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Lamenting labeling.

Homer's Alaska Wild Berry Products and other food-packaging companies regard new labeling laws as causes of headaches and heartburn.

American consumers' continued interest in health has boosted the blood pressure of several Alaskan entrepreneurs and could put next year's profits for those companies on a crash diet.

Starting in May 1993, almost every business in America that packages and sells food products must perform a nutritional analysis for each product in its line and print that information on the product label. While the analysis and labeling may not pose a problem for a large corporation that makes millions of the same candy-bar every year, it spells headaches and heartburn for small businesses with multiple product offerings. One such enterprise is Alaska Wild Berry Products, a Homer-based company that produces several hundred varieties of chocolate candies, jams and canned fish.

Terre DeVaney, vice president of Alaska Wild Berry, says the costs will be outrageously high. "That's $1,750 for testing each product we make. We do 80 different flavors of candy in each of three kinds of chocolate. It'll cost us $150,000 to $200,000 to conform to this," she explains.

Alaska Wild Berry is not alone. Retail confectioners around the country face the same dilemma and have asked the U.S. Congress to exempt candy from the labeling law. In Alaska, purveyors of packaged sausage, fish and other foods see the new nutrition labeling as another cost they and eventually their consumers must eat.

"It's going to be very costly to do," says Kevin Maltz, co-owner of Fresh Sourdough Express Bakery, a Homer business that sells cake, brownie and muffin mixes from its successful bakery. He agrees that nutritional labeling is a good move. "People want it. But for a small business to comply is going to be really difficult," Maltz adds.

Congress passed the Nutrition Labeling and Education Act of 1990 nearly unanimously, riding a wave of public sentiment that American diets are not as good as they should be. The act was intended to give consumers more information in hopes that they would develop better, healthier eating habits. The Food and Drug Administration (FDA) must put the act into effect.

While most packaged foods already carry nutritional labels, labels will be "reoriented," according to FDA. The reasoning behind the act is that consumers need less information on "micronutrients," such as vitamins and minerals, and more on "macronutrients" -- fats, proteins and carbohydrates. Special emphasis will be given to today's more newsworthy nutrients, such as cholesterol, sodium and fiber.

The act also will clarify and clean up manufacturers' claims through new, stringent standards. No longer, for example, could a frozen cheesecake claim "only 70 calories per serving" when the serving size is a miniscule one ounce portion. The act standardizes serving sizes for most foods, so shoppers can compare similar products. Terms like "fat free" or "low sodium" also must meet specific standards.

In short, label readers in the future can expect to see the truth, the whole truth and nothing but the truth.

That's a moot point with candy, argues Alaska Wild Berry Products' DeVaney. Candy is a luxury item, widely recognized as devoid of nutritional value, she says. But because her chocolates have calories, fat, and perhaps even protein in the nut centers, they fall under the nutritional labeling act. "What they're trying to do is nonsense," she says.

Not only must Alaska Wild Berry test each of its candies, it must re-test if the recipe changes even slightly -- if the company substitutes 2 percent milk for skim milk or uses a different brand of chocolate. DeVaney says she hasn't even mentioned to FDA that her berries come from all over Alaska. She fears that a Seldovia blueberry might be sweeter than one from Dillingham.

"We've screamed, we've hollered, we've yelled," she says, in hopes of getting some relief from the act. "It's looking pretty hopeless."

Herb Eckmann, owner of Alaska Sausage Co. of Anchorage, wonders how FDA will react to the nutritional analysis of his products. A certain type of sausage might include 80 percent lean trim meat in one batch, but only 75 percent in the next, thereby boosting the fat content.

Less controllable yet are fish, Eckmann notes. A king salmon caught in Prince William Sound contains far less fat than one landed 500 miles up the Yukon River. Eckmann wants to know: Will he need different labels for the same product simply because the raw material comes from disparate regions?

"We have to have some variation" in manufacturing meat and seafood products, Eckmann says. "FDA doesn't know Alaska has so many different kinds of kings," he adds.

Labeling their products will be a nightmare for both companies, particularly in variety packs, Eckmann and DeVaney agree. A pound of mixed chocolates from Alaska Wild Berry Products will require 28 different labels, while Alaska Sausage Co.'s gift packs contain eight or nine products. "We won't even have room for our name" on the box, DeVaney says.

"We have a one-ounce package of salmon jerky. How are we going to put a label on that?" Eckmann asks.

FDA has heard all those complaints and more, says Virginia Wilkening, in the agency's Washington, D.C., Office of Nutrition and Food Sciences. "It isn't our intent, and I'm sure it wasn't Congress', to put small businesses out of business because of nutritional labeling," Wilkening says. But, she adds, Congress wrote the law and FDA has no choice but to implement it as scheduled.

The regulations causing so much heartburn are only preliminary. FDA took public comment and is currently writing the final regulations, which should be complete by November. Six months later -- May 1993, if FDA sticks to its schedule -- the new statute goes into effect.

Small businesses may find some relief, however. The original act exempts very small businesses from the new labeling -- businesses that sell less than $50,000 per year in food and also have total business sales of less than $500,000 per year. Also exempt are bakeries, delicatessens and grocery stores with ready-to-eat items, such as salad bars.

DeVaney, Eckmann and others -- including Retail Confectioners International and Western States Meat Packers Association -- have asked FDA to expand the existing exemptions or create new ones. The confectioners want retail candy completely exempt from nutritional labeling.

DeVaney says she would be happy with that. She notes that another solution would be to exempt items produced in small quantities. Or perhaps better yet, raise the small-business exemption for maximum gross annual sales to $5 million, DeVaney says.

According to Wilkening, FDA definitely is considering expanding the exemptions to reduce the hardship on small businesses. But the agency has its marching orders from Congress.

Even if the regulations are approved as currently written, Wilkening says businesses such as Alaska Wild Berry Products can probably streamline the labeling process to make it more palatable. "(FDA) is certainly willing to work with companies to make this as reasonable as possible, using common sense to make it accurate," she adds.

U.S. Sen. Ted Stevens' office is watching the process, but will wait until FDA issues the final regulations this fall before taking action, reports spokesman Mitch Rose.
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Title Annotation:small food-packaging companies complain about the labeling laws
Author:Gay, Joel
Publication:Alaska Business Monthly
Date:Aug 1, 1992
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