Fresh produce marketers and importers may be in for sticker shock when new food safety fees are implemented Oct. 1 by the Food and Drug Administration, some industry sources believe.
Brunhilde Merker, chief executive officer of Bradenton, Fla.-based Scoring Ag Inc., said the FDA intends to fund implementation of the Food Safety Modernization Act with the fees from the industry.
New rules relating to administrative detention and prior notice regulations, which took effect July 3 with the effective date of the food safety law, figure to prompt more industry fees, she said.
She said many food and agricultural trade organizations aren’t letting their members know the extent of industry obligations under the Food Safety Modernization Act and the steep fines they face if they are out of compliance.
“Most food importers will be surprised by any of the fees charged by FDA,” said Benjamin England, chief executive officer of FDAImports.com in an e-mail.
The fees, announced by the FDA in early August, apply to domestic and foreign facility reinspections, failure to comply with a recall order and importer reinspections.
The FDA said the fees would be billed at a rate of $224 per hour for direct work of FDA staff, excluding foreign inspection travel costs. The agency plans to charge $335 per hour for direct staff work requiring travel to another country.
England said in an e-mail that importers whose products are detained without any examination at all by FDA may receive a bill for $1,000 to $2,000, not to mention a substantial delay in their shipment.
The new fee structure will create what England called “new layers” of costs and fees for importers, England said in a news release.
John Pandol, special projects director for Delano, Calif.-based Pandol Bros. Inc., said it appears the FDA and policy makers facing budget pressure want to turn the agency into a completely user-fee funded agency like the shipping point inspection service.
“This is a funding mechanism, essentially a business tax,” he said.
While in principle the concept is not foreign to industry, he said that businesses should demand a lighter tax load if forced to pay heftier fees.
“Fees are the new tax,” he said.
Dan Vache, vice president of supply chain management for the Washington, D.C.-based United Fresh Produce Association, said the government is under pressure to pay for its expanded food safety duties.
“I don’t know if the fees are out of line or in line — that will be for the market to decide — but there is going to be a cost to it,” he said. “It has got to be implemented fairly and equally, but there is a price tag."
Under the administrative detention regulations as amended, an FDA officer or qualified employee will have authority to administratively detain food that the officer or qualified employee has “reason to believe” is adulterated or misbranded or is believed to have produced under unsanitary or unsafe conditions.
That standard, Merker said, is easier for the FDA to meet than the previous standard of “credible evidence or information indication that the article of food presents a threat of adverse serious healthy consequences or death to humans or animals.”
“Tell me which farm inspector or another qualified employee from FDA would inspect and could not find adulterated, misbranded food, or product made under unsanitary or unsafe conditions?” she said. “No case out there.”
So if the FDA puts more farms or facilities on administrative detention, she said they then could be set up to collect substantial fees when they return for a reinspection.
Likewise, while the regulation states that two examinations of a food must occur before the FDA can assess the new imported food fee, England said in the news release that the FDA has so broadly defined what constitutes the “first examination” that “virtually every imported food shipment on which FDA spends any resource will be subject to the re-examination fee.”
In the Federal Register notice, the FDA gave four examples when an importer can expect to pay a re-examination fee:
- When imported food is reconditioned or relabeled;
- When an importer is seeking release of an imported food under FDA detention;
- When an importer or foreign manufacturer petitions FDA requesting removal from FDA import alert; and
- When FDA supervises destruction of FDA refused food.
“These changes will dramatically increase the costs imposed on food importers and likewise, consumers,” England said in the release.
Merker said the best strategy to avoid paying reinspection user fees is to make sure food facilities are in compliance with U.S. laws and regulations and to maintain clear documentation of all corrective actions if there is a problem.