point-of-purchase materials.
Response: As FSIS proposed, should this rule become final, it will
require that nutrition information be provided for the major cuts of
single-ingredient, raw meat and poultry products, either on the label
or at the point-of-purchase. Although FSIS continues to agree with the
commenters who stated that nutrition labels on the major cuts of
single-ingredient, raw products are useful, FSIS believes that
consumers have reasonable expectations as to the nutrient content of
these products and can make comparative judgments about the fat content
of the various cuts. While consumers' expectations for these products
may not be perfect, they are significantly more aware of the
nutritional content of single cuts of meat than the nutritional content
of ground meat. Thus, the rule allows an alternative way of providing
nutrition information for major cuts of single-ingredient, raw
products. As is discussed above, even though FSIS believes that
consumers have reasonable expectations concerning the nutrient content
of the major cuts, without nutrition information for these products,
consumers cannot assess specific nutrient levels in them and cannot
make educated choices about consuming them. These educated choices are
significant to a consumer's effort to construct a healthy diet.
FSIS does not believe that the telephone survey results used by a
consumer organization in support of their belief that most consumers do
not have reasonable expectations of the nutrient content of raw meat
and poultry demonstrate that consumers do not have reasonable
expectations concerning the major cuts. FSIS does not believe it is
reasonable to expect consumers in a telephone survey to be able to
identify which individual cuts of meat or poultry have the highest fat
levels. However, if shown pictures of the various cuts (that are not
ground or chopped), FSIS believes that most consumers could identify
the cut with the most fat, by its internal marbling and external fat
cover. The medical organization commenter that stated that consumers
generally have no idea of the nutrient content of the major cuts
provided no data to substantiate this statement.
Although individuals, and consumer organization commenters, stated
that point-of-purchase materials are difficult to read, they provided
no explanation for their assertion that these materials are difficult
to read. Their other concern about the difficulty of finding point-of-
purchase materials will be taken care of
[[Page 67746]]
by this rule. Should it become final, the rule will require that point-
of-purchase materials be made available in close proximity to the food
(Sec. 317.345(a)(3) and Sec. 381.445(a)(3)).
Regarding the health organization's comment that the same cut of
meat can be labeled by different names, and thus consumers would be
better informed by nutrition information on a product's label, FSIS is
not aware that consumers are confused about the names of the major cuts
of single-ingredient, raw products listed on point-of-purchase
materials. FMI was involved in developing these materials, and that
organization has the most current names used to designate the major
cuts. However, if necessary, retail facilities and establishments can
include multiple names for a major cut on point-of-purchase materials.
In addition, if FSIS is informed of specific cuts that are identified
by different names, FSIS will revise the point-of-purchase materials
that it is making available on the Internet.
After the comment period for the proposed rule ended, FSIS received
correspondence from industry stating that the list of major cuts in the
regulations should be changed to reflect more accurately the most
popular cuts in the market. This correspondence recommended removing
certain cuts and adding others. Because FSIS did not propose to amend
the codified list of major cuts in the regulations and did not provide
an opportunity for the public to comment on proposed changes to the
list, FSIS is not amending the list of major cuts in the regulations at
this time. However, FSIS will review this issue, and if the Agency
determines that a change in the list of major cuts is warranted to
accurately represent the market, FSIS will pursue future rulemaking.
Regarding the comments that noted that an advantage of including
nutrition information on the label is that consumers can review the
nutrient content of the product once the product is taken home, and
others besides the primary food purchaser would have better access to
this information, surveys, including the Diet and Health Knowledge
Survey (DHKS), show that a majority of individuals report using labels
while buying foods. Although the DHKS shows that adults who are not
main household shoppers use labels, the survey shows that the main
shoppers use labels at a higher rate than those who are not main
household shoppers. Also, FSIS assumes that if individuals in a
household have certain nutrition practices and needs, the person who
purchases food for the household would take other household members'
needs and preferences into account. In addition, FSIS assumes that
purchased food would typically be consumed by members of the household
and not thrown away.
In response to the comment that the nutrient content of the major
cuts may be more variable than that of ground products, FSIS recognizes
that there is significant variability in the nutrient content of the
major cuts depending on the grade of the product and the levels of
exterior fat on the products. However, the point-of-purchase materials
that FSIS and FMI have developed to convey nutrition information for
the major cuts take into account this variability and reflect average
nutrition information for these products. The information on the point-
of-purchase materials is meaningful and accurate for the major cuts.
Consumers can view the point-of-purchase materials to make educated
choices based on nutrition information among the different major cuts.
In addition, to further distinguish among different packages of the
same major cut, consumers can make comparisons based on levels of
visible fat on the product.
This coalition's other concern that it would be difficult for
producers or retailers to develop point-of-purchase materials to
address the different formulations and trim levels of the major cuts
need not be a concern. FSIS and FMI have made available nutrition
information that can be displayed at the point-of-purchase of the major
cuts of single-ingredient, raw meat and poultry products. These point-
of-purchase materials will meet the nutrition labeling requirements of
this rule, should it become final. Furthermore, requiring that all
major cuts of single-ingredient, raw meat and poultry products bear
nutrition labels would be a significant cost to the industry based on
FSIS's supplemental proposed cost analysis.
Comment: Two industry commenters stated that it was appropriate for
FSIS to provide point-of-purchase materials via the Internet. They
believed that this would lessen the burden on retailers unable to
develop appropriate customized nutrition information. One of these
commenters also stated that the Agency should develop point-of-purchase
materials so that the nutrition information supplied would be accurate
and consistent.
With regard to the type of point-of-purchase materials used to
display nutrition information, several commenters stated that easy to
understand charts that convey the information would be more helpful and
informative to consumers than a collection of individual labels on
display. One industry organization commenter, however, stated that each
option of the display of nutrition information on charts or on
individual display panels had advan