COMMITTEE ON SMALL BUSINESS TOM STEED, Oklahoma NEAL SMITH, Iowa, Chairman JOHN D. DINGELL, Michigan JAMES C. CORMAN, California SILVIO O. CONTE, Massachusetts FERNAND J. ST GERMAIN, Rhode Island TIM LEE CARTER, Kentucky CHARLES J. CARNEY, Ohio HENRY B. GONZALEZ, Texas JAMES M. HANLEY, New York JOHN BRECKINRIDGE, Kentucky JOHN J. LAFALCE, New York BERKLEY BEDELL, Iowa FREDERICK W. RICHMOND, New York MARTY RUSSO, Illinois ALVIN BALDUS, Wisconsin RICHARD NOLAN, Minnesota RICHARD H. ICHORD, Missouri HENRY J. NOWAK, New York THOMAS A. LUKEN, Ohio JOSEPH A. LE FANTE, New Jersey DALE E. KILDEE, Michigan IKE SKELTON, Missouri WYCHE FOWLER, JR., Georgia M. CALDWELL, BUTLER, Virginia DAN MARRIOTT, Utah BERNARD LAYNE, Staff Director SUBCOMMITTEE ON SPECIAL SMALL BUSINESS PROBLEMS oct 78 Russo, Marty, chairman, Subcommittee on Special Small Business Prob- 25 175 1, 25, 175 Botty, William G., president, Independent Bakers Association; ac- companied by John H. Fox, chairman, W. E. Long Independent Bakers' Cooperative, Frank Manno, vice president, Schafer's Bak- eries, Inc., Edward J. Derst, president, Derst Baking Co., Max R. Cohen, president, Victory Baking Co., Robert N. Pyle, executive director, Independent Bakers Association, Dr. Simon S. Jackel, vice president, Quality Bakers of America Cooperative, Inc__ Gelardi, Vickie, president, Feingold Association of the United States; Hile, Joseph P., Associate Commissioner for Compliance; accompanied by Howard R. Roberts, Ph. D., Director, Bureau of Foods, Taylor M. Quinn, Acting Associate Director for Compliance, Bureau of Foods, and Stephen McNamara, Acting General Counsel, Food and Drug Kappeler, Susan, on behalf of the Virginia Citizens Consumer Coun- 183 182 Whalen, Hon. Charles W., Jr., a Representative in Congress from the 176 Additional material supplied for the hearing record— Correspondence, comments, and statements subsequently received____ 191 186 (III) FOOD AND DRUG ADMINISTRATION'S FOOD LABELING REGULATION: ITS EFFECT ON SMALL BUSINESS WEDNESDAY, JULY 13, 1977 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON SPECIAL SMALL BUSINESS PROBLEMS OF THE COMMITTEE ON SMALL BUSINESS, Washington, D.C. The subcommittee met at 9:35 a.m., pursuant to notice, in room 2359, Rayburn House Office Building, Hon. Marty Russo (chairman of the subcommittee) presiding. OPENING STATEMENT OF CHAIRMAN RUSSO Mr. Russo. This morning's hearing will be devoted to a new subcommittee investigation, the effect of the Food and Drug Administration's proposed labeling regulation on the Nation's smaller bakeries. We have with us a panel of bakers from throughout the Nation who will discuss the regulation issue by issue. The decline in recent years of the number of small, independently owned bakeries in this country is deplorable and a loss to the individual free enterprise spirit of America. If Government regulations are contributing to this decline, then this subcommittee wants to know about it so corrective action can be taken. In promulgating regulations, the Food and Drug Administration has been known before only to take into consideration the effect their regulations would have on the Nation's largest manufacturer. If this is the case with the labeling regulations, or any other FDA regulations, then the effect will be to drive more small bakeries out of business without providing an overriding benefit to consumers. Small, single plant bakeries have complained to the Small Business Committee that the effect of the Food and Drug Administration's regulations requiring that all bakery product ingredients be listed on the wrapper by full chemical name will be relatively meaningless to consumers and will put the small baker at a disadvantage. The small baker will be forced to either materially increase his inventory of packaging materials or lose his essential flexibility for changing ingredients to cover for shortages and stabilize prices. We have with us a panel of five members: Mr. William Botty of Fort Lauderdale, Fla.; John Fox from Chicago, Ill.; Frank Manno of Lansing, Mich.; Mr. Edward Derst from Savannah, Ga.; and Mr. Max Cohen from Jersey City, N.J. I believe Mr. Botty will be our first witness. TESTIMONY OF WILLIAM G. BOTTY, PRESIDENT, INDEPENDENT BAKERS ASSOCIATION; ACCOMPANIED BY JOHN H. FOX, CHAIRMAN, W. E. LONG INDEPENDENT BAKERS' COOPERATIVE; FRANK MANNO, VICE PRESIDENT, SCHAFER'S BAKERIES, INC.; EDWARD J. DERST, PRESIDENT, DERST BAKING CO.; MAX R. COHEN, PRESIDENT, VICTORY BAKING CO.; ROBERT N. PYLE, EXECUTIVE DIRECTOR, INDEPENDENT BAKERS ASSOCIATION; DR. SIMON S. JACKEL, VICE PRESIDENT, QUALITY BAKERS OF AMERICA COOPERATIVE, INC. Mr. BOTTY. Mr. Chairman, my name is William G. Botty, president of the Independent Bakers Association, Inc., a trade association headquartered in Washington and representing the small and medium sized wholesale bakers in the United States. My testimony today, however, is in my capacity as vice chairman of the Labeling Committee of the Independent Bakers Association. IBA's membership represents over 45 percent of the U.S. wholesale bread production. On January 1, 1978, the wholesale bakery industry faces a catastrophe with serious consequences for the industry, its allied trades and the consuming public. Specifically, we face a regulation from the U.S. Food and Drug Administration 21 CFR 101.4; formerly 21 CFR 1.10, requiring that all bakery product ingredients be listed on the wrapper by full chemical name unless the "common" or usual name has been approved by FDA. Mr. Chairman, none of us in the baking industry can argue with the intent of this order, to disclose fully and completely the ingredients of our products. It is when one examines in detail the implications of this order, however, that we feel it is self-defeating for the consumer by labeling with confusing and even frightening or scary sounding names. Equally, the economic implications are disturbing and damaging, particularly for the independent baker, already struggling to survive under a constant barrage of FDA redtape and regulations. Let's look, ingredient by ingredient, at the effect of this order on a pound loaf of enriched white pan bread or rolls, the most commonly used bakery products. Before I go any further, sitting on my right is Dr. Simon S. Jackel, who is a cereal chemist who will help me pronounce names so that you will know the correct pronunciation. Mr. Russo. If I have a problem, I will ask Mr. Conte to help me out. Mr. BOTTY. No. 1. Flour: The milled grain itself is a variable commodity and is not always the same. FDA approved processing additives are used by all mills to compensate for wheat variability and vary widely, including fungal amylase and proteases, and would have to be listed on the label by their chemical names. By this first step, Mr. Chairman, the baker is restricted by his millers' processing with damaging economic effect. Since our hypothetical bread and rolls may use enriched flour, the new FDA regulations will require us to list on each package the enrichment used by chemical name and its source. Thus, gentlemen, a miller who adds vitamin B, will require the baker to use on his label "thiamine" and the source, either "thiamine hydrochloride" or "thiamine mononitrate." |