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Facing a US market shutout, pangasius suppliers race to meet inspection deadline

Enforcement of new catfish inspection program starts Sept. 1. Will Vietnam be ready?

Despite building opposition from lawmakers, the US Department of Agriculture’s (USDA) new program for catfish inspection will go into effect this year, requiring domestic and international companies -- namely pangasius sellers from Vietnam -- to meet USDA regulations.

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The inspections were transferred from the US Food and Drug Administration (FDA) on Dec. 2, 2015, when the final rule was published.

The Food Safety and Inspection Service (FSIS) explained in its 2016 presentation the FDA did not inspect before commerce nor has marks of inspection, while the USDA "must approve labels of products before they are applied" and "must find product truthful, not misleading, and containing the requisite information."

The new ruling applies to the class of fish known as Siluriformes, which includes both catfish and pangasius, and will affect virtually everybody dealing in the species.

"They will expect anyone who processes this fish to be in full compliance of the USDA regulation -- imported or domestic, for anyone who processes the fish or does another process, such as a value-added process like breading," Lisa Weddig, VP of Technical and Regulatory Affairs for the National Fisheries Institute (NFI) told IntraFish.

She said this includes even those who buy a 50-pound box of catfish fillets and repackage it into two 25-pound boxes.

Domestic deadline

The regulation goes into effect March 1 for domestic processors, and they have until Sept. 1 to comply.

"In the US, there are two levels of facilities, plants that harvest and process whole live fish and those that reprocess or repackage," Weddig told IntraFish.

Primary processors will need to have an FSIS inspector present during all hours of operation and secondary processors need one present on at least a quarterly basis.

Weddig said there are plenty of changes, including "new labels as well as sanitation and more. Right now there's an inspector at plants to help them transition to the USDA regulations by Sept. 1."

The only facilities not included in this ruling are "box-in, box-out," said Weddig, giving the example of a company that sells boxed product as-is without any changes, processing or re-packaging.

Imports

From April 15 to Sept. 1, the USDA will implement an interim re-inspection strategy as part of the transitional period for imported fish and fish products. This system includes re-inspection and residue testing on at least a quarterly basis.

Weddig said foreign governments looking to export to the United States need to submit an application by Sept. 1 to the USDA showing their regulatory system is equivalent to USDA regulations.

The USDA said foreign exporting countries need to submit through a self-reporting tool (SRT):

  • a complete list of eligible establishments
  • documentation showing their authority to regulate the growing and processing of fish for human food as well as other consumer protection regulations (e.g., inspection system operation, product standards and labeling, and humane handling)
  • documentation assuring FDA compliance with Hazard Analysis and Critical Control Point (HACCP) plans, Sanitation Control Procedures, chemical residues testing programs and government microbiological testing programs.

After the foreign government submits its application, the USDA reviews the documents followed by back-and-forth discussions with the foreign country, said Weddig.

After these discussions, the USDA will then go to that country to implement an audit, in which it examines  "everything, from plants, facilities to the labs." This audit is followed by more back-and-forth discussions and reporting before settling on a proposed rule open for public comment on the the federal register.

The countries would be allowed to export to the United States during this process, which "is a different approach than what the USDA typically does," Weddig told IntraFish.

Even after a country is approved to export to the United States, "all imported shipments of Siluriformes fish...will [still] be required to be presented for re-inspection" after Sept. 1, according to the USDA.

FSIS has about 70 import inspectors to carry out re-inspection at about 120 official import inspection establishments, according to the USDA.

After the USDA grants a country equivalence, the foreign country needs to update or verify its SRT responses annually by May 18. This includes any changes in that country's food safety inspection system, "whether the change is a result of the country’s changes or the US implements new policies."

As of Sept. 30, the USDA's list of official import inspection establishments approved for siluriformes includes:

  • Argo Merchant Group, Inc
  • Quality Foods
  • Preferred Freezer Service
  • TC Trading Company INC

The country impacted the most is Vietnam.

The US market accounts for 20 percent of Vietnam’s production, worth some $400 million, according to the whitefish panel at this year's NFI GSMC.

“It’s a very important market,” one Vietnamese executive said during GSMC. “It has a higher moral compass, so in a sense it helps our industry in a better direction.

“We’ll give everything we have to keep trade continuing to this market.”

Last year, the United States imported 136,809 metric tons worth $405.6 million (€380.3 million), a 20 and 15 percent increase in volume and value, respectively compared to 2015, according to the latest figures from the National Marine Fisheries Service (NMFS).

Vietnam accounted for 96 percent of the total imported volume: 131,411 metric tons worth $367.6 million (€344.7 million) last year, a 21 and 15 percent increase in volume and value, respectively. Most of its exports to the United States is in the form of frozen pangasius fillets.

As of Jan. 5, Vietnam submitted equivalence documentation to the FSIS putting forward 62 establishments as eligible to export siluriformes to the United States, including:

  • Agifish
  • Vinh Hoan
  • Navico
  • Hung Vuong
  • Godaco
  • Cadovimex
  • CP Vietnam

Here's a look at the US imports of pangasius from Vietnam since 1995, according to NMFS.

 

 

For or Against it?

The rule has been widely viewed as a political move to protect domestic catfish interests, and has been opposed by the NFI and some US representatives, including, notably, Senator John McCain of Arizona.

McCain called the program "one of the most brazen and reckless and protectionist programs that I have encountered in my time as the US Senate."

"Members of the seafood community can expect from this program a disruptive, duplicative waste of tax dollars that has nothing to do with food safety and everything to do with impeding trade," said NFI spokesperson Gavin Gibbons.

Lawmakers are currently pushing for a bill that would return catfish inspections to the FDA.

Meanwhile, the controversial fish is facing headwinds in other markets, with some major retailers deciding to drop the fish from its shelves.

A number of Italian supermarkets decided to halt sales of pangasius recently, and retail giant Carrefour announced it is to stop selling pangasius at its supermarkets in Spain and Belgium.

Several execs said they were unclear during GSMC what would replace pangasius if it gets shut out from the US market.

“I just truly think people don’t understand what’s going to happen here,” said one foodservice executive.

However, despite numerous barriers from its major importing countries, Vietnam’s seafood sector is still optimistic it will be able to boost seafood exports in 2017.

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