by David W. Dexter, Senior Vice President of Government and Public Affairs
When author Denis Waitley said, “expect the best, plan for the worst, and prepare to be surprised,” could he have been thinking about SFA government affairs? Whatever he was thinking, 2004 was full of surprises for the snack food industry in the legislative and regulatory arena. Chief among these was Maryland’s 5% tax on snacks that was passed in March by the Maryland Senate with no public hearing and no opportunity to testify or comment on the measure.
State-level snack taxes were left in the dust heap of the 20th century — all four on the books throughout the 1990s were proven to be regressive, arbitrary and confusing. (Maryland’s levy was repealed in 1997.) So SFA was indeed prepared to fight the Maryland plan that was already halfway through the General Assembly. SFA and its allies took its case to Annapolis and testified before the House Ways and Means Committee during the height of SNAXPO 2004.
SFA members also weighed in with calls to legislators, Gov. Bob Ehrlich (R) and even state Comptroller (and former governor) William Donald Schaefer (D), who expressed his opposition to snack taxes in a letter to the state Senate Budget & Taxation Committee. SFA was further successful in keeping the proposal out of the budget reconciliation negotiations, and the Assembly adjourned in April without implementing the tax.
Two other states unsuccessfully attempted to enact a snack tax. In May, SFA, in concert with the Don’t Tax Food Coalition, blanketed the Texas Senate with letters of opposition after news surfaced of a tax on foods “not generally considered a major component of a well-balanced meal.” In June, reports out of Illinois indicated that 1-oz. portions of salty snacks might be included in a tax on foods encompassing candy and soft drinks — which prompted a swift response from SFA and its allies.
Route Sales On-Duty Time Questioned
Another “old” issue that is new again is Hours of Service for Drivers. This rulemaking by the Federal Motor Carrier Safety Administration (FMCSA) was a great concern in 2000, when there was serious discussion of restrictions on nighttime driving and mandatory 48 consecutive hours off per week for operators. Instead, FMCSA issued a Final Rule in 2003 that shortened the on-duty time from 15 to 14 hours. The SFA-led Hours of Service Coalition sought statutory relief through Congress as the reduced on-duty time in the new rule disproportionately increased the cost to “short haul” operators.
In response to a suit filed by traffic safety groups, a federal appeals court vacated the entire Hours of Service for Drivers Final Rule in July 2004 and told FMCSA to rewrite the rule under certain parameters set by the court. Since FMCSA had a previously established statutory deadline of Sept. 30, 2005, there were concerns that FMCSA would promulgate a rule without an adequate notice and comment period. FMCSA responded to the Hours of Service Coalition that public review and comment would be granted to stakeholders.
Nutrition Issues Still Dominate
For 2004, issues surrounding school food restrictions required a significant commitment of SFA staff time and resources. At the federal level, it was crucial to persuade Congress to reauthorize the National School Lunch Program without new restrictions. Indeed, at the request of the food industry, both the House and Senate rebuffed amendments that sought to expand the U.S. Department of Agriculture’s (USDA) regulatory authority to restrict the sale of competitive foods, like snack foods, throughout public school campuses. Another proposal was defeated that would have required USDA to revisit the definitions of “foods of minimal nutritional value” (e.g., gum, candy, soft drinks). Nearly half the states considered legislation that sought restrictions on food for sale to students on school campuses. None of these — including an attempted expansion of California’s bellwether SB 19 — were enacted.
The new USDA Dietary Guidelines that were largely drafted in 2004 included tables that identified potato chips, corn chips and popcorn as a major food source of trans fat. In response to those tables, SFA explained that the report does not reflect the current composition of snack foods and the snack food industry is presently engaging in reformulation of the oils used in snack food manufacturing to reduce or eliminate trans fat. SFA urged the Department of Health and Human Services and USDA to avoid identifying any particular foods or food categories as a major source of trans fats because the food supply is changing rapidly and such identifications can become quickly outdated. In a related area, SFA protested to the U.S. Food and Drug Administration (FDA) that its Web site listed potato chips as having a high trans-fat content. As SFA requested, FDA updated its Web site and now identifies potato chips as having 0 gm. trans fat per serving. SFA also joined with others in submitting comments to FDA opposing a petition that sought to deny GRAS status to partially hydrogenated oil.
Acrylamide Not Forgotten
Acrylamide continued to be a prominent issue for the snack industry, but not in the news headlines. In May, a panel of experts convened by the U.S. National Toxicology Program (NTP) concluded that acrylamide exposure via the diet was not likely to be harmful to developing offspring or to reproduction. SFA actively participated in the three days of deliberations and submitted two sets of comments that helped the NTP scientists reach their favorable conclusion.
In June, SFA joined with 42 other associations and food manufacturers in a letter to California Gov. Arnold Schwarzenegger (R) alerting him to the misapplication of Proposition 65 to acrylamide and other substances produced from natural constituents of foods when they are cooked. The letter was in response to efforts by a state agency to apply Prop 65 labeling and other requirements to food. SFA also participated in a second acrylamide workshop sponsored by the FDA and the University of Maryland Joint Institute on Food Safety and Applied Nutrition.
Country of Origin Labeling (COOL) for peanuts also figured prominently in SFA’s government affairs activities. At present, the USDA considers roasted peanuts subject to the statutory requirements, although processed foods are clearly exempt from the law. SFA and others made numerous visits to Capitol Hill and met with Bush administration officials in an effort to get peanuts exempted from COOL or at least get roasted peanuts recognized as a processed food. In early 2004, Congress enacted a two-year moratorium on enforcement of COOL and the House Agriculture Committee passed on outright repeal of the law last July. However, the Senate failed to act upon the legislation.
On the international scene, SFA and other food trade associations opposed the World Health Organization’s Global Strategy on Diet, Physical Activity and Health, mostly because of the punitive measures proposed, such as restrictions on advertising aimed at children and promotion of government schemes to increase “junk food” prices. Tariffs also made their way onto SFA’s agenda. Last fall, SFA submitted comments to the Office of the United States Trade Representative (USTR) opposing proposed 55% punitive duties on U.S. imports of dried tomato powder from the European Union (EU). Finally, SFA joined 22 other trade associations and food manufacturers in a letter to the USTR expressing concern about the EU’s demands for the protection of geographical indications such as feta and Parmesan. The letter stated that protection of these geographical indications would represent a significant threat to the U.S. trademark system.
Other issues gaining significant attention from SFA included the Bioterrorism Act implementation, National Uniformity for Food Labeling, allergen labeling and lawsuit abuse. SFA expects all of these issues, and more, on its plate throughout 2005.
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