'An Absolutely Huge Job'

May 05, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

While the new nutrition labeling law may be a good deal for health-conscious consumers, it has cost food companies more than $1 billion to comply and has left many companies with useless inventories of containers and labels.

But some food processors are preparing to mount a last-ditch effort tomorrow with the possible filing of a case in U.S. District Court in Washington to stop the law's enforcement, set to begin Sunday.

"The impact is just tremendous," said Washington attorney Michael R. Cershow, who represents the aluminum can companies that plan to file suit. "We have warehouses filled with old cans."

This week the Food and Drug Administration launched a public relations campaign to promote the new labels, which are supposed to clearly spell out dietary and health information, such as amounts of fat and cholesterol, for processed foods. The deadline for using the new labels is Sunday, though most food products in supermarkets already have the new "Nutrition Facts" on their labels. The deadline for meat and poultry products is July 6.

While the labels appear relatively simple, they are the result of years of industry-government negotiations and hundreds of pages of explanations.

"It was and still is a very complicated scheme of regulation," said Toni Guarino, vice president and general counsel for Grocery Manufacturers of America Inc., the trade organization that represents 160 of the country's largest food processors.

Food companies also have had to spend heavily to have laboratory analysis done, along with redesigning and printing labels and disposing of old labels. "More than a billion dollars [in costs], I'm sure, is not overstating," Ms. Guarino said.

McCormick & Co. Inc., the Sparks-based spice and flavorings company, has had to spend $4 million to convert to the new labels, the company says. But the company actually got a break, because about half of its 4,000 products are pure spices, which are exempt from the new regulation.

"It's quite complex," said John H. Nelson, vice president for science and technology at McCormick. To handle the transition, the company appointed a five-person committee two years ago.

Giant Foods Inc. of Landover, the largest grocery store chain in the region, estimated in 1991 that it would cost the company $1 million to analyze and relabel its store brands, said Janet E. Tenney, manager of the nutrition program for Giant. There has been no estimate since then.

"Most estimates were low," she said. "It's an absolutely huge job."

Parks Sausage Co., one of the largest meat-packing operations in the Baltimore area, is spending about $250,000 to change the labels for its 36 meat products by July 6, according to Raymond V. Haysbert Sr., Parks' chairman and chief executive officer.

Most food producers had made the switch to the new labels before this week. But some producers were left with large inventories of the old boxes and cans because they interpreted an Aug. 18 FDA directive as allowing them to use existing inventories after May 8.

But the FDA didn't clarify the matter until March 31, when it said the companies had to start using the new labels on May 8, though old containers that had already been filled could still go to market.

"By the time we heard about it, it was too late," Mr. Cershow said.

Despite protests, the FDA said it will not budge from its March 31 position. "They will not be in compliance if they are coming off the line with the old labels," said Judith Foulke, an FDA spokeswoman.

Mr. Cershow said the suit will be brought by the Can Manufacturers Institute and four can companies that have a total of $4.15 million worth of soft drink cans in their warehouses with the old labels. One of the companies is Crown Cork & Seal Co. Inc., which has a can plant in Baltimore.

The suit will seek an injunction to allow the use of the cans until the dispute is resolved. The number of cans involved amounts to about 0.3 percent of the total number of soda cans coming off production lines after Sunday, Mr. Cershow said. "We don't feel the consumer will be hurt one bit," he said.

But if the suit is successful in getting an injunction, it would allow the use of other old food containers -- many held by smaller companies -- which have a value of more than $100 million, according to Jack W. Lewis, vice president of the Paperboard Packaging Council.

"It could be make or break for small companies," Mr. Lewis said.

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