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New U.S. meat label rule survives challenge by meat packers

By Charles Abbott

WASHINGTON (Reuters) - A U.S. district judge refused on Wednesday to stop the government from requiring labels on packages of beef, pork, poultry and lamb sold in U.S. stores to include more specific information about the meat's country of origin.

U.S. meat packers said the latest country-of-origin labeling (COOL) rule will drive up their costs and become a bookkeeping nightmare. But in a victory for the U.S. Department of Agriculture, District Judge Ketanji Brown Jackson denied their request for a preliminary injunction.

Canada and Mexico are challenging COOL before the World Trade Organization as a U.S. trade barrier. They prevailed in an earlier WTO case against COOL, which led to the revised regulation issued in May and now under dispute.

"We are going to be faithful to the rule," U.S. Agriculture Secretary Tom Vilsack told a farm delegation early this week. "It's a battle we are going to continue to fight."

The current WTO challenge will not be resolved until 2015, Vilsack said, because of procedural time frames and likely appeals of preliminary rulings.

The meat packers' lawsuit against COOL remains alive although Jackson rejected the request for a preliminary injunction. The judge said the industry failed to show it would suffer irreparable harm if COOL was in effect while the case being decided.

Congress approved COOL in 2002 but it did not become mandatory until March 2009. Consumer groups hailed the labels as part of consumers' right to know the source of their food, while food makers said COOL could disrupt marketing patterns.

Canada and Mexico said the initial U.S. rule discriminated against imported livestock and helped drive down cattle and hog shipments from those countries by as much as 50 percent in four years. WTO ordered the United States to revise its regulations by May of this year.

The latest rule requires more specific labels. Each package must identify where the animals that yielded the meat were born, raised and slaughtered. All the meat in a package must come from the same source, ending the practice of commingling for everything except ground meat.

When it issued the latest rule, USDA said it would allow six months for compliance. It estimated the 7,200 processors and retailers would spend from $53 million to $192 million in "total adjustment costs" to adapt to the new, more detailed labels.

As an example of how the rule works, USDA said roasts from cattle raised in Mexico for slaughter in the United States would say, "Born and raised in Mexico, slaughtered in the United States." Imported meat would be tagged as a "Product of" the originating country. Chicken breasts from U.S. birds would be labeled, "Born, raised and slaughtered in the United States."

The U.S. Cattlemen's Association, which supports COOL, said if the preliminary injunction had been approved, the United States would have been placed in violation of the WTO ruling. It said COOL will allow U.S. producers "to differentiate their product."

The American Meat Institute, the trade group for meat packing companies and the lead plaintiff in the lawsuit, was not immediately available for comment.

(Reporting by Charles Abbott; Editing by Ros Krasny and Bob Burgdorfer)

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