United States General Accounting Office

GAO Report to Congressional Committees

April 1999 FRESH PRODUCE

Potential

Consequences of

Country-of-Origin

Labeling

GAO/RCED-99-112

GAO United States

General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-282173 

April 21, 1999

The Honorable Thad Cochran

Chairman

The Honorable Herb Kohl

Ranking Minority Member

Subcommittee on Agriculture, Rural

 Development, and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Joe Skeen

Chairman

The Honorable Marcy Kaptur

Ranking Minority Member

Subcommittee on Agriculture, Rural

 Development, Food and Drug Administration,

 and Related Agencies

Committee on Appropriations

House of Representatives

The containers in which fresh produce of foreign origin enters the United

States must be marked with the country-of-origin. However, this

identification is not required to be maintained for loose, or bulk, produce

at the retail level.1

 In the past few years, several legislative proposals have

been introduced to require that fresh produce be labeled at the retail level

by its country of origin.

As requested by the Senate and House conferees for the Omnibus

Consolidated and Emergency Supplemental Appropriations Act, 1999,2

 we

reviewed a number of issues associated with the potential costs and

benefits of a mandatory labeling requirement. Specifically, as agreed with

your offices, this report provides information on (1) the potential costs

associated with the compliance and enforcement of a mandatory

country-of-origin labeling requirement at the retail level for fresh produce,

(2) the potential trade issues associated with such a requirement, (3) the

potential impact of such a requirement on the ability of the federal

government and the public to respond to outbreaks of illness caused by

contaminated fresh produce, and (4) consumers’ views of

1

This report uses the term “loose produce” to refer to bulk produce.

2

Conference Report 105-825 accompanied H.R. 4328, which became the Omnibus Consolidated and

Emergency Supplemental Appropriations Act, 1999 (P.L. 105-277, Oct. 21, 1998).

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country-of-origin labeling. Finally, appendix I identifies U.S. trading

partners that have country-of-origin labeling requirements for fresh

produce, the nature and scope of those requirements, and the record of

U.S. challenges to those requirements.

For the purpose of this report, and as agreed with your offices, we

assumed that the retailer would be responsible for ensuring that produce

is labeled as to its country of origin and that the term “label” means any

label, mark, sticker, stamp, placard, or other clear visible sign.

Results in Brief The magnitude of compliance and enforcement costs for a

country-of-origin labeling requirement at the retail level would depend on

several factors, including the extent to which current labeling practices

would have to be changed. According to an association representing

grocery retailers, changing store signs to ensure that produce is properly

labeled would cost about 2 staff hours per store per week. However, it is

unclear who would bear the burden of any such additional labeling

costs—retailers could absorb some or all of the costs or pass them to

consumers or to their suppliers. Regarding enforcement, the Food and

Drug Administration, in commenting on a recently proposed bill, estimated

that federal monitoring would cost about $56 million annually and said

that enforcement would be difficult. Inspectors would need documentary

evidence to determine the country-of-origin of the many produce items on

display, and this documentation is often not available at each retail store.

Enforcement is carried out in only one of the three states with labeling

laws—in Florida, where inspectors check shipping boxes against display

signs during semiannual routine state health inspections. Florida

inspectors told us that they sometimes have no reliable means to verify the

accuracy of labels.

According to U.S. Department of Agriculture officials and industry

representatives, mandatory labeling at the retail level could be viewed by

other countries as a trade barrier. For example, a country currently

exporting produce to the United States may be concerned about the

additional costs its exporters may incur if they are required to label loose

produce. Officials also noted that countries concerned with a labeling law

could take actions that could adversely affect U.S. exports. For example,

these countries may develop or more strictly enforce their own labeling

laws. Currently, about half of the countries that account for most of the

U.S. trade in produce require country-of-origin labeling for fresh produce

at the retail level. Additionally, officials from the departments of

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Agriculture and State believe that a U.S. labeling law is more likely to be

challenged than other countries’ labeling laws because the United States is

such a large importer and exporter of fresh produce.

When outbreaks of foodborne illness occur, country-of-origin labeling for

fresh produce would be of limited benefit to food safety agencies in

tracing the source of contamination and to the public in responding to a

warning of an outbreak, according to officials from the Food and Drug

Administration and the Centers for Disease Control and Prevention. It can

take weeks or months for food safety agencies to identify an outbreak,

determine the type of food involved, identify the source of the food

contamination, and issue a warning. Retail labeling would help consumers

only if they remembered the country of origin or still had the produce, or if

the produce were still in the store.

Finally, according to nationwide surveys sponsored by the fresh produce

industry, between 74 and 83 percent of consumers favor mandatory

country-of-origin labeling for fresh produce, although they rated

information on freshness, nutrition, and handling and storage as more

important.3

 Most consumers also prefer to buy domestic produce if price,

taste, and appearance are equal. In addition, survey responses show that

consumers believe that U.S. produce is safer than imported produce;

however, officials from the U.S. Department of Agriculture, the Food and

Drug Administration, and the Centers for Disease Control and Prevention

told us that sufficient data are not available to make this determination.

Background The Tariff Act of 1930, as amended, generally requires imported

articles—such as clothing, appliances, and canned and frozen goods—to

be marked by country of origin. Under the statute, however, certain

articles, including fresh produce, are not required to be marked

individually. For these items, the container holding the article must be

marked by the country of origin. U.S. Customs Service rulings provide that

when fresh produce is taken out of its container and put into an open bin

3

Based on nationally representative samples of U.S. households: Three surveys were conducted

between 1990 and 1998 by Vance Publishing Corporation for The Packer newspaper and were

published in its annual supplement, Fresh Trends and one survey was conducted by the Charlton

Research Group in 1996 for the Desert Grape Growers League. For the data we included in our report,

we obtained frequency counts, survey instruments, and other documents, in order to review the

wording of questions, sampling, mode of administration, research strategies, and the effects of

sponsorship. We used only the data that we judged to be reliable and valid.

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or display rack, there is no obligation to identify the items by the country

of origin.4

Three states—Florida, Maine, and Texas—have enacted country-of-origin

labeling laws for fresh produce. Florida requires all imported fresh

produce to be identified by the country-of-origin by, for example, marking

each produce item or placing a sign or label adjacent to the bin. Maine

requires country-of-origin labeling for fresh produce at the retail level

when it has been imported from countries identified as having specific

pesticide violations.5

 Texas requires country-of-origin labeling for fresh

grapefruit. In addition, labeling laws for fresh produce have been proposed

in at least five other states: California, Connecticut, Oregon, Rhode Island,

and Virginia.

Most large grocery stores carry over 200 produce items. Fresh produce is

often imported to fill seasonal needs when U.S. production is not sufficient

to cover demand or to satisfy the demand for tropical fruits not normally

grown in the United States. Two-thirds of imported fresh produce arrives

between December and April, when U.S. production is low and limited to

the southern portions of the country. The majority of these imports are

warm-season vegetables like peppers, squash, and cucumbers, although

some imports, such as tomatoes, occur year round.

Total U.S. consumption of fresh produce has increased 43 percent since

1980, from about 56 billion pounds to nearly 80 billion pounds in 1997, the

latest year for which the U.S. Department of Agriculture (USDA) has

compiled such data. During this same period, the amount of fresh produce

the United States imported more than doubled—from 7.5 billion pounds to

16 billion pounds. The domestic share increased by one third—from about

48 billion to about 64 billion pounds.

In 1997, most imported produce came from Mexico, Canada, and Chile, as

shown in figure 1.

4

U.S. Customs ruling HRL 722992. This ruling was interpreted in Customs ruling HRL 733798 not to

require marking because open bins or display racks were not determined to constitute ‘containers.’

5

Maine also requires packages of Maine apples to state that they are from Maine and potatoes

packaged in Maine to be labeled as to their country-of-origin.

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Figure 1: Source of Fresh and Frozen

Imported Produce, 1997, by Dollar

Value 2%

Guatemala

•

3%

Netherlands

• 4%

Costa Rica

12%•

Chile

13%•

Other

15%•

Canada

51%•

Mexico

Source: GAO’s analysis of data from USDA’s Economic Research Service.

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The United States is also the world’s largest exporter of fresh produce,

valued at $2.9 billion in 1998. Three-fourths of exported U.S. produce goes

to Canada, the European Union, Japan, Hong Kong, and Mexico.6

Uncertainties Exist

About the Costs

Associated With

Compliance and

Enforcement

Complying with mandatory country-of-origin labeling for fresh produce

could change the way retailers and others involved in the production and

distribution of produce do business, thereby affecting their costs and

consumers’ choices. Furthermore, such a law could be difficult to enforce.

Magnitude of Compliance

Costs and the

Responsibility for These

Costs Are Uncertain

The fresh produce industry and retailers will have to incur costs to comply

with a mandatory country-of-origin labeling law. The additional efforts and

associated costs for compliance would depend on the specific

requirements of the law and the extent to which current practices would

have to be changed. For example, some produce is already labeled with a

brand sticker. In these cases, compliance would require adding the name

of the country to the sticker. For unlabeled produce, the additional effort

would be more significant.

Associations we spoke with representing grocery retailers are particularly

concerned that a labeling law would be unduly burdensome for a number

of reasons. First, retailers would have to display the same produce items

from different countries separately if each individual item is not marked,

which in some cases would result in only partially filled bins. According to

these retailers, consumers are less likely to buy from such bins because

they are less appealing, causing the retailers to lose sales. Second, retailers

report that they do not have sufficient display space to separate produce

and still stock all the different varieties consumers want. Large grocery

stores usually carry over 200 produce items. Third, because the country of

origin of retailers’ produce shipments may vary each week, retailers would

incur costs to change store signs and labels to reflect the origins of the

different shipments. According to the Food Marketing Institute, an

association representing grocery retailers, it would take about 2 staff

hours per store per week to ensure that imported produce is properly

labeled. Costs would also be incurred if retailers were required to maintain

paperwork at each store as evidence of the origin of these multiple

6

The European Union is composed of Austria, Belgium, Denmark, Finland, France, Germany, Greece,

Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

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shipments. Florida does not require its retail stores to maintain paperwork

documenting the country of origin.

It is unclear who would bear the burden of compliance. A law requiring

retailers to ensure that produce is properly labeled would initially place at

least some of the compliance costs on retailers. However, retailers would

not necessarily bear all these costs. Retailers could raise prices to pass

their costs to consumers. However, if consumers reduce their purchases of

fresh produce in response, retailers will absorb part of the cost through

lower sales volume. For produce that does not have close substitutes, and

for which consumer demand is relatively insensitive to price changes,

retailers are likely to be more successful in passing costs on to consumers

through price increases without experiencing significant declines in sales

volume.

Retailers may decide to require their suppliers to either package produce

or label individual produce items. If retailers can impose this requirement

without paying more for the same quantity and quality, they will have

shifted the labeling costs to their suppliers. Consumer responses may also

influence the eventual effect of a country-of-origin law. If consumers

prefer domestic produce, they may buy more domestic and less imported

produce, which would allow domestic producers to gain market share

and/or raise their prices. However, if foreign countries respond by

imposing their own labeling requirements, and if this resulted in foreign

consumers’ buying less U.S. produce, then U.S. exports could suffer.

It is also possible that a country-of-origin labeling requirement would

result in fewer choices for consumers. This would occur if retailers decide

to stock more prepackaged produce, which would already be labeled, and

fewer bulk items, which would have to be labeled. Furthermore, if a law

required labeling for imported produce only, retailers could decide to

stock fewer imported produce items in order to avoid the compliance

burden.

An additional cost would be borne by restaurants and other food service

providers if the labeling law applies to them. They would have to let their

customers know the country of origin of the produce they use, which

could involve, for example, changing information on menus each time the

source of the produce changed. According to the National Restaurant

Association, the cost of changing menus would be “prohibitive.”

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Federal Agencies Would

Need Enforcement

Resources for an

Inherently Difficult Task

According to Food and Drug Administration (FDA) and USDA officials we

spoke with, enforcing a labeling law would require significant additional

resources. The agency enforcing such a law would have to implement a

system to ensure that the identity of produce is maintained throughout the

distribution chain. While inspectors could ensure that retailers have signs

or labels in place and could review documentation—if it were

available—they might not be able to determine from a visual inspection

that produce in a particular bin was from the country designated on the

sign or label. Such documentation is often unavailable at the retail store.

It is also unclear who would be responsible for these inspections. Grocery

store inspections for compliance with federal health and safety laws are

now generally conducted by state and local officials, often under

memorandums of understanding with the Food and Drug Administration.

USDA officials pointed out that if state and local governments were to carry

out the inspections required by a federal country-of-origin labeling law,

such a law would have to specify the states’ enforcement role and provide

funding for enforcement activities.

In commenting on a Senate amendment to the fiscal year 1999

appropriations bill regarding country-of-origin labeling, FDA expressed

“reservations about its priority as a public health issue, its cost to

administer, and [FDA’s] ability to enforce it.” FDA further noted that the

cost of enforcement “would be significant,” and “it is unclear that

enforcement would even be possible.” Among other enforcement

problems, FDA cited the need for accompanying paperwork to verify

country-of-origin labels and said this would place “an enormous burden”

on industry. FDA estimated that the federal cost for 1-year’s monitoring

under this proposed amendment would be about $56 million.

The three states that have labeling laws vary in their degree of

enforcement. In Florida, which has a mandatory labeling law for all

imported produce, enforcement occurs during the course of routine state

health inspections that are conducted about twice each year in every

store. During the routine inspections, officials check the shipping boxes

and packages in the store against the display signs or labels—a task they

estimate requires about 15 minutes per visit. However, they said they

sometimes have no reliable means to verify the accuracy of these signs

and labels. When violations are found, Florida officials said that it takes 5

minutes to process paperwork for new violations and 30 minutes for

repeat violations. Figure 2 shows produce labeled in Florida grocery

stores.

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Figure 2: Labeled Produce in Florida Grocery Stores

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According to the Inspection Manager for Maine’s Department of

Agriculture, Maine does not enforce its country-of-origin labeling

requirements because the list of countries to be identified keeps changing

and paperwork to verify the country of origin is often unavailable. In

Texas, the labeling law applies only to grapefruit. According to a Texas

Department of Agriculture official, grapefruit is rarely imported into

Texas, and the labeling law is not currently being enforced.

A Labeling Law Could

Have Trade

Implications

Depending on what it might require and how it might be implemented, a

law mandating country-of-origin labeling for fresh produce could have

adverse trade implications. U.S. trading partners might challenge the law’s

consistency with international trade obligations or take steps to increase

their own country-of-origin labeling requirements. Moreover, according to

USDA officials, enacting a labeling law could make it more difficult for the

United States to oppose foreign countries’ labeling requirements that it

finds objectionable.

Any labeling law would need to be consistent with U.S. international trade

obligations in order to withstand potential challenges from U.S. trading

partners. International trade rules that the United States has agreed to,

such as those embodied in the World Trade Organization (WTO) and the

North American Free Trade Agreement (NAFTA), permit country-of-origin

labeling.7

 For example, WTO provisions recognize the need to protect

consumers from inaccurate information while minimizing the difficulties

and inconveniences labeling measures may cause to commerce. WTO rules

require, among other things, that the labeling of imported products must

not result in serious damage to the product, a material reduction in its

value, or an unreasonable increase in its cost.8

 Correspondence from the

Office of the U.S. Trade Representative (USTR) stated that our trading

partners could raise concerns that country-of-origin labeling requirements

adversely affect their exports by raising costs.

Similarly, NAFTA requires that any country-of-origin marking requirement

must be applied in a manner that would minimize difficulties, costs, and

7

The WTO was established in 1995, as a result of the Uruguay Round of the General Agreement on

Tariffs and Trade (1986-94). WTO facilitates the implementation, administration, and operation of

multiple agreements that govern trade among its member countries. NAFTA is a multilateral trade

agreement that contains obligations governing trade among Canada, Mexico, and the United States.

NAFTA negotiations began in 1991 and the agreement entered into force in 1994.

8

In addition, country-of-origin labeling is covered as a technical regulation subject to the WTO

Agreement on Technical Barriers to Trade. This agreement provides guidelines for developing and

applying technical regulations.

Page 10 GAO/RCED-99-112 Country-of-Origin Labeling
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inconveniences to a country’s commerce. USTR and Department of State

officials stated that Mexico requested consultations to discuss its concerns

that one recently proposed U.S. country-of-origin labeling bill would

violate certain NAFTA provisions on country-of-origin marking.

USDA officials and food industry representatives expressed concern that

mandatory country-of-origin labeling at the retail level could be viewed as

a trade barrier and might lead to actions that could hurt U.S. exports. For

example, a country currently exporting produce to the United States may

be concerned about additional costs if its exporters are required to label

loose produce. Such a country could respond by enacting or more strictly

enforcing retail labeling laws that could hinder U.S. exports. The officials

were also concerned that adopting mandatory country-of-origin labeling at

the retail level could complicate U.S. efforts to address other countries’

labeling laws that the United States found objectionable. According to

USDA officials, the United States has opposed certain country-of-origin

labeling in other countries for various reasons, including concerns about

the potential of those laws to raise the costs of U.S. exports and

discourage consumers from purchasing imported goods.

While U.S. representatives have worked informally and cooperatively to

oppose certain foreign country-of-origin labeling requirements, the United

States has not formally challenged any such requirements within the WTO.

WTO officials said they were unaware of any formal challenges to any

country’s country-of-origin labeling requirement. However, USDA and WTO

officials agreed that the absence of any formal challenge does not

necessarily indicate that existing country-of-origin labeling requirements

are consistent with WTO rules. Moreover, the absence of formal challenges

to existing laws does not preclude these laws from being challenged in the

future. Finally, because the United States is such a large importer and

exporter of fresh produce, officials with USDA and the Department of State

pointed out that a U.S. labeling law is more likely to be formally

challenged than are other countries’ laws.

In February and March 1999, we surveyed U.S. embassy agricultural

attachés in 45 countries with which the United States exports and imports

agricultural products to determine which countries have and enforce

country-of-origin labeling requirements for fresh produce at the retail

level. Our survey included 28 countries that account for most of the U.S.

produce imports and exports and 17 countries that USDA identified as

having produce labeling requirements.9

 Of the 28 countries, 13 (46 percent)

9

USDA surveyed these countries in 1998.

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require country-of-origin labeling for bulk produce at the retail level, and

15 require such labeling for packaged produce.10 Attachés in these

countries reported the countries with requirements generally have a high

level of compliance and moderate to high levels of enforcement.11

Appendix I identifies the U.S. trading partners that require

country-of-origin labeling for fresh produce and the scope of their

requirements.

Labeling Would

Provide Limited

Benefits in

Responding to

Outbreaks of

Foodborne Illnesses

Considerable time—several weeks or months—generally passes between

the outbreak of a produce-related illness, the identification of the cause,

and a warning to the public about the risks of eating a specific produce

item, according to the Centers for Disease Control and Prevention (CDC)

and FDA officials. By the time a warning is issued, country-of-origin

labeling would benefit consumers only if they remembered the country of

origin or still had the produce, or if the produce were still in the store.

Consequently, country-of-origin labeling would be of limited value in

helping consumers respond to a warning of an outbreak.

Several factors contribute to the delays in identifying causes of foodborne

illness, including how quickly consumers become ill after purchasing and

eating the food and whether they seek medical attention. State and local

agencies report known or suspected foodborne illnesses to CDC, which

uses this information to identify patterns of related

illnesses—outbreaks—and to work with state, local, and FDA officials to

identify the source. Once the source is identified, state and local public

health officials generally issue a warning to the public if the product is still

available in the marketplace.

In most cases of foodborne illness, however, officials are not able to

identify the specific point at which the food associated with the outbreak

became contaminated. Between 1990 and 1998, CDC identified 98 outbreaks

of foodborne illnesses linked to fresh produce. In 86 of these cases, the

point of contamination was never identified. The remaining 12 cases were

traced to contamination in food handling and to seed that was

contaminated. Appendix II provides information on outbreaks of illnesses

related to contaminated fresh produce since 1990.

10The European Union (EU) has a single requirement for labeling of both loose and packaged produce

that applies to all 15 EU member countries. Our 28 largest produce trading partners include 6 EU

member countries.

11Although the EU has a single labeling requirement for all 15 member countries, we surveyed these

countries individually to obtain a better understanding of compliance and enforcement with the

labeling requirement.

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Because of the time needed to identify the cause of an outbreak,

country-of-origin labeling would not generally be useful in preventing

more consumers from becoming ill. For example, when

cyclospora-contaminated raspberries from Guatemala caused outbreaks of

illnesses in 1996 and 1997, many individuals did not become ill until a

week or more after they ate the fruit.

CDC officials said that country-of-origin labeling might be a starting point in

tracing the source of contamination if a person who had eaten a

contaminated product remembered the source for that product. However,

they said that more detailed information identifying every step from farm

to table—for both domestically grown and imported produce—would be

of greater use in tracing the source of an outbreak and identifying the

practices that resulted in the contamination. Identifying such practices

may enable officials to devise control measures that could be used

throughout the industry to decrease the potential for additional illnesses.

CDC officials also pointed out that a country-of-origin labeling law would

be more useful to them if it required retailers to keep better records,

including invoices and shipping documents. Such records would allow

investigators to identify the source of produce that was in grocery stores

at a particular time in the past.

Finally, FDA and CDC officials observed that a law exempting food service

establishments from country-of-origin labeling would be of limited value

because many identified outbreaks have been traced to food served in

restaurants or at catered meals. U.S. consumers are eating more meals,

including more fresh produce, outside the home. Indeed, a significant

portion of the illnesses that were traced to Guatemalan raspberries were

contracted from meals eaten outside the home.

Although Consumers

Favor Labeling, Other

Information Is More

Important to Them

Surveys representing households nationwide, sponsored by the produce

industry between 1990 and 1998, showed that between 74 and 83 percent

of consumers favor mandatory country-of-origin labeling for fresh produce

at the retail level.12 However, when asked to rate the importance of several

types of labeling information, households reported information on

freshness as most important, followed by information on nutrition, storage

12Surveys conducted for The Packer newspaper in 1990, 1992, and 1998 and for the Desert Grape

Growers League in 1996. For the data we included in our report, we obtained frequency counts, survey

instruments, and other documents, in order to review question wording, sampling, mode of

administration, research strategies, and the effects of sponsorship. We only used data that we judged

to be reliable and valid.

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and handling, and preparation tips. Information on country-of-origin was

ranked fifth, as shown in figure 3.13

Figure 3: Importance of Different Types of Produce-Labeling Information to Consumers

Source: GAO’s analysis of 1996 survey data collected for The Packer, a publication of the fresh

produce industry.

In addition, most consumers would prefer to buy U.S. produce if all other

factors—price, taste and appearance—were equal.14 And, about half of all

consumers would be willing to pay “a little more to get U.S. produce.”15

However, the survey did not specify the additional amount that consumers

would be willing to pay.

13Survey conducted for The Packer newspaper in 1996.

14Survey conducted for the Desert Grape Growers League in 1996.

15Survey conducted for the Desert Grape Growers League in 1996.

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Furthermore, according to a 1998 industry-sponsored nationwide survey,

70 percent of consumers believe that domestically grown produce is

safer.16 In the same survey, about half of consumers reported having

concerns about health and safety and growing conditions, and about

one-third had concerns with cleanliness and handling when buying

imported produce. Despite these concerns, officials with USDA, CDC, and

FDA, told us that sufficient data are not available to compare the safety of

domestic and imported produce. However, CDC officials told us that, in the

absence of specific food production controls, the potential for

contaminated produce increases where poor sanitary conditions and

polluted water are more prevalent.

In addition, Consumers Union—a nationally recognized consumer

group—used data collected by USDA’s Agricultural Marketing Service to

compare the extent to which multiple pesticide residues were found in

selected domestic and imported fresh produce.17 For its analysis,

Consumers Union developed a toxicity index, which it used to compare

the pesticide residues. According to this analysis, pesticide residues on

imported peaches, winter squash, apples, and green beans had lower

toxicity levels than those found on their domestically grown counterparts.

In contrast, the pesticide residues on domestically grown tomatoes and

grapes were less toxic than their imported counterparts. The study

acknowledges that almost all of the pesticide residues on the samples

were within the tolerance levels allowed by the Environmental Protection

Agency (EPA). We did not independently determine the validity of the

toxicity index developed by Consumers Union or verify its analysis or

results. However, according to FDA officials, pesticide residues present a

lower health risk than the disease-causing bacteria that can be found on

food.

Agency Comments

and Our Response

We provided the departments of Agriculture and State, Office of the U.S.

Trade Representative, CDC, U.S. Customs Service, EPA, and FDA with a draft

of this report for their review and comment. These agencies generally

agreed with the facts presented in the report and provided technical

comments, which we incorporated as appropriate. Officials commenting

on the report included the Deputy Administrator, Fruit and Vegetable

Programs, Agricultural Marketing Service, USDA; the

16Survey conducted for The Packer newspaper. Twenty percent said U.S. produce was about the same,

3 percent—worse, and 6 percent—don’t know.

17Do You Know What You Are Eating? An Analysis of U.S. Government Data on Pesticide Residues in

Foods, Consumers Union, Feb. 1999.

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Economic/Commercial Officer in the Agricultural Trade Policy Division,

Department of State; the Director of Agricultural Affairs and Technical

Barriers to Trade, Office of the U.S. Trade Representative; the Director of

Food Safety Initiative Activities, Division of Bacterial and Mycotic

Diseases, National Center for Infectious Diseases, CDC; a Senior Attorney,

Office of Regulations and Rulings, U.S. Customs Service; the Interim

Associate Commissioner for Legislative Affairs, FDA.

We performed our review from November 1998 through March 1999 in

accordance with generally accepted government auditing standards. Our

scope and methodology are discussed in appendix III.

Copies of this report will be sent to Senator Richard Lugar, Chairman, and

Senator Tom Harkin, Ranking Minority Member, Senate Committee on

Agriculture, Nutrition, and Forestry; and Representative Larry Combest,

Chairman, and Representative Charles Stenholm, Ranking Minority

Member, House Committee on Agriculture. We are also sending copies to

the Honorable Dan Glickman, Secretary of Agriculture; the Honorable

Madeleine Korbel Albright, Secretary of State; the Honorable Jane Henney,

M.D., Commissioner, Food and Drug Administration; the Honorable

Jeffrey P. Koplan, M.D., Director, Centers for Disease Control and

Prevention; the Honorable Raymond W. Kelly, Commissioner of the U.S.

Customs Service; the Honorable Jacob J. Lew, Office of Management and

Budget; and Ambassador Charlene Barshefsky, the U.S. Trade

Representative. We will also make copies available to others upon request.

If you would like more information on this report, please contact me at

(202) 512-5138. Major contributors to this report are listed in appendix IV.

Robert E. Robertson

Associate Director, Food

 and Agriculture Issues

Page 16 GAO/RCED-99-112 Country-of-Origin Labeling
Page 17 GAO/RCED-99-112 Country-of-Origin Labeling
Contents

Letter 1

Appendix I 

U.S. Trading Partners

That Require

Country-Of-Origin

Labeling for Fresh

Produce and the

Scope of Their

Requirements

20

Appendix II 

Information on

Outbreaks of Illnesses

Related to Fresh

Produce

23

Appendix III 

Objectives, Scope,

and Methodology

28

Appendix IV 

Major Contributors to

This Report

31

Tables Table I.1: Trading Partner Countries’ Requirements for

Country-of-Origin Labeling of Fresh Produce at the Retail Level

20

Table II.1: Outbreaks Associated With Fresh Produce in the

United States Reported to CDC, 1990-98

23

Figures Figure 1: Source of Fresh and Frozen Imported Produce, 1997, by

dollar value

5

Figure 2: Labeled Produce in Florida Grocery Stores 9

Page 18 GAO/RCED-99-112 Country-of-Origin Labeling
Contents

Figure 3: Importance of Different Types of Produce-Labeling

Information to Consumers

14

Abbreviations

CDC Centers for Disease Control and Prevention

EPA Environmental Protection Agency

EU European Union

FDA Food and Drug Administration

NAFTA North America Free Trade Agreement

USDA U.S. Department of Agriculture

WTO World Trade Organization

Page 19 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix I 

U.S. Trading Partners That Require

Country-Of-Origin Labeling for Fresh

Produce and the Scope of Their

Requirements

This appendix identifies the U.S. trading partners that have

country-of-origin labeling requirements for fresh produce at the retail

level, the nature and scope of these requirements, and the record of U.S.

challenges to those requirements.

Table I.1 identifies U.S. trading partner countries, their requirements for

loose or packaged fresh produce to be labeled at the retail level, and the

degree of compliance and enforcement with those requirements. This

information is based on our survey of U.S. agricultural attachés for 45

countries. Of the 45 countries, 28 account for most of U.S. trade in

produce. We also surveyed the 17 countries that were not among the

largest produce trading partners but were identified in the Foreign

Agricultural Service’s 1998 Foreign Country of Origin Labeling Survey as

having produce labeling requirements. As the table indicates, 13 of the 28

major produce trading partners require country-of-origin labeling for loose

produce at the retail level, and 15 require labeling for packaged produce.

Attachés reported that these countries generally have a high level of

compliance and a moderate to high level of enforcement.

Officials of the World Trade Organization, the departments of Agriculture

and State, the Office of the U.S. Trade Representative, and U.S.

agricultural attaches were not able to identify any formal U.S. challenges

to country-of-origin labeling requirements for fresh produce.

Table I.1: Trading Partner Countries’ Requirements for Country-Of-Origin Labeling of Fresh Produce at the Retail Level

Country

Scope of labeling

requirement

Degree of

compliance

Degree of

enforcement

Major produce trading partners (28)

Argentina No requirement

Australia Loose and packaged a a

Brazil Packaged High Moderate

Canada Looseb and packaged High High

Chile No requirement

Costa Rica Packaged High Moderate

Dominican Republic No requirement

European Union Loose and packaged

Belgium Very high Moderate

France Very high Very high

Luxembourg Very high Moderate

Netherlands High High

Spain High High

(continued)

Page 20 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix I 

U.S. Trading Partners That Require

Country-Of-Origin Labeling for Fresh

Produce and the Scope of Their

Requirements

Country

Scope of labeling

requirement

Degree of

compliance

Degree of

enforcement

United Kingdom Very high Very high

Guatemala No requirement

Honduras No requirement

Hong Kong No requirement

Indonesia No requirement

Japan Loose and packagedc High High

Malaysia No requirement

Mexico Loose and packaged High Moderate

New Zealand No requirement

Peru Loose and packaged High Moderate

Philippines No requirement

Republic of Korea Loose and packaged High High

Republic of South Africa Loose and packaged Moderate Moderate

Singapore No requirement

Taiwan No requirement

Thailand No requirement

Other countries surveyed (17)

Czech Republic Packaged High Moderate

Egypt Loose and packaged High Very high

European Union Loose and packaged

Austria Very high Very high

Denmark Very high Moderate

Finland High Moderate

Germany High High

Greece Very high Very high

Ireland Very high Very high

Italy High High

Portugal High High

Sweden High Moderate

Hungary Loose and packaged a Moderate

Israel No requirement

Russia Loose and packaged Moderate Moderate

Switzerland Loose and packaged Very high Very high

United Arab Emirates No requirement

Venezuela No requirement

(Table notes on next page)

Page 21 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix I 

U.S. Trading Partners That Require

Country-Of-Origin Labeling for Fresh

Produce and the Scope of Their

Requirements

Source: GAO survey

aAgricultural attaches were uncertain about this information.

bRequirements for labeling loose produce are provincial government requirements and do not

include all Canadian provinces.

cRequirements currently apply to broccoli, taro, garlic, ginger, wet shitake mushrooms, edible

burdock, asparagus, field peas, and onions. According to U.S. Department of Agriculture

correspondence, labeling of all produce at the retail level will be required in Japan beginning

April 1, 2000.

Note: The European Union requires country-of-origin labeling for loose and packaged fresh

produce.

Page 22 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix II 

Information on Outbreaks of Illnesses

Related to Fresh Produce

Table II.1 provides information on the 98 outbreaks of produce-related

illnesses that were identified between 1990 and 1998 by the Centers for

Disease Control and Prevention (CDC). Contamination may occur when

fresh produce is grown, harvested, washed, sorted, packed, transported, or

prepared. As the table shows, food safety officials could not identify the

source of the contamination in 86 of these cases. Food safety experts

believe that there is not sufficient information to assess the relative safety

of fresh produce from the United States and foreign countries.

Table II.1: Outbreaks Associated With Fresh Produce in the United States Reported to CDC, 1990-98

Year Country of origin

Implicateda

commodity Pathogen Cause of contamination

1998 United States (California) Alfalfa sprouts Salmonella Senftenberg Contaminated seed.

Unknown Mangos Salmonella Oranienberg Unknown.

Unknown Fruit salad E. coli O157:H7 Unknown.

United States Cabbage (cole slaw) E. coli O157:H7 Unknown; field

contamination suspected.

Unknown Lettuce E. coli O157:H7 Unknown.

United States or Canada Cabbage (cole slaw) E. coli O157:H7 Unknown; field

contamination suspected.

United States Alfalfa sprouts E. coli O157:H7 Contaminated seed.

United States Alfalfa sprouts Salmonella Havana;

Salmonella Cubana

Contaminated seed.

Mexico Parsley Shigella sonnei Unknown; wash water or

ice for packing

suspected.

1997 Unknown Melons or lemon bars E. coli O157:H7 Unknown; cross

contamination by food

handlers suspected.

United States

(Idaho)

Alfalfa sprouts E. coli O157:H7 Contaminated seed.

United States

(Kansas and Missouri)

Alfalfa sprouts Salmonella Infantis;

Salmonella Anatum

Contaminated seed.

Guatemala Raspberries Cyclospora cayetanensis Unknown; nonpotable

waterb may have been

used in pesticide spray

mix.

Unknown Mesclun lettuce (baby

lettuce)

Cyclospora cayetanensis Unknown.

Unknown Basil Cyclospora cayetanensis Unknown.

Unknown Lettuce salad Shigella sonnei Unknown; food handler

suspected.

United States Salad Salmonella Enteritidis Cross contamination

from turkey.

(continued)

Page 23 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix II 

Information on Outbreaks of Illnesses

Related to Fresh Produce

Year Country of origin

Implicateda

commodity Pathogen Cause of contamination

Unavailable Red cabbage in vinegar Unknown Unavailable.

1996 United States (California) Alfalfa sprouts Salmonella Montevideo;

Salmonella Meleagridis

Contaminated seed.

Unknown Lettuce E. coli O157:H7 Unknown.

Guatemala Raspberries and

blackberries

Cyclospora cayetanensis Unknown; nonpotable

waterb may have been

used in pesticide spray

mix.

United States (California) Mesclun mix

(baby lettuce mix)

E. coli O157:H7 Unknown; contamination

in the field suspected.

Unavailable Lettuce Unknown Unavailable.

Unavailable Salad Unknown Unavailable.

Unavailable Green salad Unknown Unavailable.

Unavailable Green salad Unknown Unavailable.

Unavailable Tossed salad Unknown Unavailable.

1996-95 Imported

(country-of-origin

unknown)

Alfalfa sprouts Salmonella Newport Contaminated seed.

1995 Unknown Salad or sandwich E. coli O157:H7 Unknown.

Unknown Caesar salad E. coli O157:H7 Unknown; food handler

suspected.

Unknown Unknown (produce

suspected)

Cyclospora cayetanensis Unknown.

Imported

(country-of-origin

unknown)

Alfalfa sprouts Salmonella Stanley Contaminated seed.

United States (Idaho) Romaine lettuce or red

cabbage

E. coli O157:H7 Cross contamination with

raw meat product during

preparation.

United States (Montana) Leaf lettuce E. coli O157:H7 Unknown; field

contamination likely but

unsanitary handling

practices at the grocery

store may have also

occurred.

United States Iceberg lettuce E. coli O157:H7 Cross contamination

from ground beef.

Unavailable Lettuce Norwalk-like virus Unavailable.

United States Salad Salmonella Enteritidis Contaminated by

asymptomatic food

handler.

Unavailable House salad Unknown Unavailable.

(continued)

Page 24 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix II 

Information on Outbreaks of Illnesses

Related to Fresh Produce

Year Country of origin

Implicateda

commodity Pathogen Cause of contamination

1994 Unknown Cole slaw or soup E. coli O157:H7 Unknown.

Unknown Potato salad E. coli O157:H7 Unknown.

Unknown Salad bar E. coli O157:H7 Unknown; cross

contamination with raw

ground beef suspected.

Unknown Lettuce E. coli O157:H7 Unknown; food handler

suspected.

Mexico Green onions Shigella flexneri 6 Unknown; contamination

at harvest suspected.

Unknown Fruit salad Campylobacter jejuni Unknown; cross

contamination suspected.

Unavailable Pineapple E. coli O11:H43 Unavailable.

Unknown Lettuce Salmonella Thompson Unknown; food handler

suspected.

Unavailable Salad bar Viral Unavailable.

Unavailable Tossed salad Unknown Unavailable.

Unavailable Greens (edible fern

fronds)

Unknown Unavailable.

Unavailable Strawberries Unknown Unavailable.

Unavailable Salad bar Unknown Unavailable.

Unavailable Spring salad Unknown Unavailable.

Unavailable Tossed salad Unknown Unavailable.

1993 United States (South

Carolina)

Tomatoes Salmonella Montevideo Unknown; wash water

suspected.

Unavailable Sliced watermelon Salmonella Javiana Unavailable.

Unknown Vegetable salad E. coli O157:H7 Unknown; cross

contamination suspected.

Unknown Salad bar, lettuce or

cheese

E. coli O157:H7 Unknown.

Unknown Cantaloupe from buffet E. coli O157:H7 Unknown; cross

contamination suspected.

United States Salad (carrots) Enterotoxigenic

E. coli (ETEC)

Unknown; contaminated

carrots suspected.

United States Tabouleh salad (carrots) Enterotoxigenic

E. coli (ETEC)

Unknown; contaminated

carrots suspected.

Unavailable Melon and strawberries Campylobacter jejuni Unavailable.

Unknown Carrot and celery sticks Hepatitis A Unknown; food handler

suspected.

Unknown Lettuce Salmonella

Heidelberg

Unknown; foodhandler or

cross contamination

suspected.

(continued)

Page 25 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix II 

Information on Outbreaks of Illnesses

Related to Fresh Produce

Year Country of origin

Implicateda

commodity Pathogen Cause of contamination

Unavailable Green salad Salmonella

Infantis

Unavailable.

Unavailable Muskmelon and

honeydew

Unknown Unavailable.

Unavailable Green beans or okra Unknown Unavailable.

1992 United States Vegetable E. coli O157:H7 Unknown; manure in

home garden suspected.

Unavailable Salad Unknown Unavailable.

Unavailable Tossed salad Unknown Unavailable.

Unavailable Tossed salad Unknown Unavailable.

Unavailable Fruit salad Unknown Unavailable.

Unavailable Green salad Unknown Unavailable.

1991 United States (Texas)

and Mexico

Cantaloupe Salmonella Poona Unknown; contamination

in field suspected.

Unavailable Salad bar Hepatitis A Unavailable.

Unavailable Fresh fruit Giardia lambia Unavailable.

United States (Florida) Watermelon Salmonella Javiana Unknown; improper

handling (temperature

abuse) suspected.

Unavailable Tossed salad Unknown Unavailable.

Unavailable Tossed salad Unknown Unavailable.

Unavailable Fruit Unknown Unavailable.

Unavailable Cantaloupe Unknown Unavailable.

Unavailable Spring salad Unknown Unavailable.

Unavailable Salad Unknown Unavailable.

1990 Central America and

Mexico

Cantaloupe Salmonella Chester Unknown; possible

contamination from ice

used in shipping.

Unknown Alfalfa sprouts Salmonella Anatum Unknown.

Unavailable Lettuce Hepatitis A Unavailable.

United States (South

Carolina)

Tomatoes Salmonella Javiana Unknown; wash water

suspected.

Unavailable Salad bar Giardia lambia Unavailable.

Unavailable Salad Salmonella Montevideo Unavailable.

Unknown Raw vegetables Giardia lambia Unknown.

Unavailable Salad bar Unknown Unavailable.

Unavailable Lettuce Unknown Unavailable.

Unavailable Lettuce salad Unknown Unavailable.

Unavailable Salad bar Unknown Unavailable.

Unavailable Tossed salad Unknown Unavailable.

(continued)

Page 26 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix II 

Information on Outbreaks of Illnesses

Related to Fresh Produce

Year Country of origin

Implicateda

commodity Pathogen Cause of contamination

Unavailable Lettuce Unknown Unavailable.

Unavailable Green salad Unknown Unavailable.

Unavailable Salad Unknown Unavailable.

Unavailable Fruit cup Unknown Unavailable.

Note: CDC obtains reports of outbreaks primarily from state and local health departments.

“Unavailable” describes information not reported to CDC. “Unknown” describes information that

CDC and state and local health departments did not determine.

aThe information implicating fresh produce as the source of contamination is not necessarily

conclusive for all of the outbreaks shown in the table.

bWater unsuitable for drinking.

Source: Preliminary data from CDC.

Page 27 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix III 

Objectives, Scope, and Methodology

As requested by the Senate and House conferees for the Omnibus

Consolidated and Emergency Supplemental Appropriations Act, 1999,18 we

reviewed a number of issues associated with the potential costs and

benefits of a mandatory labeling requirement. Specifically, this report

provides information on (1) the potential costs associated with

compliance and enforcement of a mandatory country-of-origin labeling

requirement at the retail level for fresh produce, (2) the potential trade

issues associated with such a requirement, (3) the potential impact of such

a requirement on the ability of the federal government and the public to

respond to outbreaks of illness caused by contaminated fresh produce,

and (4) consumers’ views of country-of-origin labeling. Finally, appendix I

identifies U.S. trading partners that have country-of-origin labeling

requirements for fresh produce, the nature and scope of those

requirements, and the record of U.S. challenges to those requirements.

To determine the potential costs associated with compliance and

enforcement, we interviewed officials and reviewed documents from

USDA’s Agricultural Marketing Service and the Foreign Agricultural Service;

the U.S. Customs Service; the Food and Drug Administration; and the

International Trade Commission. We also interviewed officials from the

Food Marketing Institute and the Florida Retail Federation and visited

several Florida groceries—both large chains and small independent

stores—to examine how imported produce is labeled and how inspections

are conducted. We interviewed officials from the United Fresh Fruit and

Vegetable Association; the Food Industry Trade Coalition, which included

representatives from the Food Distributors International, the National

Grocers Association, ConAgra, Inc., the Chilean Fresh Fruit Association,

the National Fisheries Institute, the Meat Importers Council of America

Inc., the American Food Institute, and the National Food Processors

Association; the Fresh Produce Association of the Americas; the Florida

Fruit and Vegetable Association; the Northwest Horticultural Council; the

Western Growers Association; and Chiquita Brands, Inc. To determine

compliance and enforcement with state labeling laws, we interviewed

officials from agricultural departments in Maine, Texas, and Florida.

To determine the potential trade implications, we reviewed documents

and interviewed officials from the Office of the U.S. Trade Representative,

the Foreign Agricultural Service, the Department of State, and the World

Trade Organization. We also examined international trade agreements.

18Conference Report 105-825 accompanied H.R. 4328, which became the Omnibus Consolidated and

Emergency Supplemental Appropriations Act, 1999 (P.L. 105-277, Oct. 21, 1998).

Page 28 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix III 

Objectives, Scope, and Methodology

To identify U.S. trading partners that have country-of-origin labeling

requirements for fresh produce, we reviewed the survey conducted by the

Foreign Agricultural Service, 1998 Foreign Country of Origin Labeling

Survey, February 4, 1998. In addition, we developed a questionnaire to

determine the nature and scope of other countries’ labeling requirements,

which the Service sent electronically to the U.S. embassy agricultural

attachés for 45 countries. Twenty-eight of the countries were selected

because they are the countries with whom we import or export significant

dollar volumes of fresh produce. The remaining 17 countries we surveyed

were included because they were identified as requiring country-of-origin

labeling in the Foreign Agricultural Service’s 1998 survey. We received

responses for 45 countries. The survey was conducted in February and

March 1999.

To determine the potential impact on the federal government’s and

consumers’ ability to respond to outbreaks of illness from fresh produce,

we interviewed officials and obtained documents from the CDC, FDA, the

U.S. Department of Agriculture, and Florida’s Department of Health. We

also discussed these issues with consumer groups.

To determine the potential impact of mandatory country-of-origin labeling

on consumers, we reviewed the Tariff Act of 1930 and related regulations

and rulings and discussed these issues with Customs officials. We also

examined documents and interviewed officials with consumer groups,

including the National Consumers League, the Center for Science in the

Public Interest, and the Safe Food Coalition. We also analyzed the results

of eight consumer surveys conducted from 1990 to 1998 to determine

consumer opinions regarding mandatory country-of-origin labeling. The

surveys were identified by industry experts and through literature

searches. For the data we included in our report, we obtained frequency

counts, survey instruments, and other documents, in order to review the

wording of questions, sampling, mode of administration, research

strategies, and the effects of sponsorship. We used only data that we

judged to be reliable and valid.

Five surveys, conducted between 1990 and 1998, represented households

nationwide that have purchased fresh produce in the past year. These

surveys were published by Vance Publishing Corporation for The Packer

newspaper and were published in its annual supplement, Fresh Trends.

Another nationwide survey was conducted by the Charlton Research

Group in 1996 for the Desert Grape Growers League. Two surveys of

Page 29 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix III 

Objectives, Scope, and Methodology

Florida consumers were conducted by the University of South Florida’s

Agriculture Institute in 1997 and the University of Florida in 1998.

We also spoke with officials and obtained documents from CDC, FDA, the

U.S. Department of Agriculture’s Agricultural Marketing Service, Florida’s

Department of Health, the Environmental Working Group, and Consumers

Union about the relative safety of imported and U.S. produce.

We conducted our review from November 1998 through March 1999 in

accordance with generally accepted government auditing standards.

Page 30 GAO/RCED-99-112 Country-of-Origin Labeling
Appendix IV 

Major Contributors to This Report

Erin Lansburgh, Assistant Director

Beverly A. Peterson, Evaluator-in-Charge

Daniel F. Alspaugh

Erin K. Barlow

Shirley Brothwell

Richard Burkard

Daniel E. Coates

Oliver Easterwood

Fran Featherston

Alice Feldesman

Paul Pansini

Carol Herrnstadt Shulman

Janice M. Turner

(150094) Page 31 GAO/RCED-99-112 Country-of-Origin Labeling
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