[Federal Register Volume 64, Number 198 (Thursday, October 14, 1999)] [Notices] [Pages 55694-55695] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-26733] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Food Safety and Inspection Service [Docket No. 99-041N] Exemption of Retail Store Operations From Inspection Requirements AGENCY: Food Safety and Inspection Service, USDA. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: The Food Safety and Inspection Service (FSIS) is publishing this notice to advise interested persons of a change in the application of the requirements for inspection under the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA). The United States Court of Appeals for the District of Columbia Circuit recently decided that retail stores exempt from federal inspection requirements do not become subject to those requirements when they supply their own kiosks with cooked hams and cooked turkeys that the retail stores have sliced, glazed, and packaged. As a result, inspection under the FMIA or the PPIA is not required if an otherwise exempt retail store transports products such as these to additional locations before it sells them to consumers. FSIS is reviewing its regulations on the exemption of retail operations from requirements for inspection under the FMIA and the PPIA. After completing this review, the Agency intends to initiate notice-and-comment rulemaking on the application of these requirements and on the handling conditions necessary to ensure that products delivered to consumers are not adulterated or misbranded. FOR FURTHER INFORMATION CONTACT: Philip Derfler, Deputy Administrator, Office of Policy, Program Development and Evaluation, Food Safety and Inspection Service, Washington, DC 20250-3700; (202) 720-2710. SUPPLEMENTARY INFORMATION: The Food Safety and Inspection Service (FSIS) administers a regulatory program under the Federal Meat Inspection Act (FMIA) (21 U.S.C. 601 et seq.) and the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451 et seq.) to protect the health and welfare of consumers by preventing the distribution of products that are unwholesome, adulterated, or misbranded. Both the FMIA and the PPIA include requirements for federal inspection, and they prohibit selling or transporting, offering for sale or transportation, or receiving for transportation, in commerce, products that are adulterated or misbranded and products required to be inspected unless they have been inspected and passed (21 U.S.C. 458(a)(2) and 610(c)). Intrastate operations and transactions are effectively subject to the same requirements and prohibitions, pursuant to a State inspection program or designation for federal inspection (21 U.S.C. 454(c)(1) and 661(c)(1)). In The Original Honey Baked Ham Company of Georgia, Inc. v. Glickman, et al., 172 F.3d 885, 886 (D.C. Cir. 1999), the United States Court of Appeals for the District of Columbia Circuit decided that Honey Baked Ham retail stores that are exempt from federal inspection requirements do not become subject to those requirements when they supply their own temporary kiosks (booths with refrigeration units) with cooked hams and cooked turkeys that the retail stores have sliced, glazed, and packaged. According to the Court of Appeals: * * * That the company's retail stores supply temporary kiosks during holiday seasons does not * * * transform them into ``hybrid retail/wholesale'' establishments to which the federal inspection requirements apply. A wholesaler does not sell to the ultimate consumer; a wholesaler is a middleman who sells to a retailer. To the extent that Honey Baked Ham's retail stores supply the company's kiosks, they still do not fit within the category of ``wholesalers.'' The stores do not sell their products to the kiosks; the kiosks are simply an extension of the stores' retail operations. According to the * * * Department's own regulations, the company's stores fit within the description of retail establishments, kiosks or not. Their operations, of the sort ``traditionally and usually conducted at retail stores,'' will not change when they supply kiosks. The stores glaze, slice and package products. See 9 CFR Secs. 303.1(d)(2)(i)(a), (c), (e), 381.10(d)(2)(i). They sell to consumers only, not to retailers. See 9 CFR Secs. 303.1(d)(2)(iii)(a), 381.10(d)(2)(iii)(a). They use meat and poultry products that are federally- or State-inspected and passed. See 9 CFR Secs. 303.1(d)(2)(iii)(c), 381.10(d)(2)(iii)(c). * * * [T]here is no indication that [Honey Baked] sales * * * will exceed normal retail quantities. See 9 CFR Secs. 303.1(d)(2)(ii), 381.10(d)(2)(ii). Because the company's retail stores will not lose their retail character or become ``similar'' to wholesale establishments when the kiosk system is fully implemented, the stores are not required to submit to federal inspection. 172 F.3d at 889. Therefore, otherwise exempt retail store operations do not become subject to inspection requirements because a retail store transports products such as these to additional locations for sale to consumers. Retail stores that believe their operations have been subjected to federal inspection solely because they transport products to additional locations before sale may request that inspection be terminated. (The request should be directed to the district office for the district in which a store is located.) The Agency is informing State inspection program officials, as well as FSIS personnel, of this change. In addition, FSIS is reviewing its regulations on the exemption of retail operations from requirements for inspection under the FMIA or the PPIA. After completing this review, the Agency intends to initiate notice-and-comment rulemaking on the application of these requirements and on the handling conditions necessary to ensure that products delivered to consumers are not adulterated or misbranded. (See 21 U.S.C. 454, 455, 463(a), 464, 603 through 606, 623, 624, and 661.) Additional Public Notification Pursuant to Departmental Regulation 4300-4, ``Civil Rights Impact Analysis,'' dated September 22, 1993, FSIS has considered the potential civil rights impact of this notice on minorities, women, and persons with disabilities. FSIS anticipates that this notice will not have a negative or disproportionate impact on minorities, women, or persons with disabilities. However, notices generally are designed to provide information and public awareness of policy developments is important. Consequently, in an effort to better ensure that minorities, women, and persons with disabilities are aware of this notice, FSIS will announce the publication of this Federal Register notice in the FSIS Constituent Update. FSIS provides a weekly FSIS Constituent Update, which is communicated via fax to over 300 organizations and individuals. In addition, the update is available on line through the FSIS web page located at http://www.fsis.usda.gov. The web page is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, recalls, and any other types of information that could affect or would be of interest to our constituents/stakeholders. The constituent fax list consists of industry, trade, and farm groups, consumer interest groups, allied health professionals, scientific professionals, and other individuals that have requested to be included. Through these various channels, FSIS is able to provide information to a much broader, more diverse audience. For more information and to be added to the constituent fax list, fax your request to [[Page 55695]] the Congressional and Public Affairs Office, at (202) 720-5704. Done at Washington, DC, on: October 6, 1999. Thomas J. Billy, Administrator. [FR Doc. 99-26733 Filed 10-13-99; 8:45 am] BILLING CODE 3410-DM-P