Crabmeat; Amendment of Common or Usual Name Regulation

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 102

[Docket No. 94P-0043]

Crabmeat; Amendment of Common or Usual Name Regulation

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA) is proposing to amend

the regulation for crabmeat by adding the species Callinectes sapidus

(C. sapidus) to those listed in the regulation and to provide that the

common or usual name of crabmeat derived from this species is ``Blue

crabmeat.'' FDA is further proposing, on its own initiative, to adopt

common or usual names for 18 additional crab species. FDA is proposing

these names based on ``The Seafood List'' and the information provided

in the National Blue Crab Industry Association (NBCIA) petition. This

proposal, which is in response to a citizen petition submitted by the

NBCIA, is intended to allow crabmeat packers to properly identify their

product so that consumers can make informed decisions.

DATES: Written comments by July 7, 1998. See section IV of this

document for the proposed effective date of a final rule based on this

document.

ADDRESSES: Submit written comments to the Dockets Management Branch

(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23,

Rockville, MD 20857.

FOR FURTHER INFORMATION CONTACT: Anthony P. Brunetti, Center for Food

Safety and Applied Nutrition (HFS-416), Food and Drug Administration,

200 C St. SW., Washington, DC 20204, 202-418-3160.

SUPPLEMENTARY INFORMATION:

I. Background

A. Crabmeat Labeling

The NBCIA, 1525 Wilson Blvd., suite 500, Arlington, VA 22209, filed

a petition on February 15, 1994, to amend the common or usual name

regulation for crabmeat (Sec. 102.50 (21 CFR 102.50)) to provide that

the common or usual name of crabmeat derived from the species C.

sapidus is ``Blue crabmeat.''

Section 102.50 lists the following genera and species of crabs and

the associated common or usual name of the meat from these crabs:

Chionoecetes opilio, Chionoecetes tanneri, Chionoecetes bairdii, and

Chionoecetes angulatus as Snow crabmeat; Erimacrus isenbeckii as Korean

variety crabmeat or Kegani crabmeat; Lithodes aequispina as Brown King

crabmeat; Paralithodes brevipes as King crabmeat or Hanasaki crabmeat;

and Paralithodes camtschaticus and Paralithodes platypus as King

crabmeat. (Note: The latter listing is currently incorrect in the Code

of Federal Regulations (CFR). The CFR lists the common or usual names

of Paralithodes camtschaticus as King crabmeat and Paralithodes

Platypus. This error is being corrected in this document.)

FDA has been dealing with common or usual name issues involving

crabmeat since 1954. In the Federal Register of April 8, 1954 (19 FR

2013), FDA announced its policy for the appropriate labeling of

imported canned crabmeat. FDA later codified this policy and the other

common or usual names for crabmeat in Sec. 102.50 when it issued part

102--Common or Usual Names For Nonstandardized Foods (21 CFR part 102)

in 1973 (38 FR 6966, March 14, 1973).

Guidance on the appropriate labeling of the crabmeats derived from

species that are not listed in Sec. 102.50 is set forth in the agency's

Compliance Policy Guides (CPG 7108.04). Under this guidance, products

derived from domestic sources that are labeled as ``crabmeat,'' without

additional qualification, are generally accepted as being derived from

C. sapidus (blue crab), historically one of the most common and widely

recognized sources of crabmeat in the United States. In labeling other

species of crab, the CPG encourages the use of a prefix that

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identifies the country where the crab was caught (e.g., ``Taiwan

Crabmeat'').

The NBCIA petition asserted that this policy no longer ensures that

the meat of C. sapidus is unambiguously identified. The petition argued

that consumers in the United States are being misled because, while

they have come to expect that products that are labeled only as

``crabmeat'' are derived from C. sapidus, in many instances, other,

less desirable crabmeats are being substituted, in whole or in part,

for the expected C. sapidus meat. Therefore, the petitioner requested

that FDA establish by regulation that the common or usual name ``Blue

crabmeat'' applies only to the meat of C. sapidus, thereby ensuring

that consumers will not be misled about the source and nature of the

crabmeat.

B. Common or Usual Name Provisions

The common or usual name of a food is the prevalent and meaningful

name by which consumers ordinarily identify the food. This vernacular

name may lack the specificity of the scientific or technical name of a

food, but an appropriate common or usual name permits the public to

distinguish between similar foods that are available in the

marketplace. The common or usual name of a food may be established by a

history of common usage or by regulation. Section 102.5 requires that

the common or usual name of a food accurately identify, in simple and

direct terms, the basic nature of the food and its characterizing

properties. The name must be uniform among all identical or similar

products. In fact, under 21 CFR 101.3(b)(1), a food with a common or

usual name that has been established by regulation is misbranded if it

is not identified by that name (see also section 403(b) of the Federal

Food, Drug, and Cosmetic Act (the act) (21 U.S.C. 343(b)).

Before proposing a common or usual name regulation, FDA tries to

ensure that the name that it is considering is not false or misleading

within the meaning of section 403(a) of the act, and that the name

conforms to the provisions of Sec. 102.5. Moreover, to prevent

confusion and deceptive economic practices, the agency must ensure that

the name is not inappropriately similar to one that has already been

established by regulation.

In the case of crabmeats, to conform to these principles, the

common or usual name needs to clearly identify the characterizing

properties that consumers in the United States associate with the meat

of a particular species or group of crab species (e.g., see 59 FR

36103, July 15, 1994). In some cases a geographical prefix serves this

purpose by alerting the consumer that the meat is not that of domestic

species.

C. Need to Establish a Common or Usual Name by Regulation

Section 403(a)(1) of the act states that a food shall be deemed to

be misbranded if its labeling is false or misleading in any particular.

Under section 403(b), a food is misbranded if it is offered for sale

under the name of another food. If a less valuable crabmeat is

substituted for the species represented on the label or labeling, the

product is adulterated under section 402(b)(2) of the act (21 U.S.C.

342(b)(2)), which states that a food shall be deemed to be adulterated

if any substance has been substituted wholly or in part thereof (i.e.,

economic adulteration). Consequently, it is a clear violation of the

act when a food such as crabmeat is not correctly identified on its

label or in its labeling.

The agency may provide guidelines about how to label a class of

foods, as in the case of fish and crabmeat, so that they are identified

in a manner that promotes honesty and fair dealing in the interest of

consumers. Nonetheless, false or misleading labeling practices

sometimes arise that persuade FDA of the need to require the use of a

common or usual name that will ensure that consumers are able to make

fair value judgments about a food they buy. For example, a regulation

prescribing a common or usual name may become necessary when there is

not consistent adherence to a guideline on labeling practice (e.g., to

the recommendation in CPG 7108.04 to provide the name of the country of

origin as a prefix to ``crabmeat'' for crabmeat other than that of C.

sapidus), when guidelines are not available, or when the guidance

provided would not adequately resolve differences that distinguish

similar foods, (e.g., the King crabmeats listed in Sec. 102.50 that are

harvested from the same waters).

Such a situation has arisen with respect to C. sapidus. As

explained in section II of this document, FDA has become convinced that

its admonition to marketers to follow the guidance in CPG 7108.04 is

not being followed. As a result, many consumers are not being

appropriately informed of the identity of the crabmeat that they are

buying. Therefore, under Sec. 102.19, FDA is proposing to adopt ``Blue

crabmeat'' as the common or usual name of meat from the species C.

sapidus and to adopt common or usual names for crabmeat derived from 18

other species of crab of which the agency is aware.

II. Grounds for the Petition

The NBCIA petition requested that FDA amend Sec. 102.50 to include

the species C. sapidus and to provide for the use of ``Blue crabmeat''

as the common or usual name of the meat of this species.

The petition contended that it is necessary for FDA to establish a

common or usual name regulation for the following reasons:

(1) Even though C. sapidus is commonly known as ``blue crab,''

there has also been wide acceptance of the generic term ``crabmeat'' to

refer to its meat because it is by far the most commonly available type

of crabmeat in many areas of the United States. It has become

commonplace, however, to import and repack, in the United States,

crabmeats that are generally of lower value, primarily derived from

non-C. sapidus species, and to label them also as ``crabmeat.''

(2) In some cases the imported crabmeat is blended with higher

value domestic blue crabmeat and misrepresented as being entirely C.

sapidus.

(3) Industry observations and Federal and State enforcement

activities provide evidence that the country of origin of imported

crabmeat often does not appear on the label after the meat has been

repacked in the United States, even though U.S. Customs Service

regulations require that the labels of imported products identify the

country of origin unless it has been substantially transformed.

(4) In the absence of a regulation, there are no binding rules to

determine which crabmeat products may be appropriately identified by

the name ``blue crabmeat.''

In support of its contention that the imported meats of other crab

species are being substituted for and represented as domestic C.

sapidus, the petition included a copy of a newspaper account of a

processor convicted in the State of Virginia of misbranding imported

crabmeat by representing it as locally harvested domestic crabmeat

(i.e., C. sapidus). The petition also included a copy of an Import

Alert issued by FDA for the detention of misbranded seafoods, including

products identified as blue crabmeat (No. 16-04--Revised, December 6,

1988). The Import Alert advised FDA inspectors to conduct surveillance

sampling and to review the import documents of incoming seafoods to

prevent the unlawful entry of ``various species of fish or other

seafood offered for entry into the United States under the name of a

fictitious, incorrect, or substituted species.'' The alert further

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advised that inspectors should sample entries of seafood labeled as a

species not common to the exporting country. The alert included as

guidance an appendix listing seafoods associated with previous

misbranding events, and the market names of species that might be

substituted, their scientific or likely fictitious name, and the region

or country from which specific species are normally available.

The petition asserted that ``blue crab'' is the appropriate common

or usual name to codify for C. sapidus because it is the widely

accepted common or usual name for this species. FDA acknowledges that

it has been the agency's longstanding policy to accept ``blue crab'' as

the common or usual name for C. sapidus. The Import Alert, as well as

the CPG for the appropriate labeling of crabmeats, demonstrate not only

FDA's acceptance of the common or usual name ``blue crabmeat,'' but

also attest to the measures the agency has taken to deal with the

ongoing problem associated with the proper identification and labeling

of crabmeats. For example, CPG 7188.04 states that ``Product labeled as

`crabmeat,' from domestic sources, without qualification are generally

accepted to have been derived from the blue crab, Callinectes

sapidus.'' Similarly, the petition noted that in the appendix of Import

Alert No. 16-04--Revised, FDA identified ``blue crabmeat'' as the

market name for C. sapidus and identified its source as the Atlantic

Ocean. Whenever possible, FDA recommends the use of the established

common or usual name of a food as the market name.

More recently, FDA identified C. sapidus with the common name

``blue crab'' in ``The Seafood List,'' which is the agency's guide to

acceptable market names and common names for the species of food fish

and invertebrates sold in U.S. interstate commerce that do not have

common or usual names established by regulation (57 FR 47144, September

14, 1994). In compiling this guide, FDA started with its own

information and experience, but the agency relied primarily on

consultation with seafood experts and authoritative works on seafood

nomenclature.

FDA has confirmed that authoritative nomenclature and trade

publications continue to accept ``blue crab'' as the common or usual

name for C. sapidus. For example, the American Fisheries Society

Special Publication 17, ``Common and Scientific Names of Aquatic

Invertebrates from the United States and Canada: Decapod Crustaceans,''

addresses adherence to uniform scientific and common nomenclature of

aquatic invertebrates and recognizes only C. sapidus by the common name

``blue crab'' (Ref. 1).

A nomenclature reference with an international perspective, ``Fish:

Five-Language Dictionary of Fish, Crustaceans and Molluscs,'' also

lists C. sapidus as ``blue crab'' (Ref. 2). Similarly, the

``Multilingual Dictionary of Fish and Fish Products,'' identifies

``blue crab (Atlantic-U.S.A.)'' as C. sapidus (Ref. 3).

Consequently, FDA agrees with the petitioner that ``blue crab'' is

the common or usual name for C. sapidus. That name is not only

descriptive of the remarkably distinctive blue coloration of the

animal's claws, but it is the meaningful and informative name that has

been established by common use.

III. The Proposed Regulation

The U.S. Government, including FDA, is concerned about recurring

incidents of misrepresentations about the content of domestic products

that are derived in whole or in part from imported crabmeat. The U.S.

Customs Service expressed this concern in a detailed examination and

ruling that addressed the relationship between the extent of domestic

processing performed on imported crabmeat (i.e., whether a

``substantial transformation'' has occurred) and the requirement for

country of origin labeling on the finished consumer product (Ref. 4).

The U.S. Customs Service ruling held that:

* * * the domestic processing of imported crab meat by thawing,

sorting, blending with domestic crabmeat, canning and pasteurization

does not constitute a substantial transformation. Accordingly, the

repacked crab meat is subject to the country of origin marking

requirements of 19 U.S.C. 1304 and 19 CFR 134 * * *.

The ruling also concluded that none of the above processing operations

``taken individually or together is sufficient to substantially

transform the crab meat into a product with a different name, character

or use.'' (Ref. 4)

The U.S. Customs Service ruling underscores the petitioner's

contention that the labeling of imported crabmeats is misleading,

particularly with regard to providing consumers with information that

will enable them to distinguish these crabmeats from domestic C.

sapidus similarly labeled as ``crabmeat.'' In light of the record of

misbranding of imported crabmeat products, including the agency's own

efforts to detect and prevent such abuses, FDA tentatively concludes

that the petitioner's claims that consumers are being misled are valid.

The agency agrees with the petitioner that, in the absence of a

regulation that requires C. sapidus to be labeled as ``Blue crabmeat,''

there is nothing that would require a conclusion that another crabmeat

is misbranded when it is identified as ``Blue crabmeat.'' FDA also

agrees with the petitioner that the generic ``crabmeat'' labeling of

imports misleads because it implies that the crabmeat is domestic Blue

crabmeat. Moreover, the term ``crabmeat'' does not adequately identify

the food or allow consumers to distinguish between similar crabmeats

that differ in value.

This proposal will remedy this situation because, if the agency

adopts the proposed regulation, the meat of C. sapidus is misbranded

unless it is labeled ``Blue crabmeat,'' and, conversely, if crabmeats

of other species are labeled as ``Blue crabmeat,'' they also will be

misbranded. Thus, the proposed action will protect consumers from the

confusing and misleading labeling of C. sapidus meat and from non-C.

sapidus meat being labeled as ``Blue Crabmeat.''

Consequently, FDA tentatively finds that the adoption of the common

or usual name ``Blue crabmeat'' for C. sapidus meat will promote

honesty and fair dealing in the interest of the consumer, and that this

name accurately identifies, in simple and direct terms, the basic

nature of the food and its characterizing properties. Accordingly, the

agency tentatively concludes that Sec. 102.50 should be amended to

include the name ``Blue crabmeat'' as the common or usual name for the

meat of C. sapidus.

However, FDA is not persuaded that this amendment will fully

respond to the labeling concerns raised and reflected in the petition.

Even if this proposed action becomes final, the meat of other crab

species not listed in Sec. 102.50 would continue to be labeled simply

as ``crabmeat,'' which many consumers will interpret as meaning that

the meat is from C. sapidus. For this reason and because of the

persistent misrepresentation of crabmeats, FDA has tentatively

concluded that the amendment requested by the petitioner is necessary

but not sufficient to prevent the continuing abusive crabmeat labeling

practices reviewed here. Therefore, the agency is proposing, on its own

initiative, to amend Sec. 102.50 more broadly than requested and to

provide that all crabmeats must be identified on their label or

labeling by the common or usual name of the species from which they are

derived, as identified by FDA in ``The Seafood List.''

The extension of Sec. 102.50 to include the common or usual name of

all crabmeats is consistent with Sec. 102.5(a): ``Each class or

subclass of food shall be given its own common or usual name

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that states, in clear terms, what it is in a way that distinguishes it

from different foods.'' Under this proposal, consumers will have a

means of differentiating among these similar foods. Products labeled

simply as ``crabmeat'' will be misbranded.

Moreover, FDA tentatively concludes that it is appropriate and

consistent with the efficient use of agency resources, to include these

additional common or usual names in one amendment to Sec. 102.50,

rather than to continue to propose separate rulemakings to codify these

names on a piecemeal basis, as it has since 1954.

As discussed under section II of this document, FDA has already

expended considerable public resources to make ``The Seafood List''

available. It is an authoritative compendium of seafood nomenclature

issued by FDA to promote the consistent and informative labeling of

seafood species. To aid in their proper identification, this

publication provides the scientific, ``common,'' and recommended market

names (and in some cases regional vernacular names as well) for all of

the domestic and imported species of finfish and invertebrates (shrimp,

shellfish, and crustaceans) that are sold interstate in significant

amounts as food in the United States.

The names entered under the ``Market'' heading in ``The Seafood

List'' are the common or usual names of the species that have been

established by common usage or by regulation. It is not uncommon to

find that closely related species have the same common or usual

(market) name. This also is the case with the species listed in

Sec. 102.50, where the meat from three different species of the

Paralithodes genera share the common or usual name ``King crabmeat.''

The names under the heading ``Common'' in ``The Seafood List'' are the

English language equivalent of the scientific name, and not the common

or usual name, although these two types of common name frequently are

very similar. When a common or usual name has not been established for

a species, FDA recommends the use of the listed ``common'' name as an

appropriate market name.

In addition to the common or usual names of the 6 crabmeats (from 9

species) that are currently listed in Sec. 102.50, ``The Seafood List''

identifies the following 19 crab species by their scientific and common

or usual (market) names: Callinectes sapidus (Blue crab), Lithodes

antarcticus (Centolla crab), Lithodes murrayi (Centolla crab),

Paralomis granulosa (Deepsea crab), Cancer magister (Dungeness crab),

Geryon fenneri (Golden crab), Cancer borealis (Jonah crab), Neolithodes

brodiei (Lithodes crab), Geryon quinquedens (Red crab), Cancer

irroratus (Rock crab), Cancer pagurus (Rock crab), Jacquinotia

edwardsii (Spider crab), Maja squinado (Spider crab), Menippi adina

(Stone crab), Menippi mercenaria (Stone crab), Callinectes arcuatus

(Swimming crab), Callinectes toxotes (Swimming crab), Portunus

pelagicus (Swimming crab), and Portunus puber (Swimming crab).

FDA tentatively finds that, given the process that has gone into

identifying and verifying the scientific and common or usual names of

the crab species included in ``The Seafood List,'' it is appropriate to

codify them in Sec. 102.50 Crabmeat. Accordingly, FDA proposes to add

the scientific and corresponding common or usual names of the 19 crab

species listed in ``The Seafood List'' to Sec. 102.50.

FDA solicits public comment on whether the agency should require,

as it has proposed, that all crabmeat labeling include the use of an

appropriate common or usual name to provide consumers with a more

complete identification of the crabmeats available in the marketplace.

FDA also solicits comment on whether there are other crab species that

should be included in Sec. 102.50, and, if there are, what the common

or usual names is of each of these species.

If this proposal is finalized, anyone engaged in the interstate

commerce of a crabmeat that is not listed in Sec. 102.50 will have to

petition FDA to include that species in the common or usual name

regulation. The petition should demonstrate either the existence of an

accepted common or usual name or propose to establish an appropriate

one.

In recent years, FDA has developed a computer data base known as

the ``Regulatory Fish Encyclopedia'' (RFE) to help ensure that the

economic adulteration of seafoods can be detected and confirmed by

scientific methods. As an aid to the identification of species by FDA

field investigators, industry, and the public, the RFE is readily

accessible on the Internet (vm.cfsan.fda.gov/ centsfrf/

rfe0.html) and from FDA's World Wide Web site. The RFE makes available

high resolution, annotated color images of more than 60 authenticated

fish species, as well as the unique electrophoretic patterns of the

flesh proteins of about two-thirds of these species (i.e., their

``biochemical fingerprints'') (Ref. 5). Thus, in addition to a visual

comparison of their anatomical features, an authentic protein pattern

of a species that is displayed in the RFE can be compared with one

obtained by isoelectric focusing methods from a suspected substitute

species to determine whether misbranding and economic adulteration have

occurred.

FDA is in the early stages of collecting and photographing

authenticated species of various crabs, including C. sapidus; and the

agency has plans to determine the unique biochemical pattern of their

flesh proteins or, if necessary because crabmeat is often cooked, to

determine the patterns of their cellular DNA (deoxyribonucleic acid)

components for inclusion in the RFE. Thus, the RFE resources, when

combined with requirements for the unambiguous labeling of these foods

as proposed herein, will provide FDA with an effective means of

establishing the identity of different crabmeats and combating economic

fraud.

Under the proposed action, crabmeats that are labeled as ``Blue

crabmeat'' and found to consist in whole or in part of crabmeat from

other than C. sapidus will be misbranded and may be adulterated and

will be subject to compliance action by the agency. Similarly, all

other crabmeat will be misbranded unless labeled in accordance with the

common or usual (market) name given in Sec. 102.50.

Therefore, after a careful review of the petition and consideration

of all of the available information, FDA is proposing to amend

Sec. 102.50 Crabmeat, by adding the crabmeat of the species C. sapidus,

identified by the common or usual name ``Blue crabmeat.'' FDA is also

proposing to amend Sec. 102.50 by adding the scientific names of 18

additional crab species and the associated 11 common or usual names of

their crabmeats as identified in ``The Seafood List.'' For the ease of

the reader, FDA is proposing to further revise the table in Sec. 102.50

by placing the ``Common or usual name of crabmeat'' in the first column

followed by the ``Scientific name of crab'' in the second column. FDA

also is correcting an inadvertent error that occurred in the Federal

Register of July 3, 1995 (60 FR 34459 at 34460), in the scientific name

column whereby the scientific name Paralithodes Platypus was

incorrectly placed in the ``Common or usual name of crabmeat'' column

and the word Platypus was incorrectly capitalized.

The impacts of this proposed rule on U.S. consumers and businesses

are discussed in section V of this document. However, this proposed

rule may also raise international trade issues that are not discussed

in section V of this document. International trade issues may arise

because the labeling changes necessitated by common or usual names may

increase the demand for certain species of crab and decrease the demand

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for other species of crab and because different countries and regions

may harvest different species of crab. In some cases, these changes in

demand will simply reflect preexisting differences in the value

consumers place on the different species of crab. However, in other

cases, these changes in demand might result from adverse consumer

attitudes towards certain of the proposed common or usual names. For

example, some consumers might find the name ``Spider crabmeat''

unappealing, creating an aversion to Spider crabmeat that did not

previously exist. International trade effects caused by adverse

consumer attitudes toward certain of the proposed common or usual names

would ordinarily be considered a greater cause of concern than

international trade effects caused by preexisting consumer preferences

for different species of crab. FDA requests information on the

international trade effects of this rule.

IV. Effective Date

The agency periodically has established by final rule in the

Federal Register uniform effective dates for compliance with food

labeling requirements (see, e.g., the Federal Register of December 27,

1996 (61 FR 68145)). FDA proposes that any final rule that may issue

based upon this proposal become effective in accordance with a uniform

effective date for compliance with food labeling requirements, which is

established by final rule in the Federal Register and which is not

sooner than 1 year following publication of any final rule based upon

this proposal. The final rule would apply to affected products

initially introduced or initially delivered for introduction into

interstate commerce on or after its effective date. However, FDA notes

that it generally encourages industry to comply with new labeling

regulations as quickly as feasible. Thus, when industry members

voluntarily change their labels, it is appropriate that they respond to

any new requirements that have been published as final regulations up

to that time. On the other hand, if any industry members can foresee

that the proposed effective date will create particular problems, they

should bring these problems to the agency's attention in comments on

this proposal.

V. Analysis of Impacts

A. Executive Order 12866

FDA has examined the impacts of this proposed rule under Executive

Order 12866. Executive Order 12866 directs Federal agencies to assess

the costs and benefits of available regulatory alternatives and, when

regulation is necessary, to select regulatory approaches that maximize

net benefits (including potential economic, environmental, public

health and safety effects; distributive impacts; and equity). According

to Executive Order 12866, a regulatory action is ``economically

significant'' if it meets any one of a number of specified conditions,

including having an annual effect on the economy of $100 million or

adversely affecting in a material way a sector of the economy,

competition, or jobs. A regulation is considered ``significant'' under

Executive Order 12866 if it raises novel legal or policy issues. FDA

finds that this proposed rule is neither an economically significant

nor a significant regulatory action as defined by Executive Order

12866. In addition, it has been determined that this proposed rule is

not a major rule for the purpose of congressional review.

1. Options

FDA has assessed the costs and benefits of the following regulatory

alternatives: Take no action, take the proposed action, or establish a

common or usual name only for crabmeat derived from blue crab.

2. Benefits and Costs

a. Option one: Take no action. By convention, the option of taking

no action is the baseline in comparison with which the costs and

benefits of the other options are determined. Therefore, neither costs

nor benefits are associated with taking no action.

b. Option two: Take the proposed action.

i. Benefits. The benefit of the proposed action is that consumers

will be able to more easily identify the species source of crabmeat for

which this proposed rule establishes common or usual names. The value

consumers place on being able to more easily identify crabmeat derived

from these species of crab is not known. However, in general terms, if

consumer valuation of crabmeat differs widely by species, and consumers

cannot differentiate those species in the absence of the proposed

common or usual name regulations, then consumers will derive greater

benefit from the establishment of the proposed common or usual names.

If, in addition, consumers assume that products labeled simply as

containing crabmeat contain a particular and relatively valuable

species of crab, then the proposed common or usual names will protect

consumers from the economic fraud associated with the substitution of

crabmeat derived from a less valuable species of crab for that crabmeat

derived from the more valuable species of crab. On the other hand, if

consumer valuation of crabmeat does not differ widely by species, or if

consumers can already differentiate species, e.g., because they are

already labeled in a manner consistent with the proposed common or

usual name regulations, then consumers will place relatively little

value on the establishment of the proposed common or usual names.

FDA requests information about the following: Whether consumers can

differentiate crabmeats derived from different species of crabs and, if

so, how; whether consumers assume that products labeled simply as

containing crabmeat contain a particular species of crab; and whether

consumers place different values on crabmeats derived from different

species of crabs. The agency also is interested in pricing data for

crabmeat from different species. In particular, the agency is

interested in data that takes into account seasonal availability and

other factors that complicate price comparisons. The agency also

requests information from consumers, crabmeat packers, and crabmeat

product distributors about their experiences with species substitution

practices, that is, where a less valuable crabmeat is substituted for a

more valuable crabmeat.

ii. Costs. The primary social cost of the proposed action is the

cost of changing the labels of crabmeat products that are not already

labeled in a manner consistent with the proposed common or usual names.

Depending on market conditions, these costs may be borne by crabmeat

processors, packers, or repackers or may be passed on to consumers in

the form of higher prices. This rule may also produce distributive

effects, that is, this rule may make some firms and regions better off

and some firms and regions worse off.

Labeling costs were estimated using a model developed for that

purpose by Research Triangle Institute (RTI) under contract to FDA. The

model allows one to estimate labeling costs based on the length of the

compliance period, the complexity of the labeling change, and the

Standard Industrial Code (SIC) classifications of the affected firms.

The resulting labeling costs were comprised of administrative,

redesign, and inventory costs. Total labeling costs are calculated by

multiplying administrative costs by the number of affected firms and by

multiplying redesign and inventory costs by the number of affected

product lines, or Stock Keeping Units (SKU's). SKU's

[[Page 20153]]

differ from one another on the basis of either product formulation or

packaging.

The proposed effective date is the next uniform effective date for

labeling regulations following the publication of a final rule based on

this proposal. This effective date will provide a compliance period of

at least 1 year. The relevant SIC codes appear to be 2091, Canned and

Cured Fish and Seafoods, and 2092, Fresh or Frozen Packaged Fish. The

complexity of the required labeling changes depends on the current

labeling of the affected products. If these products are currently

labeled in such a way that only the ingredient list needs to be

changed, then the required labeling changes will be relatively simple.

If these products are currently labeled in such a way that both the

ingredient list and the principal display panel must be changed, then

the required labeling changes will be relatively complex. FDA has

insufficient information on the current labeling of these products to

estimate the proportion of products requiring label changes of

different levels of complexity. Therefore, labeling costs will be

estimated both for the case in which all affected products require only

changes to the ingredient list and for the case in which all affected

products require changes to both the ingredient list and the principal

display panel. Actual labeling costs should fall somewhere between

these two estimates.

The number of firms potentially affected by the proposed rule was

determined using two data sources. These data sources differ with

respect to data collection techniques, the frequency with which the

data are updated, and so forth. Evaluation of the strengths and

weaknesses of these data sources would be quite complex. Therefore,

both data sources have been used.

One data source used to estimate the number of potentially affected

firms was the Duns Market Identifiers data base. A search of this data

base identified 108 establishments associated with 92 firms that appear

to produce crab products of the type that would be affected by this

proposed rule. In this case, the search procedure involved identifying

establishments with either SIC 2091 or 2092 as their primary or

secondary activity and having the word ``crab,'' but not the word

``imitation,'' in the description of their activity. The number of

firms associated with these establishments was determined by further

limiting the search to single establishment firms or headquarters of

multiestablishment firms.

The other data source used to estimate the number of potentially

affected firms was FDA Official Establishment Inventory (OEI). The OEI

is a list of all establishments known to FDA.

A search of the OEI identified 594 establishments that are listed

as either manufactures of crab products or crab repackers and that,

therefore, could be affected by the proposed rule. Based on FDA

experience, most of these plants probably represent independent firms.

Based on these two data sources, the number of firms that might be

affected by the proposed rule is estimated to be in the range of 92 to

594 firms.

The potential number of SKU's involved was estimated using the

average number of distinct items per brand for crab products listed in

the A. C. Nielsen Co. SCANTRACK Market Planner data base. This data

base listed 210 brands and 346 items, for an average of 1.6 items per

brand. Items are defined with respect to both product formulation and

package size and, therefore, should correspond to SKU's. This average

number of items or SKU's per brand was then multiplied by the estimated

range of potentially affected firms to get a range of potentially

affected SKU's. This procedure assumes that each firm is associated

with only one brand name. Although some large firms may produce

products under multiple brand names, the assumption of one brand name

per firm is probably reasonable for most firms. Under these

assumptions, the number of potentially affected SKU's is estimated to

be between 147 and 950.

Some of the firms and SKU's that are potentially affected by the

proposed rule might not actually be affected. In particular, some firms

producing crab products might produce products containing only those

nine species of crab for which common or usual names are already

required by Sec. 102.50. The products produced by these firms would not

require label changes. In addition, some of the firms producing

products containing species of crab for which common or usual names are

being proposed might already be using the proposed common or usual

name, which would be consistent with existing FDA labeling guidance

provided in ``The Seafood List.'' Label changes would also not be

required for these products. However, information is not available on

the number of products that meet either of these conditions. To address

the uncertainty generated by the absence of information on this issue,

labeling costs will be estimated as a range with the low end of the

range set to $0. Although it is unlikely that no products would require

label changes, and that the cost of relabeling would actually be $0, it

is possible that only a few products may need to be relabeled, and that

relabeling costs might be quite low.

For a compliance period of 1 year, the RTI labeling cost model

estimates the administrative costs for changing only the ingredient

list and for changing both the ingredient list and the principal

display panel to be $850 per firm for firms having fewer than 10

employees and to be $6,300 per firm for firms having 10 or more

employees. Administrative costs are the same for firms in both SIC 2091

and 2092. With respect to firms listed in the Dun's Market Identifiers

data base, 23 of the 92 firms are identified as having fewer than 10

employees. Data on the number of employees is not available for firms

listed in the OEI. In the absence of other information, it is

reasonable to suppose that the proportion of firms listed in the OEI

that have fewer than 10 employees is the same as the proportion of

firms listed in Dun's Market Identifiers. Under this assumption, 149 of

the 594 firms listed in the OEI would have fewer than 10 employees.

Based on these data and assumptions, total potential administrative

costs are estimated to between $0.5 million and $3 million. Taking into

account the fact that some potentially affected products may not

contain the relevant species of crab or may already be labeled

appropriately, administrative costs are estimated to be between $0 and

$3 million.

For a compliance period of 1 year, the RTI labeling cost model

estimates combined redesign and inventory costs for changing the

ingredient statement only to be $290 per SKU for firms in SIC 2091 and

$714 per SKU for firms in SIC 2092. That model estimates combined

redesign and inventory costs for changing the ingredient statement and

the principal display panel to be $1,740 per SKU for firms in SIC 2091

and $4,284 per SKU for firms in SIC 2092. Based on data from Dun's

Market Identifiers, 17 potentially affected number are listed in SIC

2091, 62 firms are listed in SIC 2092, and 13 firms are listed in both.

For the purposes of estimating costs, it seems reasonable to distribute

the 13 firms that are in both SIC classes to one of the two relevant

SIC classes in the same proportion as the firms found in only one of

the relevant SIC classes. Under this assumption, 20 potentially

affected firms would be found in SIC 2091 and 72 affected firms would

be found in SIC 2092. Based on 1.6 SKU's per firm, this implies that

the number of potentially affected SKU's in SIC 2091 is 32 and the

[[Page 20154]]

number of potentially affected SKU's in SIC 2092 is 119.

The OEI does not list firms by SIC. Therefore, it seems reasonable

to suppose that the proportions of the relevant firms in SIC 2091 and

SIC 2092 are the same as the proportions of the relevant firms in Dun's

Market Identifiers. Under this assumption, 128 of the potentially

affected 594 firms listed in the OEI would be in SIC 2091 and 466 of

those firms would be in SIC 2092. Based on 1.6 SKU's per brand name,

this implies that the number of potentially affected SKU's in SIC 2091

is 211 and the number of potentially affected SKU's in SIC 2092 is 768.

Based on the estimated number of potentially affected SKU's using

Dun's Market Identifiers and the OEI, total potential redesign and

inventory costs are estimated to be between $0 and $1 million for

changing the ingredient statement only and between $1 million and $4

million for changing both the ingredient statement and the principal

display panel. Taking into account the fact that some potentially

affected products may not contain the relevant species of crab or may

already be labeled appropriately, redesign and inventory costs are

estimated to be between $0 and $4 million. Total labeling costs,

including administrative, redesign, and inventory costs, are estimated

to be between $0 and $7 million.

Labeling costs will be higher if some crabmeat products are

currently made using any one of a number of species of crab. In that

case, this proposed rule would require multiple product labels to be

printed for products that currently use only one generic ``crabmeat''

label. Additional costs will be generated if compliance with the

proposed labeling requirements involve other changes to the current

method of manufacturing crabmeat products. However, FDA is not aware of

any such costs. It should be noted that products may continue to be

made with blends or mixtures of crabmeats, provided that each crabmeat

in the blend or mixture is identified with its common or usual name.

FDA requests information on the degree to which different crabmeats are

used in the same products, and on any costs that may be generated by

this proposed rule, including labeling, manufacturing, storage, and

recordkeeping costs.

In addition to social costs, there may be distributive effects

associated with establishing the proposed common or usual names because

the labeling changes necessitated by common or usual names may increase

the demand for certain species of crab and decrease the demand for

other species of crab. In some cases, these changes in demand will

simply reflect preexisting differences in the value consumers place on

the different species of crab. However, in other cases, these changes

in demand might result from adverse consumer attitudes towards certain

of the proposed common or usual names. For example, some consumers

might find the name ``Spider crabmeat'' unappealing, creating an

aversion to Spider crabmeat that did not previously exist. Distributive

effects caused by adverse consumer attitudes toward certain of the

proposed common or usual names would ordinarily be considered a greater

cause of concern than distributive effects caused by preexisting

consumer preferences for different species of crab. FDA has

insufficient information to estimate changes in the demand for various

species of crab or to determine the degree to which any changes in

demand reflect either preexisting preferences or consumer attitudes

toward the words used in the proposed common or usual names. FDA

requests information on the distributive effects of this rule. In

addition, FDA requests information on whether any of the proposed

common or usual names might reduce the demand for a particular species

of crab for reasons unrelated to preexisting preferences for that

species of crab.

c. Option three: Establish a common or usual name only for blue

crabmeat.

i. Benefits. FDA cannot estimate the difference in the benefits of

this option relative to the benefits of taking the proposed action

because FDA does not have information on the value consumers place on

blue crabmeat relative to crabmeat from other species of crab, the

degree to which consumers can already differentiate products that

contain blue crabmeat from products that contain crabmeat from other

species of crab, or the degree to which consumers assume that products

labeled as ``crabmeat'' contain blue crabmeat. FDA requests public

comment and information on these issues.

ii. Costs. The costs associated with this option would be less than

the costs associated with taking the proposed action because this

option would affect only a subset of the products that would be

affected by the proposed action. Therefore, estimated labeling costs

would be less than $7 million and any other costs associated with the

proposed action would also be less than they would be under the

proposed action. FDA cannot estimate the difference in costs more

precisely because FDA has information only on the number of products

that contain crabmeat, not on the number of products than contain blue

crabmeat. FDA requests information on the number of products containing

exclusively blue crabmeat or on the proportion of all crabmeat-

containing products that contain blue crabmeat.

B. Analysis of Impacts on Small Businesses

FDA has examined the impacts of this proposed rule under the

Regulatory Flexibility Act. The Regulatory Flexibility Act (5 U.S.C.

601-612) requires Federal agencies to consider alternatives that would

minimize the economic impact of their regulations on small businesses

and other small entities. FDA finds that this proposed rule, if issued,

might have a significant impact on a substantial number of small

entities.

1. Options

FDA has assessed the impacts on small entities of the following

regulatory alternatives:

Take no action, take the proposed action, or establish a common or

usual name only for crabmeat derived from blue crab.

a. Option one: Take no action. Taking no action would have no

impact on small businesses.

b. Option two: Take the proposed action. As discussed in the

Executive Order 12866 analysis, the primary cost of taking the proposed

action is the cost of changing the labels of products that contain the

relevant species of crab and that are not already labeled in a manner

consistent with the proposed common or usual names for those species.

This cost was estimated to be between $0 and $7 million for all firms.

The Small Business Administration's definition of a small business for

the SIC codes identified as relevant in the Executive Order 12866

analysis, SIC codes 2091 and 2092, is a firm having 500 or fewer

employees. Under this definition, 88 of the 92 firms identified in the

Dun's Market Identifiers data base as potentially affected by this

proposed rule are small businesses. As indicated previously, the OEI

does not contain information on the number of employees.

Based on this information, it is likely that some portion of the

costs estimated for all firms will be borne by small businesses. A more

precise estimation of the proportion of estimated total costs borne by

small firms would require information that is not currently available

on the average difference in the number of SKU's (products and product

sizes) produced by large and small firms. The estimated costs could be

significant for some small firms.

[[Page 20155]]

However, only relatively modest cost reductions would be produced by

further lengthening the compliance period, and any level of cost could

be significant for some small firms.

With respect to the distributive effects discussed in the benefit-

cost analysis of this option, FDA has no information to suggest

systematic differences in the species of crabs used by small and large

firms. Therefore, FDA has no reason to suspect that any distributive

effects will have a net negative effect on small firms as a class of

firms. Of course, some of the firms that may be negatively affected by

distributive effects may be small firms.

c. Option three: Establish a common or usual name for blue crab

only This option would reduce the impact of this proposed rule on small

businesses because this option would affect only a subset of the

products that would be affected by taking the proposed action. FDA

cannot estimate the reduction of the impact on small businesses for two

reasons. First, FDA has information only on the number of products that

contain crabmeat, not on the number of products than contain blue

crabmeat. Therefore, FDA cannot determine the degree to which total

costs would be reduced by this option. Second, FDA has information only

on the number of small businesses that manufacture products containing

crabmeat, not on the number of small businesses that manufacture

products containing blue crabmeat. Therefore, FDA cannot determine the

proportion of the total cost reduction that would accrue specifically

to those small businesses that manufacture crabmeat products without

blue crabmeat. FDA requests information on the number of products that

contain blue crabmeat and the number of small businesses that produce

products containing blue crabmeat. FDA also requests information on the

number of products that contain crabmeat from other species of crab,

and the number of businesses and small businesses that produce products

containing crabmeat from other species of crab. Finally, FDA also

requests information on other alternatives that might reduce the burden

of this proposed rule on small businesses.

VI. Environmental Impact

The agency has determined under Sec. 25.30(k) (21 CFR 25.30(k))

that this action is of a type that does not individually or

cumulatively have a significant effect on the human environment.

Therefore, neither an environmental assessment nor an environmental

impact statement is required. The purpose of the proposed rule is to

ensure that consumers are informed about the identity of all crabmeats,

and this will not change the intended use of this food product. The

proposed action is not expected to increase the demand for blue

crabmeat because the competition in the marketplace between blue

crabmeat and lower priced crabmeat from other species of crabs can be

expected to control the demand for blue crabmeat. However, because the

impact of this proposed rulemaking on consumer demand for blue crabmeat

is uncertain, FDA solicits public comment on any adverse effects the

proposed labeling provisions may have on blue crab populations. The

agency will evaluate its tentative conclusion that the proposed action

warrants a categorical exclusion under Sec. 25.30(k) in light of any

relevant comments responding to this proposal.

VII. References

The following references have been placed on display in the Dockets

Management Branch (address above) and may be seen by interested persons

between 9 a.m. and 4 p.m., Monday through Friday.

1. Williams, Austin B., Lawrence G. Abele, et al., ``Common and

Scientific Names of Aquatic Invertebrates from the United States and

Canada: Decapod Crustaceans,'' American Fisheries Society Special

Publication 17, pp. 41, 1989.

2. Organization for Economic Cooperation and Development,

``Multilingual Dictionary of Fish and Fish Products,'' 3d ed.,

Fishing News Books, pp. 63, 1990.

3. Krane, W., ``Five-Language Dictionary of Fish, Crustaceans

and Molluscs,'' Van Nostran Reinhold, pp. 32, 1986.

4. Letter to the District Director, U.S. Customs Service,

Department of the Treasury, from Harvy B. Fox, Director, Office of

Regulations and Rulings, U.S. Customs Service, Department of the

Treasury, Washington DC, regarding ``Country of Origin Marking of

Canned Crabmeat,'' August 6, 1989.

5. AOAC Official Methods of Analysis 980.16 Identification of

Fish Species, Thin Layer Polyacrylamide Gel Isoelectric Focusing

Method, p. 885, 1990.

VIII. Comments

Interested persons may on or before July 7, 1998, submit to the

Dockets Management Branch (address above) written comments regarding

this proposal. Two copies of any comments are to be submitted, except

that individuals may submit one copy. Comments are to be identified

with the docket number found in brackets in the heading of this

document. Received comments may be seen in the office above between 9

a.m. and 4 p.m., Monday through Friday.

List of Subjects in 21 CFR Part 102

Beverages, Food grades and standards, Food labeling, Frozen foods,

Oils and fats, Onions, Potatoes, Seafood.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under

authority delegated to the Commissioner of Food and Drugs, it is

proposed that 21 CFR part 102 be amended as follows:

PART 102--COMMON OR USUAL NAME FOR NONSTANDARDIZED FOODS

1. The authority citation for 21 CFR part 102 continues to read as

follows:

Authority: 21 U.S.C. 321, 343, 371.

2. Section 102.50 is revised to read as follows:

Sec. 102.50 Crabmeat.

The common or usual name of crabmeat derived from each of the

following designated species of crabs shall be as follows:

------------------------------------------------------------------------

Common or usual name of crabmeat Scientific name of crab

------------------------------------------------------------------------

Blue crabmeat Callinectes sapidus.

Brown King crabmeat Lithodes aequispina.

Centolla crabmeat Lithodes antarcticus and Lithodes

murrayi.

Deepsea crabmeat Paralomis granulosa.

Dungeness crabmeat Cancer magister.

Golden crabmeat Geryon fenneri.

Jonah crabmeat Cancer borealis.

King crabmeat Paralithodes camtschaticus and

Paralithodes platypus.

King crabmeat or Hanasaki crabmeat Paralithodes brevipes.

Korean variety crabmeat or Kegani Erimacrus isenbeckii.

crabmeat

[[Page 20156]]

Lithodes crabmeat Neolithodes brodiei.

Red crabmeat Geryon quinquedens.

Rock crabmeat Cancer irroratus and Cancer

pagurus.

Snow crabmeat Chionoecetes angulatus,

Chionoecetes bairdi, Chionoecetes

opilio, and Chionoecetes tanneri.

Spider crabmeat Jacquinotia edwardsii and Maja

squinado.

Stone crabmeat Menippi adina and Menippi

mercenaria.

Swimming crabmeat Callinectes arcuatus, Callinectes

toxotes, Portunus pelagicus, and

Portunus puber.

------------------------------------------------------------------------

Dated: April 17, 1998.

William K. Hubbard,

Associate Commissioner for Policy Coordination.

[FR Doc. 98-10743 Filed 4-22-98; 8:45 am]

BILLING CODE 4160-01-F