Download Food Laws and the Market and Distribution Systems

Food Laws and the Market
and Distribution Systems
Chapter 2
Objectives
• Explain the flow of goods through the
market or distribution channel
• Identify the major sources from which
food and products originate
• Describe the various intermediaries
used in delivering food and products to
food service operators
Objectives (cont’d.)
• Distinguish among the different values
added in the distribution channel
• Define the different forces affecting the
distribution channel
• Explain the function and business of the
market
Objectives (cont’d.)
• Identify the laws and agencies involved
in protecting consumers and the food
service industry, including the:
– Organic Foods Production Act of 1990
– Nutrition Education and Labeling Act
Marketing Channel
• Buyer acquires food through exchange
of goods in marketing channel
– Also called distribution channel
• Three components of the channel
– Sources
– Intermediaries
– Markets
Sources
• Sources are where things begin
– Growers
• Ranchers, farmers, fishermen
– Fabricators (processors)
• Take raw food and process it further
– Manufacturers
• Create new products by combining goods from
growers and processors (e.g., fruit cocktail)
Intermediaries
• Middlemen in between sources and
food service operators or buyers
– Merchant wholesalers
– Brokers
– Manufacturer’s representatives or agents
– Importers
– Dealers
Intermediaries (cont’d.)
• Intermediaries add value to product
– Form value
• Changes the form of the product
– Time value
• Obtaining the product just before it is needed
– Place value
• Product delivered to buyer’s place of work
Intermediaries (cont’d.)
• Intermediaries add value to product
(cont’d.)
– Information value
• Assistance with recipe development is an
example of informational services offered
Intermediaries (cont’d.)
• Forces that affect the distribution
channel
– Supply and demand
– Weather
– Other forces
• Political, ethical, legal, technological, and
intangible
Markets
• Giant supermarkets replaced fresh food
marketplaces about 50 years ago
• Coming into favor in recent years
– Farmer’s markets, e-commerce retailers,
group purchasing organizations, wholesale
clubs, and community-supported
agriculture
U.S. Code, Federal Agencies,
and Food Laws
• The U.S. has various agencies that
regulate the food supply
• The U.S. code is a compilation of laws
up to January1996
U.S. Department of Agriculture
(USDA)
• In charge of inspection and safety of all
meat, poultry, and egg products
• Researches human nutrition and
suggests daily requirements
• Opens international markets for U.S.
agricultural products
• Social programs
U.S. Department of Agriculture
(USDA) (cont’d.)
• Safe drinking water to rural communities
• Food Safety and Inspection Services
(FSIS) is a division of USDA
– Inspection is mandatory
– Grading is voluntary
• Processing plants are following newer
rules
U.S. Department of Agriculture
(USDA) (cont’d.)
• All meat inspected by FSIS has round
purple stamp on carcass and major cuts
• USDA grading
– Inspection of meat is mandatory, but
grading is voluntary
– Standardized across the nation
• LCPS: consumer protection
U.S. Department of Agriculture
(USDA) (cont’d.)
• Federal Organic Foods Protection Act
– Passed in 1990
– Regulates guidelines for organic food
production
• Country of Origin Label (COOL)
– Law passed in 2009 requires labeling as to
where product originated
Food and Drug Administration
(FDA)
• Responsible for nutritional labels on
many products
• Bioterrorism Act of 2002
– Addresses safety and security of food and
drug supplies, drinking water and supplies
• Regulates food labeling with respect to
health claims
Food and Drug Administration
(FDA) (cont’d.)
• Laws related to nutrition and labeling
– Fair Packaging and Labeling Act
– Nutrition Labeling and Education Act
– Federal Food, Drug and Cosmetic Act
– Food Allergen Labeling and Consumer
Protection Act of 2004
U.S. Federal Trade Commission
(FTC)
• Independent agency of U.S.
government
– Mission is to protect consumers and
eliminate anticompetitive business
practices
– Requires that Web advertisements be
more accurate in product representations
Uniform Commercial Code (UCC)
• Series of laws that regulate sales and
other commercial transactions
– Especially for goods and services that
cross state lines
• Regulates processing checks, notes,
and other commercial papers
Environmental Protection Agency
(EPA)
• Created in 1970 to protect human
health and the environment
– Researches and sets national standards
for environmental programs
– Regulations affect the drinking water
supply and use of fertilizers and additives
Summary
• The distribution channel is made up of
sources, intermediaries, and markets
• Form, time, place and information value
are added through the chain
• Supermarkets, farmer’s markets, and
other types of markets exist
Summary (cont’d.)
• A variety of U.S. agencies regulate the
quality, inspection and labeling of food
• Many laws have been passed to protect
the consumer
– Nutrition labeling
– Country of origin
– Food allergen information