FDA Announces New Inspection Fees

By Mike Rozembajgier

In an effort to fully implement the Food Safety Modernization Act (FSMA), the Food and Drug Administration (FDA) has announced that it will charge food manufacturers and importers higher fees to cover inspection and holding costs.  These fees—set to take effect on October 1—will be a considerable burden for food manufacturers and should encourage better compliance and help prevent future recalls.

According to The Packer, the new rate for work performed by the FDA is $224 per hour.  If the work is overseas, the rate will be $335 per hour, plus some international travel expenses.  These fees can equate to a “$1000 to $2000” bill plus “a substantial delay” in shipment, just for having a product detained, without any additional inspections.

These increased fees, along with a lowering of the burden of proof required to initiate an investigation, have industry experts worried.  Such high costs—sometimes with little to no notice—will inevitably affect the prices consumers see in the grocery store.  Industry knowledge and communication regarding this change is also of concern.  The Packer writes that, “many food and agricultural trade organizations aren’t letting their members know the extent of industry obligations…and the steep fines they face if they are out of compliance.”

This lack of awareness may keep FSMA from being successful.  The best way to avoid paying a big fine is to ensure that all the facilities and ingredients in your supply chain meet federal regulatory standards. By keeping members in the dark, trade organizations are preventing them from making the necessary updates and improvements required to meet the new standards.  This means that members may have to pay fines and have shipments delayed because of problems that could have been prevented.

At the same time, the threat of higher fines and fees will increase the pressure on manufacturers to ensure product safety.  Managing a recall is already an expensive process, and increased fees from the FDA will only add to the cost.  This alone should be an incentive for companies to enforce best practices throughout their supply chain.

These new fees are also intended to help support improvements in the FDA oversight process.  Full implementation of the FSMA is falling prey to budget cuts.  By lifting some of the burden from the shoulders of taxpayers (who are also the main consumers) and placing it on the manufacturers, the FDA has found a reasonable way to solve at least some of its budget problems.

If enforced in a comprehensive manner, the new fees will bring the FDA one step closer to acheiving its primary goal of ensuring consumer safety and limiting the number of recalls.

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