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Food Importers Mobilize to Oppose FDA Fees

The U.S. Food and Drug Administration (FDA) may be hitting another hurdle in the effort to fund its new responsibilities under the Food Safety Modernization Act. 

FDAImports.com, LLC, a consulting firm for food and drug importers, is building a coalition of domestic importers and foreign food manufacturers to oppose a proposed import re-examination fee, intended to help pay for inspection costs.

The coalition hopes to mobilize businesses to submit comments on the proposed rule, which would allow FDA to collect a fee on food importers if inspectors have to re-examine shipments for a food safety concern. Some importers are worried the rule will be interpreted so loosely it will have a broad impact on the industry.

“We know that importers are small businesses, we know that foreign manufacturers don’t really understand the political machine at FDA, and so we wanted to provide a place where your voices could be heard,” says FDAimports.com founder Benjamin England in a launch video, which calls on businesses to form a coalition to fight FDA’s “imported food tax.”

As England explained recently in a blog post: “FSMA requires FDA to conduct two examinations of imported food before FDA is authorized to charge a fee for services related to the second and subsequent examinations. Unfortunately for importers, FDA has so broadly defined what constitutes the “first examination” that virtually every imported food shipment detained for an apparent food safety reason will become subject to the new FDA tax (oops) … re-examination fee. U.S. food importers, most of them small businesses, will be charged $224 per hour (plus expenses) for any such re-examinations. Those expenses will be passed on to consumers resulting in a dramatic increase to food costs in the USA.”

According to FDA, the proposed regulation would allow the agency to flag non-compliance and the fee would help reimburse the resources needed to ensure non-compliance has been corrected. The fee schedule, posted in the Federal Register earlier this month, will take effect Oct 1, 2011 and extend to Sept 30, 2011. Comments on the fees will be accepted until Oct 31, 2011. The agency says it will use the comments in implementing fees in FY 2013.

David Acheson, a consultant at Leavitt Partners, who formerly served as an FDA official, agrees that fees wills some impact, but points out that the agency needs the money to meet the FSMA mandate.

“FDA has taken the fee gathering requirements to the limit –  and these will impact importers under certain situations such as reconditioning of a refusal, review of import alert data, getting off an import alert or destruction of a product,” explains Acheson, in an email response to Food Safety News. “Currently this is going to impact all business regardless of size and FDA is required to (and has) request public comment on the fees for FY 2013.”

“I think there is some scare mongering going on to some extent and I don’t believe that these fees will impact a huge number of imported products but select ones in specific situations as outlined in the FR notice,” adds Acheson. “Bottom line – FDA is short of funds and they have taken this to the limit of the new authority – time will tell if they have gone beyond their authority.”

Under FSMA, FDA is required to dramatically increase oversight of food imports–and double foreign food facility inspections each year for five years–but the outlook on funding for the agency is bleak. The House appropriations bill that passed in June would not give the agency the funds that the Congressional Budget Office estimated would be needed to implement the new law. The budget bill calls for a $285 million cut to the agency, $87 million of which would impact food safety.

The Senate has yet to act on a budget outline for FDA.

Photo Courtesy of U.S. Minit

© Food Safety News
  • Stephanie Ostrowski

    Clarification question regarding apparent type in the 6th paragraph: “The fee schedule, posted in the Federal Register earlier this month, will take effect Oct 1, 2011 and extend to Sept 30, 2011. Comments on the fees will be accepted until Oct 31, 2011. The agency says it will use the comments in implementing fees in FY 2013.”
    When would the fees extend to? What year?
    (As printed in the article, the end of the period is 30 days before it is scheduled to take effect.)
    Clarification would be appreciated.

  • Don Gordon

    It appears these “new” fees will only apply to entries found in violation of FDA requirements. Firms submitting products in violation of laws should totally bare the cost of bringing them into compliance, not FDA and the taxpayer. It’s simple, to avoid the new fees, importers only need to enter products that are not misbranded or adulterated. In addition, this is not breaking new ground. FDA currently collects fees for supervision of re-conditioning detained articles and also collects fees for additional analysis. The fees, however, are sent to CBP. Under the new regs, it appears the fees will go to FDA and rightfully so.