NATIONAL MEAT ASSOCIATION h 1970 Broadway, Suite 825, Oakland, CA 94612

(510) 763-1533 Fax (510) 763-6186 h Email Address: [email protected] h http://www.nmaonline.org

Edited by Jeremy Russell

November 6, 2000

LAST WEEK’S ADVISORY COMMITTEE MEETING

Opening last week’s Meat and Poultry Advisory committee meeting, Under Secretary for Food Safety Dr. Cathy Woteki noted that this was the last meeting of the committee as chartered, some of the members will be re-appointed and others refreshed. She noted the good work of the committee such as developing a concept paper for interstate shipment of state inspected product. She was pleased to see there were very few plant closings attributed to HACCP. NMA Executive Director Mucklow, a member of the Committee, asked for and was promised a copy of the survey from which this conclusion was drawn. Woteki noted that there is still a lot of work to be done to truly extend HACCP to slaughter lines, and that questions on enforcement remain. She also outlined the activities of the Council on Food Safety.

Sheila Novak, Esquire, from the Office of USDA General Counsel, updated the committee on Supreme v. USDA. In response to a question from Mucklow as to why it took four months to file an appeal and then follow it immediately with a request for an expedited hearing, she said that it is not a simple process to appeal.

Three subcommittees met on Tuesday evening and reported back to the full committee on Wednesday and their recommendations are probably the most substantive output of committee activity, since most of the other work is briefing by staff and questions from committee members. One subcommittee discussed the merit of sharing recall information with other federal and state agencies, and the conclusion is that it is a good idea so long as USDA develops a Memorandum of Understanding (MOU) or other such documents, that there are clear penalties for improper disclosure of proprietary information, and that such agreements are limited to those that can assist in recall verification activities.

Another subcommittee discussed what has become known as HACCP-Phase II. This was quite complex; committee recommendations ranged from improving the understanding of definitions and what is expected to clarifying the role and expectation of inspectors. The third committee discussed residue control in a HACCP environment. FSIS Administrator Tom Billy informed the full committee that the agency intends to hold a public meeting on residues on December 11 to initiate public discussion. The committee recommended that either the President’s Council on Food Safety or the National Academy of Sciences address the need for a coherent organization for the regulation of food animal drug and other chemical residues. An industry technical working group has worked on this issue for the last year, and the issue crosses many federal and state agencies which results in confusion about responsibilities. The committee also urged meaningful traceback, and suggested that Codex standards have a role to play also. Copies of the written reports of the three subcommittees are available from NMA on request. Full reports will be in the transcript of the proceedings.

In general, the business of the committee has worked quite well, and Mucklow commended Administrator Billy for the way in which it functions. On the second day, one of the consumer activist members passionately urged that there be more performance standards and decried what she perceived were industry efforts to “fight” HACCP and attack the Salmonella performance standard. Mucklow responded by pointing out that industry has supported HACCP strongly, but cannot support unscientific, fatally flawed performance standards. She repeated her willingness to meet with groups who hold other views to try to resolve differences.

TIME TO VOTE

Whether or not employers are required to give employees time off to vote is a question of state law, and it varies greatly from state to state. A page on the FEC web site (www.fec.gov/pages/faqvdayeprocedures.htm) provides a state-by-state comparison of election day specific laws, including whether or not employers must give time off to vote. This page also provides the answer to, perhaps, an even more important question: Are bars closed in my state on election day?

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CSPI PUSHES “INTEGRITY IN SCIENCE”

The Center for Science in the Public Interest has developed a new angle on an old critique and claimed itself as the arbitrator of scientific conflicts of interest. Dedicating a portion of its website to what it calls “Integrity in Science: A CSPI Project,” CSPI believes it can create a database of the links between scientists and industry. Says the website: “The Integrity in Science project seeks to safeguard the science and the public welfare from the corruptive effects of industry’s influence.” More scary than perhaps the thought that a mere database could locate or even rationally portray the complicated interplay of science and industry, is the thought that industry’s effect on science is necessarily corruptive. The project will attempt to display conflicts of interest, but it remains to be seen how discriminating or astute its analysis will actually be. You can visit the site at http://www.cspinet.org/integrity.

For a taste of what you’ll find there: “In matters related to food, health, and the environment, this project seeks to diminish that problem by, among other things: conducting research to identify conflicts of interest or competing interests, especially by scientists who are on important government and non-government advisory committees; publicizing facts about scientists with conflicts of interest; encouraging policy-makers, legislative bodies, universities, and scientific journals to seek greater balance on committees and to require full public disclosure of all conflicts of interests or competing interests; encouraging journalists to question scientists and others about possible conflicts of interests and inform the public about them; working with organizations, scientists, and journalists to make science more open; and by organizing and participating in symposia concerning all of the above.” The CSPI site does not mention that a peer review process aleady exists for the scientific community, perhaps because CSPI has not chosen to submit any of its scientific reports to the traditional process.

Despite CSPI’s firm belief that it can arbitrate integrity, not all agree. In fact, a parody website, The Center for Science NOT in the Public Interest, has been established attacking CSPI’s claims, philosophies and founders – http://www.cspinot.com/. CSPINOT is a site created by the Guest Choice Network, a coalition of more than 30,000 restaurant and tavern operators. “Are we biased?” asks Guest Choice Network, “You bet. The Center for Science in the Public Interest and its founder, Michael F. Jacobson, have been attacking our industry for more than two decades. We resent the junk science they use to make the attacks and the media condemnation that accompanies them.”

STATISTICS SHOW AMERICANS EATING OUT MORE

What the restaurant industry describes as ‘white tablecloth’ restaurants – with average tabs running $25 per person and up – were the fastest-growing part of the business early this year. Casual dining was sharply on the rise, too, as were takeout orders and purchases of prepared meals from groceries and supermarkets. Although fuel and other risisng costs may be cutting into consumer’s disposable incomes, Cattle Buyers Weekly noted on October 30 that it appears not to have caused cut backs on eating out. Steakhouse and hamburger chains are reporting solid profits in the third quarter despite higher beef costs. “We used to be perceived as the leisure part of the economy. But now, with people having less time, people are ordering carryout” as well as dining out, said Steven Anderson, president and CEO of the National Restaurant Association.

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ONLINE FOOD RETAILERS SUFFER

At a time when Internet companies are dropping like flies, many analysts think the growth in online grocers has only just begun, the Wall Street Journal reported November 3. Morgan Stanley Dean Witter of New York says the online-food business, after doubling this year, will more than double again in 2001, to $2.5 billion. The firm predicts that by 2004, the industry’s revenue will hit $17 billion, or 3% of all grocery sales nationwide. Forrester Research Inc., a market-research firm, estimates that Americans will spend $27.1 billion to buy, household and beauty supplies online by 2004. This may seem to herald a golden age, but in fact many online retailers are already at the gate of failure and may be unexpected players who take the limelight.

Webvan, for instance, has been called the most likely to succeed of the online grocers. “If someone is going to make online grocery delivery work, it will be them,” said an e-commerce analyst with Booz-Allen & Hamilton, “but they may not make it work.” In late October, Webvan stock plunged to new lows following the company’s announcement that quarterly losses had accelerated and that it had missed long-promised goals of profitability at its original Oakland warehouse. To survive Webvan is going to have to lower costs, improve service and open new facilities.

According to a report in Feedstuffs on October 23, “[Webvan’s] sales in the Bay Area were $23 million, consisting of 2,350 orders per day at an average order size of $105” but to break-even the company needs “between 3,300 and 3,500 orders at a $110 per order” average.

If firms like Webvan can’t make it, the demand for online grocery will still be there and remain unsatisfied. Consumers are drawn to the Internet not only to escape long grocery lines and traffic, but also for specialty food items not normally available in their geographical area. The vacuum created by the failure of the larger concerns could encourage smaller competitors to enter the arena with their unique items. On the other hand, if firms like Webvan survive what is proving to be a winter of discontent for the online food business, then there will still be some room for niche firms.

Even if the long-term profitability of Webvan’s business model is now in serious question, the food industry has arrived at the Internet age. The problem of shipping perishables remains a hurdle, however, even as it always has for mail order business. “Already, the industry is getting less-than-glowing report cards from Internet rating services, like Gomez.com,” reports the Journal. “Based on how e-tailers are serving shoppers, it gave only three of the nation’s top 10 online grocers a score of six or higher, on a scale of one to 10. And that’s down from last year.”

The challenge then is to continue to supply gourmet specialty products through the mail. The Wall Street Journal’s review of online food retailers showed that there is plenty of room to improve here. Not only were bacterial counts abnormally high in many cases, some products arrived spoiled, moldy or late. Other items that were ordered did not live up to their hype. However, the meat products that were reviewed by the Journal generally fared well. The filet mignon “came out juicy and tasty, after arriving frozen and individually vacuum-packed.” Omaha Steaks, who supplied the steaks, was however disappointed by the Journal’s bacterial count. Sausages were eaten “happily” and the bacon was a “perfect complement” for scrambled eggs (both products from Virginia Traditions).

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GLICKMAN WRITES Wall Street Journal

Secretary of Agriculture Dan Glickman responded to last week’s Wall Street Journal editorial, “Clean, Green and Secret,” which criticized the Salmonella performance standard and praised the Texas Litigation’s success. Glickman claimed for USDA’s new science-based system all of the credit for recent reductions in Salmonella and complained that the editorial had not cited a single piece of data, without himself citing a single piece of data.

LAMB PROCESSOR LOANS

USDA’s Rural Business Cooperative Service (RBS) published in the Federal Register on October 30 an Interim Rule on a lamb processors industry loan program. The program would make $15 million available to processors in FY2001 and is part of the $100 million Section 201 lamb trade relief package. The rule amends RBS regulations for Business and Industry Loans "to establish a three-year set aside of a portion of its Business and Industry (B&I) Guaranteed Loan Program funds to finance real estate purchases and improvements, working capital, debt refinancing, and equipment in domestic lamb packing and processing plants."

SUPREME BEEF UPDATE

The attorney representing the combined Chapter 11 bankruptcy cases for Supreme Beef Processors Inc and its packaging operations, Supreme Beef Packers Inc, told SEAFAX the company is still working toward re-opening at a Palestine, TX location, SEAFAX reported in its Agri-Wire. The lawyer stated discussions are ongoing with lending institutions to provide a financing package for the purchase of a new building. Although the attorney seemed optimistic about those talks, Supreme Beef Processors is still not operating at this time.

VOTE

Your vote matters; do not fail to use it. The American Land Rights Association posted the reminders in its fax alert.

1645 – one vote gave Oliver Cromwell control of England;

1694 – one vote caused Charles I of England to be executed;

1776 – one vote gave America the English language, instead of German;

1839 – one vote elected Marcus Morton, Governor of Massachusetts;

1845 – one vote brought Texas into the Union;

1868 – one vote saves President Andrew Johnson from impeachment;

1876 – one vote changed France from a monarchy to a republic; and

1923 – one vote gave Adolph Hitler leadership of the Nazi Party.

NATIONAL MEAT ASSOCIATION

NMA - East: 1400 - 16th St. N.W., Suite 400, Washington D.C. 20036 Ph. (202) 667-2108

NMA - West: 1970 Broadway, Suite 825, Oakland, CA 94612 Ph. (510) 763-1533 Fax (510) 763-6186

Edited by Jeremy Russell

November 6, 2000

FSIS ISSUES REVISED LM DIRECTIVE

FSIS has revised its Directive (10,240.2) dealing with micro-testing of ready-to-eat (RTE) products, such as testing for Listeria monocytogenes (L.m). Effective December 1, the Directive clarifies how the FSIS in-plant inspector will draw samples and how FSIS will respond to positive findings in RTE products. The revised Directive also states that FSIS will test all RTE products, except commercially sterile, for multiple pathogens including Salmonella and Listeria monocytogenes. However, establishments conducting either microbial testing of finished-products or environmental sampling as prescribed by the Directive will not be sampled by FSIS.

In-plant inspection must provide the establishment with meaningful notice of the sample collection so as to allow the establishment sufficient time to hold the sampled lot. In-plant inspection must also draw samples from the current day's production which has completed the pre-shipment HACCP records review.

In the event of a positive finding by FSIS, the Inspector-In Charge (IIC) will, upon instruction from the District Office, issue a non-complaince record (NR). This will prompt an 02 procedure and review of the HACCP and SSOP plans and records from the relevant date to the present. The IIC will then verify the establishment has taken necessary corrective and preventive actions. The District will determine whether any additional enforcement action is necessary.

FSIS will not issue an NR in response to a positive finding by the establishment (or its customer) on either finished-products testing or environmental sampling so long as the establishment takes the appropriate corrective/preventive actions in light of the finding. This may include a recall and/or reassessment of the HACCP plan.

Unfortunately, the Directive's requirement relating to product testing for L.m following a positive product contact result for Listeria spp., is unclear. As written, it would appear the Directive requires finished product testing after every single positive contact surface finding. FSIS Administrator, Mr. Billy, and Deputy Administrator for Policy, Mr. Derfler, both stated at an industry briefing that there is not a one-to-one requirement. The frequency of such targeted testing is to be determined by the establishment. Thus, it remains our understanding that an occasional positive for an indicator organism, even on product contact surfaces, will not automatically implicate product

For a complete copy of the Revised Directive and Olsson, Frank, and Weeda memorandum, send a self-addressed, stamped (33¢) envelope to Jeremy Russell at NMA-West.

JACK’S FOOD SAFETY AWARD

Jack in the Box Inc. received on October 17 the state of California's inaugural award for "outstanding leadership in food safety" from the Food and Drug Branch of the California Department of Health Services.

The award, presented Oct. 17 in Sacramento, salutes Jack in the Box Inc. for its efforts to help the state of California adopt the uniform food-safety standards put forth by the federal Food and Drug Administration (FDA). The award also recognizes the company for helping the state draft a 1997 law requiring all restaurants to cook meat and eggs at specified temperatures to

ensure safety.

Page 2

FOOD TIE-IN TOY RECALLS CAUSE STIR

Last year the food industry saw several toy recalls. The largest was a Burger King recall of Pokemon eggs that were suffocating infants. The U.S. Consumer Product Safety Commission (CPSC) announced last week that it would be holding a conference concerning hazards associated with toy premiums and the responsibilities of firms that manufacture or distribute there products. That means Happy Meals. The meeting will be held January 9, 2001 in Washington, DC. For more information contact CPSC at (301) 504-0684. Register online by December 1 at http://www.cpsc.gov/.

FIFTEEN MINUTES OF ‘FAIM’

FSIS announced November 1 that it had completed the first phase of the nationwide implementation of the Field Automation and Information Management (FAIM) initiative. The program was initiated in 1996 to enhance productivity, quality, and services for both inspection and administrative processes conducted in meat and poultry establishments. The agency says its FAIM program has analyzed the inspection and business practices of the agency and systematically applied automation to those processes to improve productivity, inspection effectiveness, and service to the meat and poultry industry. Inspectors now have immediate access to, and ability to retrieve information from, FSIS technical references, directives, manuals, and notices that are stored on each inspector’s computer. This has eliminated the need for inspectors to file and search through thousands of paper documents. The FAIM project was recognized by the Chief Information Officer Council in its "Best IT Practices in the Federal Government" report and its Performance-Based Inspection System software helped it earn a Computer World Smithsonian Award.

FDA HEALTH-CLAIM LABELING

The Food and Drug Administration (FDA) has authorized the use of a new health claim in labeling eligible foods. Under the provisions of the Food and Drug Administration Modernization Act of 1997 (FDAMA), a manufacturer may submit to the Food and Drug Administration (FDA) a notification of a health claim. This health claim notification is based on an authoritative statement from an appropriate scientific body of the United States Government or the National Academy of Sciences (NAS) or any of its subdivisions. If FDA does not act to prohibit or modify such a claim, the claim may be used 120 days after receipt of the notification. Under the provisions of FDAMA, when the claim is used, it must appear exactly as stated in the notification. The new claim states: "Diets containing foods that are good sources of potassium and low in sodium may reduce the risk of high blood pressure and stroke."

HIMP MARCHES ON

Although the future of the project remains dubious, FSIS published the performance standards for food safety and non-food safety conditions that it will apply in a limited number of young turkey and market hog slaughter plants that participate in the HACCP-based Inspection Models Project (HIMP). FSIS has already announced the performance standards for young chicken HIMP plants at public meetings, but including them in the Notice published in the Federal Register on November 2. For more information contact Michael Grasso, Project Manager, at (202) 205-0025 or e-mail [email protected]. For a copy of the Federal Register Notice, send a self-addressed, stamped (33¢) envelope to Jeremy Russell at NMA-West.