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Food businesses face increased regulation

by Mike Sunnucks and Jolie McCullough

Article from The Phoenix Business Journal

Tim Koors/Phoenix Business Journal
Bret Wingert, vice president of Souvia Tea, displays some of the specialty teas offered at his Valley stores. Wingert said proposed legislation would require small retail food businesses to deal more with the federal government.

Owners of small food-related businesses in the Valley are concerned about a federal plan to expand the government’s power to police food-related businesses and production.

That includes the ability to issue recalls, quarantine food supplies in contamination cases, and impose larger penalties on companies that violate food safety rules.

One bill making its way through Congress, the Food Safety Enhancement Act, would create a $500 annual federal licensing fee for food sellers and producers to fund a wider food-policing role for the U.S. Food & Drug Administration.

The federal fee would piggyback any local licensing requirements.

Local independent and small-business owners say new federal fees and regulations likely would squeeze their already tight operating margins. They are concerned such rules will pressure smaller operators and micro-businesses, even though recent food contamination incidents have occurred at larger corporate farms and production plants.

“The more regulations in place, that just adds to the cost,” said Bret Wingert, vice president of Souvia Tea, which has tea shops in Phoenix and Scottsdale.

Wingert said the FDA already has oversight over some food imports into the U.S., but the new plans would result in smaller retail food businesses also having to deal with the federal government.

“This is going to add a whole other layer,” he said.

Shirley Miller, owner of Lil Sassy Salsa in Chandler, said small food-related businesses — many of which sell their products at farmers markets — deal with the Maricopa County Health Department regarding the cleanliness of their operations.

She said the companies that import food and engage in large-scale packaging and production are the ones facing federal scrutiny.

More stringent federal rules could create more bureaucratic hurdles and cost increases on smaller producers.

“It could impact our business,” she said.

The trouble for many smaller independent food sellers is that they already are operating on slim margins.

Adding more federal fees and regulatory layers will add to their costs and eat away at their viability, said Joe Vanderhart, owner of Farmer Joe’s Veggies and a vendor at the Downtown Phoenix Public Market.

“A lot of them aren’t really that big, and they aren’t making a lot of money anyway, so any extra expense isn’t going to be good for them,” Vanderhart said.

The food safety bill, House Resolution 2749, is making its way through committees in the U.S. House of Representatives and could be voted on by the full chamber soon.

HR 2749 has the backing of food safety advocates, consumer protection organizations and federal lawmakers worried about recent food contamination incidents.

Advocates say federal food-safety policing needs to be expanded.

“A series of food-borne disease outbreaks — in spinach, peanuts and peppers, to name a few — not only has sickened and killed American consumers, but has shaken public confidence in the industry that produces one of our most basic and important commodities. And it has laid bare unacceptable gaps in our food safety laws,” House Energy and Commerce Committee Chairman Henry Waxman, D-Calif., said during a hearing earlier this month on the food safety bill.

Waxman, who favors greater FDA powers, is one of the sponsors of the bill. The measure does not have any Arizona sponsors.

U.S. Rep. Gabrielle Giffords, D-Ariz., is one of the co-sponsors of HR 815, which would increase federal inspections of and penalties for violations at meat and poultry plants.

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