Comment On Recent New York Times E. Coli and Beef Article: How Retailers Can Protect Themselves
Co-Authored By Guest Blogger Scott Hansen
According to its website, last Sunday’s New York Times article on E. coli and beef is among the most widely read pieces published by the newspaper this week. The article tells the story of a 22-year-old Minnesota dance instructor who was left paralyzed after being infected with a strain of E. coli in an “Angus Beef Pattie” she ate in fall of 2007. The article traces the story of her burger, points out the many limitations in the current system, and calls eating beef a “gamble.”
While the article is clearly targeted at meat producers and processors, food retailers selling beef products, such as grocery stores and restaurants, are also at risk. This piece is a reminder of the need for retailers to take steps to ensure proper systems and procedures for tracing food to its source (according to yesterday's statement by Secretary Vilsack, retail traceability of ground beef is soon to be a USDA requirement). The Times lauds Costco, which it says is one of the few big producers that tests trimmings for E. coli before grinding.
Retailers should also be mindful of the utility of supplier agreements sufficiently tailored to limit liability or to procure insurance coverage. The greater protections afforded by well-drafted supplier agreements and carefully placed insurance are the best way to mitigate exposure.
Some may choose strong indemnification provisions and additional insured provisions. Another route, not yet the prevailing trend in the industry but perhaps in the near future, involves wrap-up insurance covering the entire supply chain, accompanied by covenants of cooperation between members of the supply chain.
Wrap-up insurance/covenants of cooperation approach has the advantage of potentially avoiding expensive and reputation-damaging litigation between members of the supply chain. Wrap-up insurance is also more likely to result in sufficient coverage to protect the retailer or restaurant chain.
No matter the path chosen, thoughtful placement of insurance coverage and confidence in supply chain contracts can help a food company weather the storm of a food-borne illness outbreak.
Food Safety Legislation Proposed by House - User Fees and Traceability Are Among Highlights
Last week, members of the U.S. House of Representatives Committee on Energy and Commerce released a discussion draft of the “Food Safety Enhancement Act of 2009.”
The draft proposes beefing up the FDA registry of “all food facilities serving American consumers” and charging every facility $1,000 per year to fund FDA food safety activities. The new legislation would expand the types of facilities that need to register by eliminating certain exemptions from the 2002 Bioterrorism Act, though for now it appears to maintain exemptions for retailers, restaurants, farmers and nonprofits.
The proposal’s most ambitious and controversial proposal may be traceability.
The draft legislation proposes to require FDA to “by regulation establish a tracing system for food that is located in the United States or is for import into the United States.” The legislation gives the FDA few specifics other than to “maintain the full pedigree of the origin and previous distribution history of food,” “link that history with subsequent history,” “establish and maintain a system for tracing food that is interoperable with the systems established and maintained by other such persons” and “use a unique identifier for each facility.” No doubt the devil will be in the details.
Verbatim, here is the Summary of Discussion Draft of The Food Safety Enhancement Act of 2009:
1. Creates an up-to-date registry of all food facilities serving American consumers: Requires all facilities operating within the U.S. or importing food to the U.S. to register with the FDA annually.
2. Generates resources to support FDA oversight of food safety: Requires registered facilities to pay an annual registration fee of $1,000 in order to generate revenue for food safety activities at the FDA; requires registered facilities to pay for FDA’s costs associated with reinspections and food recalls; allows FDA to charge a fee to domestic firms requesting export certificates for exported food.
3. Prevents food safety problems before they occur: Requires all facilities operating within the U.S. or importing food to the U.S. to implement safety plans that identify and protect against food hazards. FDA would have the authority to specify minimum food safety plan requirements and to audit food safety plans.
4. Requires safety plans for fresh produce: Directs FDA to issue regulations for ensuring the safe production and harvesting of fruits and vegetables.
5. Increases inspections of food facilities: Sets a minimum inspection frequency for all registered facilities. High-risk facilities would be inspected at least once every six to 18 months; low risk facilities would be inspected at least once every 18 months to three years; and warehouses that store food would be inspected at least once every three to four years. Refusing, impeding, or delaying an inspection is prohibited.
6. Improves traceability of food: Enhances FDA’s ability to trace the origin of tainted food in the event of an outbreak of foodborne illness. FDA would be required to issue regulations that require food producers, manufacturers, processors, transporters, or holders to maintain the full pedigree of the origin and previous distribution history of the food and to link that history with the subsequent distribution history of the food; and to establish an interoperable record to ensure fast and efficient traceback (current law permits facilities to hold a record in any format — paper or electronic — making efficient tracing of foods difficult for FDA). Prior to issuing such regulations, FDA would be required to conduct a feasibility study, public meetings, and a pilot project.
7. Enhances the safety of imported food: As an additional layer of protection, FDA can require food to be certified as meeting all U.S. food safety requirements by the government of the country from which the article originated or by certain qualified third parties. Third party certifying entities must meet strict requirements to protect against conflicts of interest with the firm seeking certification.
8. Expands laboratory testing capacity: Requires FDA to establish a program to recognize laboratory accreditation bodies and to accept test results only from duly accredited laboratories. Gives FDA the ability to require laboratories to send test results to FDA.
9. Provides strong, flexible enforcement tools: Provides FDA new authority to issue mandatory recalls of tainted foods. Strengthens criminal penalties and establishes civil monetary penalties that FDA may impose on food facilities that fail to comply with safety requirements.
10. Creates fast-track import process for food meeting security standards: Permits FDA to develop voluntary security guidelines for imported foods. Importers meeting the guidelines would receive expedited processing.
11. Enhances the safety of infant formula: Enhances FDA’s ability to assure the safety of new infant formulas before they go on the market.
12. Advances the science of food safety: Directs the Secretary to include food in an active surveillance system to assess more accurately the frequency and sources of human illness. The Secretary is also directed to identify industry and regulatory approaches to minimize hazards in the food supply.
13. Enhances FDA’s ability to block unsafe food from entering the food supply: Strengthens FDA’s authority to administratively detain unsafe food products. Grants FDA “quarantine” authority under which the agency may restrict or prohibit the movement of unsafe food products from a particular geographic area.
14. Directs FDA to assess the use of carbon monoxide in certain foods: Requires FDA to conduct a safety review of the use of carbon monoxide in meat, poultry, and seafood products.
15. Enhances transparency of GRAS program: Requires posting on FDA’s website of documentation submitted to FDA in support of a “generally recognized as safe” (GRAS) notification.
16. Requires country-of-origin labeling and disclosure: Requires all processed food labels to indicate the country in which final processing occurred. Requires food manufacturers to identify the country of origin for all ingredients on their websites. Requires country-of-origin labeling for all produce.
General Provisions
1. Creates an up-to-date registry of importers: Requires all importers of drugs, devices, and foods to register with the FDA annually and to pay a registration fee.
2. Requires unique identification numbers for facilities and importers: To enhance information about FDA-regulated entities, creates unique identification numbers for all drug, device, and food facilities and importers.
3. Creates a dedicated foreign inspectorate: Requires FDA to establish and maintain a corps of inspectors to monitor foreign facilities producing food, drugs, devices, and cosmetics for American consumers.
4. Grants FDA new authority to subpoena records related to possible violations.
5. Provides protection for whistleblowers that bring attention to important safety information: Prohibits entities regulated by the FDA from discriminating against an employee in retaliation for assisting in any investigation regarding any conduct which the employee reasonably believes constitutes a violation of federal law.
Breakthrough in Detection of BSE (a.k.a. "Mad Cow Disease")
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No food-borne illness induces consumer fear like Bovine Spongiform Encephalopathy (BSE a.k.a. "Mad Cow Disease"). The beef industry in particular has gone to great lengths to take preventative steps against the introduction of BSE into U.S. herds. A big problem in controlling BSE is that it’s difficult to detect. The only detection method currently available involves the slaughter of a suspect animal and a series of not very reliable tests.
Now comes word that researchers at Cornell University have devised a “tuning fork” method that may detect BSE at the prion level:
Harold Craighead and colleagues at Cornell University have developed nanoscale resonators, which are tiny devices that function like tuning forks by changing pitch with increased mass. When prions bind to the resonator’s silicon sensor, it changes the vibrational resonant frequency of the device. In experimental trials, the sensor detected prions at concentrations as low as two nanograms per milliliter, the smallest levels measured to date.
Though still a while away from practical application, the technology may have dramatic effects on the ability to ensure the safety of the nation’s beef supply. The BSE “tuning fork” is a good example of yet another new technology industry that the government can use to ensure food safety and consumer confidence.
Farming and safe handling practices alone cannot provide the level of assurance that consumers demand in their food supply. Tuning fork, irradiation, and better bacteria detection are all vital tools that industry, government, and consumers need to embrace.
More on Supply Chain Verification and Crisis Management
Food Safety Magazine’s latest issue focuses on “Industry in Crisis Mode.” The issue includes an article by Shaun Kennedy, director of the National Center for Food Protection and Defense (NCFPD). Mr. Kennedy provides a good overview of the elements of a supply chain verification program that any food seller should consider.
Mr. Kennedy acknowledges that costs for third-party audits, fixing supply chain problems, and establishing traceability can be high. To justify costs, he points to the recent experience of Maple Leaf Foods. According to Mr. Kennedy, Maple Leaf Foods incurred “direct costs to the company of over $20 million. The shareholder costs are even greater with its stock price having dropped by over 20% by the end of August since the announcement of the recall, a shift of over $200 million.” These costs do not include anything to compensate possible tort victims or to respond to inevitable products liability litigation (whether merited or not).
