Nutrition Labeling of Single-Ingredient Products and Ground or Chopped Meat and Poultry Products

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

http://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

http://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 §§ 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-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

(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) 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

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 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

(

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 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 § 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

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 § 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 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

§§ 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

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:

http://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:

http://www.fmi.org/consumer/nutrifacts/

.

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:

http://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

EP18DE09.421

EP18DE09.422

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

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

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 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 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-of-purchase 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:

http://www.fsis.usda.gov

. Point-of-purchase materials are also available from FMI at the following Internet address:

http://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

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-of-purchase 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 point-of-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 single-ingredient, raw products, should this rule become final, it will allow nutrition information on the label or on point-of-purchase 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 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 multi-ingredient 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.

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-

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 (

http://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 single-ingredient, 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 point-of-purchase either materials that were 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-of-purchase 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 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

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:

http://www.fsis.usda.gov/Frame/FrameRedirect.asp?main=http://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 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 on-package nutrition labeling had concerns regarding the economic impact of this labeling.

Most industry trade associations and grocer associations did not support on-package 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-of-purchase labeling, would provide 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 “case-ready” 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

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 on-package 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 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 single-ingredient, raw ground or chopped products, rather than at their point-of- purchase. 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:

http://www.ars.usda.gov\nutrientdata

. In addition, ARS has included a calculator on the Internet, with the Database, that 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

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 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 than 24 months to investigate whether required nutrition labeling for single-ingredient, 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

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 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.

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.

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-of-purchase 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-of-purchase 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 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 multi-plant 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, ready-to-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 retail-type 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 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

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 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 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.

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 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-O-Meter 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 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

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 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 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.

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:

http://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 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 non-fatal 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.

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 non-fatal 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

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.

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 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.,

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 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 State-inspected 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 o

This text is long and has been trimmed here. Open the source document for the complete record.