BILL ANALYSIS
----------------------------------------------------------------------
|Hearing Date:May 11, 2009 |Bill No:SB |
| |550 |
----------------------------------------------------------------------
SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 550Author: Florez
As Introduced: February 27, 2009 Fiscal: No
SUBJECT: Public Health: food product recall technology.
SUMMARY: Requires a grocery store that uses a programmable
checkout scanner to ensure that when a recalled product is scanned,
the programmable checkout scanner will notify the employee and
customer that the product being purchased is subject to a recall.
Existing law:
1)Requires a meat and poultry supplier, distributor, and processor
that sells any meat or poultry product which meets the criteria
for a Class I or Class II recall, according to the United States
Department of Agriculture (USDA) guidelines, to immediately do
the following:
a) Notify the Department of Public Health (DPH), and provide
DPH an electronic list of customers who have or will receive
the product, including a firm name, address, contact person's
name, telephone number, fax and e-mail address, as well as all
pertinent identifying codes and shipping information for each
customer including package codes, product codes, pack dates,
and lot numbers.
b) Notify each of its customers that received or may receive
products of the recall in a standardized format and to
document this notification, as specified, maintain
documentation of the notice, and provide it to DPH upon
request. [Health and Safety Code (HSC) 110806]
2)Requires every retail grocery store or grocery department which
uses an automatic checkout system to have a clearly readable
SB 550
Page 2
price indicated on 85 percent of the total number of packaged
consumer commodities offered for sale. [Civil Code (CC) 7100
ff.]
3)Establishes the criteria and methodology, as specified, by which
the county sealer is to measure and verify the accuracy of a POS
system used by retail establishments as a means for determining
the price of an item being purchased by a consumer, and further
authorizes the county to:
a) Take enforcement action for any item that is not accurately
scanned.
b) Charge a POS inspection fee, not to exceed the actual cost
of inspecting or testing the system. [Business and
Professions Code (BPC) 13350 ff.]
4)Defines "Point-of-Sale" systems as a computer or any electronic
system used by a retail establishment, such as, but not limited
to Universal Product Code (UPC) scanners, price lookup codes, or
an electronic price lookup system as a means for determining the
price of the item being purchased by a consumer. [BPC 13352]
This bill: Requires a grocery store that uses a programmable
checkout scanner to ensure that when a recalled product is scanned,
the programmable checkout scanner will notify the employee and
customer that the product being purchased is subject to a recall.
FISCAL EFFECT: Unknown. This bill has been keyed "non-fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. This bill is sponsored by the Author to require grocery
stores which use programmable check-outs scanners to program them
to notify the employee and customer when a recalled product is
scanned.
According to the Author, the latest major recall involving peanut
butter tainted with Salmonella, which impacted items from snacks,
to dog food to diet products, demonstrates the challenges a
widespread outbreak presents in identifying which products are or
are not impacted. The Author states that there is no fail-proof
SB 550
Page 3
way to ensure all recalled products which have already been
shelved are identified and pulled, other than to have those items
trigger an alert when scanned at check-out.
The Author contends once an item has made it out of the plant, off
the truck and onto the shelves and is recalled, it is
unreasonable to think an individual stocker can go through every
shelf and identify every item that could pose a threat. The
Author further states: "In fact, I have had staffers from my
office easily purchase items subject to recall at local grocery
stores. I believe grocers have the tools at their disposal to
give consumers the final line of defense they need and expect.
Currently, a retail scanning system can easily track price
changes. It is not impossible to use technology to avoid a
public health problem. Grocery stores such Kroger's and Food 4
Less currently implement a food recall procedure where a customer
is alerted at the check-out register."
The Author states: "There is a lack of confidence that recalled
products are actually recalled. It is for these reasons that I
have introduced SB 550."
2.Background.
a. Recent Salmonella and E. coli outbreaks and recalls. The
recent Salmonella outbreak in peanut products is the latest
example of how contaminated foods can end up on store shelves,
threatening consumer safety. The largest recall in U.S.
history is linked to nearly 700 illnesses and nine deaths
across 44 states The products produced by Peanut Corporation
of America (PCA) located in southwest Georgia, but
distributing products across the US, were directly linked to
the outbreak. Over 2,100 products have been voluntarily
recalled by more than 200 companies, and the list continues to
grow. In light of these facts, the Author contends there must
be measures in place to ensure that recalled food is not sold
to unsuspecting customers.
Even more troubling is that contaminated products may have been
fed to children at their schools. It's been reported that
contaminated peanut products have been distributed to at least
162 public and private schools. There is no question that
this is not an isolated incident. Outbreaks of food-borne
illness continues to plague the nation and California,
year-after-year.
SB 550
Page 4
According to the Center for Disease Control, this outbreak began
in September of 2008. A recall wasn't issued until January of
2009, listing several hundred recalled products. It seems to
demonstrate that we are playing "catch-up" with a flawed food
recall system.
In the last two years alone, there have been food-borne illness
outbreaks in spinach, lettuce, tomatoes, and 2008 saw the
largest beef recall in US history.
California has been the source of a number of food-borne illness
outbreaks. Most recently, a California pistachio processor
has been identified as the source of a nationwide recall of
salmonella-contaminated pistachios. First identified on March
26 of this year by a Kraft Foods food-borne illness test, FDA
was able to trace back the contamination to a California
pistachio producer, Setton Farms of Terra Bella, which
resulted in a nationwide recall of Setton pistachios and
pistachio products.
Earlier, California was identified as the source of a nationwide
outbreak of E. coli from spinach production. The spinach
outbreak sickened 204 people across 26 states and lead to the
death of three people.
In March of this year, DPH announced a recall of brown organic
eggs because the eggs may be tainted with Salmonella. The
recalled eggs came from a producer in Ripon, north of Modesto,
and were distributed to Costco, Safeway and Pack n' Save
stores in northern and central California and western Nevada.
No known illnesses have been reported in connection with these
eggs.
b. Federal Authority to Order Food Recalls. Food recalls are
voluntary and federal agencies responsible for food safety
generally have no authority to compel companies to carry out
recalls. In recent years, the Food and Drug Administration
(FDA) has fielded increasing numbers of questions regarding
recalls of unsafe imports, including jalape?o peppers, pet
food, the blood thinner heparin, and toothpaste.
Additionally, several domestic food products, from peanut
butter contaminated with Salmonella to spinach linked to E.
coli to canned meat products such as chili sauce spoiled by
Clostridium botulinum (botulism), have been voluntarily
recalled by businesses in recent years. Recalls may decrease
consumer confidence in the recalling company, food imports, or
SB 550
Page 5
food safety agencies such as the FDA when products later
subject to a recall may have sickened or killed people or
pets. The FDA only has the authority to order recalls in
three types of products: infant formula, medical devices, and
human tissue products. However the agency may request that a
company recall other products, such as food, drugs, and
cosmetics.
c. Federal Emphasis on Food Safety. In January 2004,
President Bush identified the nation's food system as
vulnerable to intentional acts of terrorism (Homeland Security
Presidential Directive/HSPD-9 Defense of United States
Agriculture and Food, January 30, 2004). According to the
United States Government Accountability Office's (GAO)
analysis of recalls in its October 2004 report on Food Safety:
USDA and FDA Need to Better Ensure Prompt and Complete Recalls
of Potentially Unsafe Food, only 38 percent and 36 percent of
recalled food was ultimately recovered in recalls overseen by
United States Department of Agriculture (USDA) and FDA,
respectively. According to the GAO report, "the USDA and FDA
do not know how promptly and completely the recalling
companies and their distributors and other companies are
carrying out recalls, and neither agency is using its data
systems to effectively track and manage its recall programs."
d. President Obama Calls for Tougher Food Safety Regulation.
In March of this year, President Obama announced steps to
toughen food safety regulation, blaming outdated laws and
regulations, inadequate food inspections and lack of resources
at the FDA, stating "This is a hazard to public health . . .
It is unacceptable." Furthermore, the President announced the
creation of a Food Safety Working Group, chaired by the
Secretaries of Health and Human Services and USDA which will
include cabinet members and senior officials from other
federal agencies responsible for food safety. The Working
Group will give advice on legislation and ways to improve a
regulator's ability to prevent and trace contaminated food.
Currently a number of federal agencies have a hand in
food-safety regulation. The USDA regulates meat, poultry and
eggs, and the FDA regulates most other non-meat items, such as
fruits, vegetables and packaged foods.
e. The National Advisory Committee on Microbiological Criteria
for Foods (NACMCF). The NACMCF was established on March 18,
1988, in response to recommendations of the National Academy
of Sciences for an interagency approach to microbiological
SB 550
Page 6
criteria for foods.
The NACMCF provides impartial, scientific advice to federal food
safety agencies for use in the development of an integrated
national food safety system approach from farm to final
consumption to assure the safety of domestic, imported, and
exported foods. The NACMCF subcommittees have developed
microbiological criteria for specific foods such as raw
shellfish, cooked ready-to-eat shrimp, and crabmeat. NACMCF
reports provide current information and scientific advice to
participating federal food safety agencies and serve as a
foundation for regulations and programs aimed at reducing
food-borne disease and enhancing public health.
f. State Authority to Order Food Recalls. Currently there is
no specific authority for any state agency to order the recall
of food items in California. While SB 173 (Florez) proposes
to establish that authority, as noted below, there is no
current mandate or authority to order the recall of a food
item. Under the current system, recalls of tainted foods are
voluntary and are ordered by the manufacturer or producer of
the food products. The DPH currently has the authority to
embargo produce from being sold into the food supply chain.
However that embargo authority stops the movement of the
produce, it does not recall the produce.
3.Joint Informational Hearing with Senate Food and Agriculture
Committee and Senate Education Committee. On March 5, 2009, a
joint hearing titled How Safe Are You? An Investigation into
California's Peanut Supply and How Our State is Protecting You
from Salmonella, focused on the Salmonella outbreak across the
country that came from contaminated peanut butter and peanut
products. In that hearing, testimony was received from State
agencies, including DPH, retailers and grocers, and others
regarding solutions and ways to prevent such outbreaks in the
future. SB 550 was one of the issues discussed as a part of the
solution to the problem of how to best protect consumers from
tainted food products.
4.Computer Scanning Systems and Pricing Display Accuracy. The
primary purpose of computer readable scanning systems have been
for ease and speed of pricing and the checkout process, and for
inventory control and tracking. Since the Rosenthal-Roberti Item
Pricing Act of 1981, California law has required that most items
sold in grocery stores be individually marked and have a clearly
readable price if the store uses a computer-readable scanning
SB 550
Page 7
system. Prior to 2002, it was the consumer's obligation to
notice discrepancies between the marked price and the price
displayed. AB 2732 (Washington), as noted below, sought to fight
consumer fraud by ensuring that the price be conspicuously
displayed for the consumer by automatic checkout systems.
5.Related Legislation. SB 173 (Florez) in the current session, as
amended April 20, 2009, was introduced by the same Author to
provide DPH with mandatory recall authority of food believed,
upon any basis reasonably supportable by standard epidemiological
practice or credible scientific research, to carry a food
borne-illness, infection, pathogen, contagion, toxin, or cause
illness in humans. The bill requires all growers or food
processors that test for food-borne illness to maintain records
and results of those tests for at least two years and have them
available for inspection by DPH. The bill further requires
growers or food processors that receive a positive test result
for food-borne illness to report to DPH within one hour of the
test result. The bill imposes treble damage payments to victims
upon growers and food processors responsible for a food-borne
illness or outbreak and would require them to have onsite
inspection by an agent of DPH at least eight times per month for
at least one year. That bill passed the Food and Agriculture
Committee 3-1 on April 21, and passed Health Committee 7-3 on
April 29. It is currently in the Senate Appropriations
Committee.
6.Prior Legislation. AB 1860 (Huffman, Chapter 569, Statutes of
2008) established the Product Recall Safety and Protection Act,
which among other things, requires a commercial dealer,
manufacturer, importer, distributor, or wholesaler that has
placed a product subject to a recall or warning into the stream
of commerce to do the following within 24 hours of receiving
notice of the recall or warning: (1) contact all of its
customers, other than end consumers, to whom it sold, leased,
sublet, or transferred the product; (2) place a link on its
Website, if any, to recall or warning information that contains
the specific recall notice or warning. Requires a retailer who
receives notice of a recall or warning regarding a product that
was sold during the previous 18 months to take specified steps,
including, within three days, to remove the product from the
shelves of its stores or program its registers to ensure the item
cannot be sold and prominently post the recall notice or warning
for at least 60 days.
SB 200 (Florez) 2008 would have authorized the State Public Health
SB 550
Page 8
Officer to adopt recall, quarantine, and sanitary regulations
necessary to prevent, or eliminate conditions where produce or
food processed from produce may carry an illness, infection,
pathogen, contagion, toxin or condition that could kill or
seriously affect the health of humans. Would have required all
leafy green vegetable growers to be licensed by the DPH. Would
have established an inspection program for leafy green
vegetables. That bill failed passage in the Assembly Agriculture
Committee.
SB 202 (Florez) 2008 would have established a system to trace back
to the field for all California leafy green production. That
bill failed passage in Assembly Agriculture Committee.
AB 1907 (Ruskin, Chapter 434, Statutes of 2008), extended authority
of county sealers of weights and measures to levy civil penalties
for violations; extended the sunset on the authority for counties
to charge an annual device registration fee; updated and revised
fee schedule levels, and established, until January 1, 2014, the
authority for counties to inspect the pricing accuracy of retail
point-of-sale systems.
SB 611 (Speier, Chapter 592, Statutes of 2006) established the
requirement for a meat or poultry supplier, distributor, broker
or processor to immediately notify the (DPH) when meat or poultry
products they sell are subject to a Class I or Class II recall by
the USDA.
AB 2285 (B&P Committee, Chapter 566, Statutes of 2006), made
changes to the list of items required to be displayed for
consumers by automatic checkout systems, and recast the term
"automatic checkout" to refer to the term "point-of-sale" and
modified the definition for "point-of-sale system."
AB 889 (Ruskin, Chapter 529, Statutes of 2005), established the
authority for counties to inspect the pricing accuracy of retail
POS systems.
SB 1585 (Speier) of 2004, also would have required beef and poultry
suppliers, distributors, and processors to notify DPH when meat
or poultry they sell in California is subject to a voluntary USDA
recall. That bill was vetoed by the Governor.
AB 2732 (Washington, 2002, Chapter 818, Statutes of 2002), required
automatic checkout systems to display the price read by the
computer. Required a business that uses an automatic checkout
SB 550
Page 9
system to ensure that the price of the goods or service
registered by the computer is conspicuously displayed to the
consumer, along with any price reductions, taxes, surcharges and
the total amount of the transaction, and allowed for enforcement
by local governments.
7.Arguments in Support. California Alliance for Retired Americans
(CARA) writes that in the latest nationwide recall of more than
2,100 peanut butter products demonstrates the need for the bill.
CARA states that some of the 2,100 different types of products
could be miss-shelved by grocery store employees, thereby
increasing the potential for a customer to buy an item subject to
recall, and ultimately endangering more individuals.
Consumers Union writes in support and states that this measure
establishes a system which catches recalled food items before
they get into home pantries and are eaten by consumers. "A
recent national poll commissioned by Harvard University showed
that while 93% of Americans know about the peanut salmonella
outbreak, many are wrong about what products are involved. About
1 in 4 of those polled mistakenly think that national peanut
butter brands are involved in the product recalls, but fewer than
half worry about recalled snack bars, baked goods, ice cream and
dry-roasted peanuts."
8.Arguments in Opposition. California Grocers Association (CGA)
states that food safety is the top priority of California
grocers, and indicates that like consumers, grocers are situated
in a reactionary position with regard to food recalls. CGA
suggests that stores already do an exemplary job at removing
products from the shelf when recalls occur. CGA argues that the
bill "not only attacks the integrity of the grocery industry,
inappropriately shifting blame for food bourn illnesses onto
grocers, but it also creates an unworkable mandate that will
serve to undermine public safety and consumer confidence in the
state's food supply."
CGA continues that the bill requires all grocers utilizing scanner
technology at check-out to modify POS scanner systems to block
sale of any product involved in a recall. "Currently, products
are identified at point of sale using the UPC code; a code that
does not contain the same information as that used to identify
products to be recalled. For example, the UPC code does not
contain manufacture date or location, while product recalls very
frequently are based upon those and other factors. As a result,
grocers would be required to remove entire product lines from the
shelves, including products that are not subject to recall,
SB 550
Page 10
rather than only those products actually subject to recall."
CGA further argues that the bill applies to all recalls, even those
that are of a kind that pose no threat to human consumption.
"The sudden disappearance of broad food categories from store
shelves would serve to badly shake consumer confidence
unnecessarily," according to CGA.
CGA additionally suggests that the bill could actually endanger
public safety and California's food supply, by prompting
manufacturers to work to avoid a product recall if they know that
"even products not subject to a recall would be removed along
with recalled units. That delay could have the effect of
actually delaying removal of adulterated products for the stream
of commerce and from consumer pantries."
California Retailers Association (CRA) states that in standard
practice, retailers receive notification of a recall from the
manufacturer and retailers take appropriate action to remove the
recalled product from store shelves and to either quarantine,
destroy or return the product per manufacturer instructions.
According to CRA, some day technology will undoubtedly permit
retailers to do what this bill would require; however, right now
the bill is not feasible and will result in lost sales and
consumer confusion. Programmable checkout scanners read UPC bar
codes which were originally created to help grocery stores speed
up the checkout process and keep better track of inventory. CRA
states that because it was so successful, the system quickly
spread to all other retail products. The programmable checkout
scanner "reads" the UPC barcode as items are moved across the
scanners. "While the UPCs identify specific products and
specific product sizes they DO NOT identify lot numbers or sell
by dates ." CRA states: "In most cases, voluntary and mandatory
recalls are focused on specific lots or sell by dates. UPCs do
not provide that information and should not be relied upon to
identify product subject to a recall."
9.Policy Issues.
a. Can point of sale scanners adequately identify recalled
products? Both CGA and CRA argue that the bill asks the POS
systems to do something that they are not equipped to do;
identify specific lots of food products, or sell by dates on
products. They argue that instead of identifying specific
tainted product lots, the POS system can only identify the
SB 550
Page 11
broader product identification on the UPC. Ultimately, the
argument seems to be that the technology is not currently
adequate to do what this bill seeks to accomplish.
However, the Author contends that grocery stores such Kroger's
and Food 4 Less currently implements a food recall procedure
where a customer is alerted at the check-out register.
Staff notes that the new requirements of this bill will probably
require certain software or hardware changes to existing
automatic checkout systems. The requirements may even require
the development of new technologies.
In order to give time for the affected groups to develop the
required technologies, Committee staff recommends the Author
consider delaying the effective date of this mandate in order
for the development of the appropriate technology.
b. Clarify the term "grocery store." The Rosenthal-Roberti
Item Pricing Act of 1981(Civil Code 7100 ff.) establishes
the requirement for individual prices to be displayed when a
store uses a point of sale system. Those provisions refer to
a "retail grocery store or grocery department within a general
retail merchandise store." Section 7100 further defines
"grocery department" as an area within a general retail
merchandise store which is engaged primarily in the retail
sale of packaged food, rather than food prepared for immediate
consumption on or off the premises, and a "grocery store" as a
store engaged primarily in the retail sale of packaged food,
rather than food prepared for consumption on the premises.
Committee staff recommends the bill be amended to include these
terms, as defined in Section 7100 of the Civil Code, as
follows:
A grocery store retail grocery store or grocery
department within a general retail merchandise store, as
defined in Section 7100 of the Civil Code, that uses a
programmable checkout scanner shall ensure that when a
recalled product is scanned, the programmable checkout
scanner will notify the employee and customer that the
product being purchased is subject to a recall.
c. Clarify the term "programmable checkout scanner." Instead
of using the term programmable checkout scanner, the Business
and Professions Code as well as the Civil Code generally uses
SB 550
Page 12
the term "point of sale system."
Committee staff recommends amendments to refer instead to "point
of sale system."
SUPPORT AND OPPOSITION:
Support:
California Alliance for Retired Americans (CARA)
Consumers Union
Opposition:
California Grocers Association
California Retailers Association
Consultant:G. V. Ayers