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.
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."