National Advisory Committee on
Meat and Poultry Inspection
November 14 - 15, 2001
Issue Paper: Retail Exemption for Processing
The Committee has asked the Agency to reexamine it policy regarding
retail exempt operations. The purpose of this presentation is to provide
the Committee with an understanding of the Agency’s new thinking on
retail exempt status for meat and poultry processing operations. The
Agency now believes that its current policy of exempting from inspection
operations that produce certain amounts of meat and poultry products for
sale to hotels, restaurants, and similar institutions does not advance
the purpose of the Acts, i.e., some meat and poultry prepared and
processed for wholesale sales is not subject to inspection. Inspection
of meat and poultry products prepared and processed for wholesale sale
is required under the Federal Meat Inspection Act and the Poultry
Products Inspection Act.
Generally, operations that prepare meat products or process poultry
products are subject to inspection.
- However, preparation or processing activities that have
traditionally and usually been conducted at retail stores and
restaurants, where meat and poultry is sold to individual consumers in
normal retail quantities, are exempt from inspection. Meat and poultry
products produced without inspection are subject to the adulteration
and misbranding provisions of the Acts-except for the requirement of
the inspection legend.
- The types of operations traditionally or usually conducted at a
retail establishment are:
- Cutting up, slicing, and trimming carcasses;
- Grinding and freezing meat products;
- Curing, cooking, smoking, rendering or refining of livestock fat,
- Breaking bulk shipments of product;
- Wrapping or rewrapping product.
- Types of operations that have not been traditionally or usually
conducted a retail establishment are:
- By regulation, FSIS exempts from inspection operations that produce
meat and poultry product for sale to hotels, restaurants, and similar
institutions (HRI) if
--75% of total sales (in terms of dollar value) of product represent
sales to household consumers, and
--the total dollar value of sales of product to consumes other than
household consumers does not exceed a dollar limitation set each
calendar year by the Administrator.
- In response to a recommendation by this committee, and based on its
review of the situation, the Agency’s new thinking is that it should
eliminate the "HRI" policy explained above. This policy does not
advance the purpose of the Acts to ensure food safety. Foods are
prepared or processed for wholesale without the protections provided by
inspection or consumer observation (i.e., consumers can make general
determinations about the sanitary conditions and processing practices
in retail stores and restaurants they frequent). It is also troublesome
because it creates inequalities for small wholesalers who bear the cost
of inspection while competing large retailers do not.
- The Agency ‘s new thinking is that it should only exempt from
inspection the preparation of meat products and the processing of
poultry products if: (1) preparation and processing are performed at a
retail store, restaurant, or similar retail-type establishment that
performs operations of the types that have been traditionally or
usually conducted at a retail establishment and: (2) if the
establishment sells product in normal retail quantities at the same
price, terms, and conditions available to all consumers.
No longer define as a retail store one that
may make up to 25% of its total sales in terms of dollar value of
product to non-household consumers.
Define retail sales of meat and poultry
products as any sales of normal retail quantities in which all product
is available to all consumers at the price, and under the terms and
conditions, as sales to household consumers.
What is the Committee’s reaction to the
Agency’s new thinking?
Are there additional factors or concerns
that should be considered by the Agency in revising this policy?
How many now exempt firms would be place
under inspection as a result of this revision? How many establishments
now under inspection would be exempted from inspection as a result of
What would the expected impact on state
inspection and regulatory programs be?
John O’Connell (202) 720-0345
Matthew Michael (202) 205-7788
Office of Policy, Program Development and Evaluation
Room 112 Cotton Annex
1400 Independence Ave., SW
Washington, D.C. 20250-3700