“Safety of Imported Foods - An Industry Perspective” October 29, 2009

1. “Safety of Imported Foods- An Industry Perspective”October 29, 2009 Craig W. Henry Ph.D. Senior Vice President and Chief Operating Officer, Scientific and Regulatory Affairs Grocery Manufacturers Association Washington, D.C.

2. Key Topics • Consumer Confidence • US Food Imports • Industry Stewardship • Modernizing the US Food Safety System • Summary and Next Steps

3. Consumer Confidence

4. Consumer Confidence • Recent events have exposed weaknesses in our food safety net and shaken consumer confidence in the safety and security of the food supply both domestically produced and imported Spinach Peanut Butter Pet Food

5. Consumer Confidence in Food Safety is Down • The number of consumers "completely" or "somewhat confident" in the safety of supermarket food declined • 82 percent in 2006 • 66 percent in 2007 FMI Consumer Trends 2007, January 2007 survey

6. Consumer Confidence in Food Safety is Down • 38 percent of consumers stopped purchasing certain foods in the past 12 months (vs 9% in 2006) • spinach (71 percent), • lettuce (16 percent), • bagged salad (9 percent) and • beef (8 percent). FMI Consumer Trends 2007, January 2007 survey

7. Consumer Confidence • Recalls have a huge financial impact: • Peanut Butter (Salmonella): $66 million • Spinach (E.coli): $25-$50 million • Pet Food (melamine): $40+ million • Chili Sauce (botulism): $35 million • Topps Meat (E.coli): $31 million • Tomatoes/Peppers (Salmonella):$200 million

8. FDA: Salmonella Saintpaul Outbreak • Since April,1401 persons infected with Salmonella Saint Paul with the same genetic fingerprint have been identified in 43 states, the District of Columbia, and Canada. • Since the salmonella outbreak began in April, 1,423 people have fallen ill and the produce industry has lost more than $200 million as consumers have shied away from buying fresh produce.

9. Irradiation Petition to FDA

10. Irradiation Petition –Ready-to-eat Foods • Developed by the “Food IrradiationCoalition” led by GMA • 30+ Trade, Academic & Industry • Initially, Broad Scope for “Generic”Approval of Many R-T-E Foods • No Changes in Labeling Proposed

11. Recent Strategy for Gaining Approval • Narrow the Scope – FDA has Difficulty with “Generic” Approvals • Target Foods With Demonstrated Opportunity: Hot Dogs, Luncheon Meats & Fresh Produce • Follow Dose Level Ranges Already Approved for Meat & Poultry

12. Petition Scope

13. Ready-to-eat Foods Petition – Status Filed with FDA, October 1999 • On August 21st, FDA approved irradiaton control of food-borne pathogens and extension of shelf life in fresh iceberg lettuce and fresh spinach, not to exceed a dose of 4.0 kGy. • This was a partial response to a petition filed by The National Food Processors Association on behalf of The Food Irradiation Coalition

14. Food Imports and Consumer Confidence

15. Expectations for Assuring Food Safety in the Global Food Economy

16. “Globalization of the food supply means that we (all countries) must share responsibility for food safety throughout the entire food supply chain from producers to consumers.”

17. “The World on your Plate” Salted butter garlic puree garlic salt lemon parsley pepper water - Ireland - China, USA, Spain - China, USA, Spain - USA - France, UK - Indonesia - Ireland Chicken - Belgium, France - Ireland - Ireland, UK Bread crumb Rape-seed oil - EU, Australia Eastern Europe Herb Butter Chicken Breast - Ireland, Belgium UK, France etc. Flour Water Batter: Bread Crumbs Chicken Kiev >10 countries! Courtesy A. Reilly, FSAI, Ireland

18. Source: Sara Lee A Multinational LoafAmy Schoenfeld: New York Times, June 15, 2007 INGREDIENTS: • Wheat gluten • Honey • Calcium proprionate • Guar gum • Flour enrichments • Beta-carotene • Vitamin D3

19. Source: Sara Lee A Multinational LoafAmy Schoenfeld: New York Times, June 15, 2007 • Wheat gluten– France, Poland, Russia, Netherlands, Australia • Honey– China, Vietnam, Brazil, Uruguay, India, Canada, Mexico, Argentina • Calcium proprionate– Netherlands • Guar gum– India • Flour enrichments– China • Beta-carotene– Switzerland • Vitamin D3– China

20. Global Food Trade Already 40% of all trade in agriculture, fisheries & forestry occurs between developing & developed countries. More than 20% of all US imports are food products (more than 8 million shipments a year).

22. US Essential Oils and Spice Imports

23. Changes and ChallengesGlobal Food Supply ** 16.3 MILLION IMPORT LINES ** 9.1 MILLION FOOD LINES ** Estimated

24. Supply Chain Management

25. Supply Chain Management • What is “Supply Chain Management?” Due diligence to assure that products received from suppliers meet required regulatory, legal, and contractual standards of safety.

26. Supply Chain Management • Food industry relies upon a web of inter-company relationships • Producers and growers • Brokers • Repackers • Ingredient vendors • Co-Manufacturers

27. Supply Chain Management • Food industry relies upon a web of inter-company relationships • Successful interactions are precursors to effective food safety management • Knowing and building relationships represents sound investments

28. Importance of Supply Chain Management

29. Importance of Supply Chain Management • Role in Food Safety • Legal Considerations • Regulatory compliance • Liability

30. Importance of Supply Chain Management • Role in Food Safety • Legal Considerations • Financial Considerations • Price vs Quality • “Cheaper” ≠ less expensive! • Value of Brand • Commercial brand • Reputation of exporting economy

31. Importance of Supply Chain Management • Role in Food Safety • Consumer • EXPECT and ASSUME food to be safe • Put responsibility and blame on both product AND exporting economy

32. Importance of Supply Chain Management • Role in Trade • Domestic • Facilitate efficient and effective movement of product • Assure compliance with all national and/or local laws and regulations

33. Importance of Supply Chain Management • Role in Food Safety • Role in Trade • Domestic • International • Facilitate efficient and effective movement of product • Assure compliance with all national and/or local laws and regulations of BOTH exporting and importing economies

34. Importance of Supply Chain Management • Role in Trade • Domestic • International • Facilitate efficient and effective movement of product • Assure compliance with all national and/or local laws and regulations of BOTH exporting and importing economies • Conformance with International Agreements (WTO, CODEX, etc.) • Bolster consumer confidence in importing economy

35. Factors to Consider in Supply Chain Management • Regulatory Requirements • Working knowledge of laws and regulations of importing economy • Technical/scientific basis for regulatory requirements • Risk assessment • Official methods of analysis • Customer Requirements • Expectations of Suppliers • Product specifications

36. Industry Stewardship – Supplier’s Best Practices

37. SOURCING PRODUCTS IN A GLOBAL MARKET:Food Supplier Best Practices • October 2-3, 2007, Washington, DC • 150 attendees • Importers • Manufacturers • Retailers • US and foreign regulators • Trade officials

38. http://www.gmabrands.com/publications/GMA_SupplyChain2.pdf “GMA Food Supply Chain Handbook” Electronically available at no charge in, English, Spanish, French, Russian and Mandarin Chinese

39. Table of Contents • INTRODUCTION • SCOPE • DEFINITIONS • ACRONYMS • SUPPLIER MANAGEMENT • SUPPLIER PRE-ASSESSMENT AND REVIEW • Food safety and sanitation • Preventative procedures • Other

40. Table of Contents • REGULATORY COMPLIANCE • FOOD DEFENSE • Foundation programs for a comprehensive food defense program • SANITATION PROGRAMS • FOOD SAFETY • EMPLOYEE TRAINING • ENVIRONMENTAL MONITORING • ALLERGEN CONTROL • FOREIGN MATERIAL CONTROL

41. Table of Contents • LABEL CONTROL PROGRAMS AND CONSUMER PACKAGING • Design Controls • Inventory Controls • Labels controls for ingredient and industrial packaging • PRODUCT AND INGREDIENT TRACING • PRODUCT TESTING • CONTROL OF NON-CONFORMING PRODUCT (HOLD AND RELEASE)

42. Table of Contents • CONSUMER COMPLAINTS • RECALLS AND MARKET WITHDRAWALS • Recalls or market withdrawals can be necessary for a variety of reasons • CRISIS MANAGEMENT (OTHER THAN RECALLS AND MARKET WITHDRAWALS) • Successful components of a comprehensive crisis management program • OTHER PREVENTIVE CONTROL PROGRAMS • RESOURCES / REFERENCES

43. Achieving a Successful Supply Chain Management System

44. Achieving a Successful Supply Chain Management System • Infrastructure • Regulatory infrastructure • Capacity of regulatory system • Capability of regulatory system

45. Achieving a Successful Supply Chain Management System • Infrastructure • Regulatory infrastructure • Private Sector • Scientific foundation • Technological capability • Processes for assuring compliance throughout the supply chain

46. Achieving a Successful Supply Chain Management System • Infrastructure • Ongoing Training and Education • Recent incidents involving food safety highlight the challenges in building regulator and manufacturer technical competence and understanding of food safety management. • Use of international best practices in food safety management to better assure the safety of the food supply chain • International, inter-sector food safety training outreach

47. Modernizing the Food Safety System – GMA Members Approach

48. GMA Foundational Elements for an Effective Food Safety System • Adequate funding • Adequate authority • Adequate effective training • Risk-based • Industry responsibility • Leveraged resources • Research

49. Proposed Import Control Program by GMA“4 Pillars”