Industries News

New Marking of Foodstuff will ‘Hit at the Purse’ of an American

Experts are warning, that the new system of foodstuff marking may cost the Americans additional billions of dollars, if retailers and suppliers lay the burden of additional expenses on them. Thus, according to new regulations a special label, indicating the country of origin (M-COOL), must be attached to farmer-delivered meat, fruit and vegetables, offered in supermarkets and large stores, this being a part of Bill-2008. The US Department of Agriculture (USDA) has calculated that all in all introduction of this new rule will result in more that $2.5 billion for retail companies, intermediate sellers and manufacturers. However, companies may easily shift the burden of their expenses to the “end of market chain” – i.e., to the purchasers. Thus, a representative of Food Marketing Group (who preferred to remain unknown) stated, that in a branch, where the net profit makes up only 1-2% of sales, any growth of overheads may obviously impact the purse of a consumer. It is most likely, that during the first year of the program the US grocery stores will be most affected: expenses of this sector will increase by $950 M. This is equivalent to an increase of price for a pound of meat by $0.04- $ 0.07, which is explained by the change of package. According to the data, provided by USDA, average expenses for bringing the stores into compliance with new COOL will make up $26.000 per one store. However, introduction in 2005 of a similar program for marking fish cost the stores almost 10 times as much as the estimated $1.500. This gives ground to a general understanding that the only way to cope with the costs is to force the purchaser to share such costs. Meanwhile, some retailers got a move to assure that introduction of M-COOL would not produce any negative impact on the “physical entities”. The other, like Wal-Mart and Kroger Co refuse to comment.

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