FDA says Kraft Foods breaks rules Use of milk protein concentrate blamed for low U.S. dairy prices

PITTSFIELD – Last November, as Maine’s dairy farmers were struggling with milk prices at a 20-year low, industry members were blaming the importation of milk protein concentrate, or MPC, for contributing to their economic woes.

By replacing U.S. milk in products such as energy drinks, cheeses and baby formula with the imported powder, companies such as Kraft – the country’s largest MPC user – were blamed for devaluing domestic milk.

After scrutinizing the use of MPC in this country, the U.S. Food and Drug Administration recently charged Kraft Foods with violating federal regulations regarding its use of the substance in products such as Kraft Singles, Kraft Macaroni and Cheese, and Velveeta. The FDA found Kraft’s labeling practices failed to conform to government requirements for cheese products. Certain cheeses, such as cheddar, are strictly defined by the FDA and cannot contain MPC.

The Dec. 18 letter from the FDA marks a victory for farm activists who have been lobbying the agency to crack down on imports of MPC and its illegal use in some products. The charges, however, will not affect MPC import levels as Kraft has announced it will continue to use MPC but will change the labels on its products to comply with FDA regulations.

The Dairy Trade Coalition describes MPC as skim milk that has been concentrated by ultrafiltration to retain most of the protein while removing much of the water and some of the lactose, ash and other solids. For some applications, it is used as a liquid and called ultrafiltered milk. For others, it is dried for use as a powder and is called MPC. The liquid and dry forms are identical in composition.

Maine’s congressional delegation and agriculture officials continue to lobby for a tariff on imported MPC.

U.S. Sen. Olympia Snowe was a co-sponsor of MPC tariff legislation during the 107th Congress, but the proposal became mired in committee and as Congress’ attention was diverted by homeland security issues, Congress adjourned without taking any action.

David Lackey, spokesman for Snowe, said Monday that a tariff bill will be resubmitted during this year’s session and that in her role on the Finance Committee, Snowe will “be taking a leadership role” in promoting that legislation.

“Senator Snowe believes this proposal to have real merit and that it is a genuine way to really help Maine dairy farmers,” said Lackey.

“Foreign exporters are circumventing trade laws, causing [use of] milk protein concentrate to surge more than 600 percent in the past six years,” said Snowe in a prepared statement. “I hope [a tariff] can assure a fairer return on milk prices for farmers in Maine and the United States.”

The FDA notification is addressed to Kraft President and CEO Betsy Holden and reports that inspections of Kraft manufacturing facilities in Minnesota, Illinois and Missouri found MPC was being used in products not approved for its use. “Our inspected observations and review of certain labeling … found serious violations,” FDA wrote to Kraft, and said the products containing MPC were “misbranded.” Kraft was given 15 working days to reply to the charges.

However, Kraft spokeswoman Kris Charles told the Bangor Daily News two months ago that it would be changing its labels so that products not allowed to contain MPC no longer would fall into regulated categories.

“Since we had already planned to change the label to reflect additional calcium,” Charles said, “we are also taking this opportunity to update the label with a new generic description, ‘pasteurized prepared cheese product.’ This labeling change is consistent with recent statements from the FDA clarifying its position on the use of [MPC] in standardized cheese products.”

Charles said Monday that the labeling change has been accomplished and some new labels “are already on some store shelves.” She said Kraft had informed the FDA before receiving the mislabeling letter that the labels were being changed and she attributed the notification to “due diligence” by FDA.

Although Maine consumes most of the milk it produces, it does export milk and it does compete for price on the open market.

MPC displaces up to 25 percent of the domestic milk that otherwise would go into cheese production, say industry experts, and is imported from 33 countries. The U.S. General Accounting Office said 805 metric tons were imported in 1990, while 44,878 metric tons were imported in 1999. Officials say that as more and more MPC is imported, less and less U.S. milk is required. This situation has created an artificial surplus that is actually a case of diminished demand.

U.S. Sen. Susan Collins said Monday that she also will co-sponsor MPC tariff legislation. “It doesn’t make sense to allow foreign producers, especially ones that subsidize their dairy industry, to exploit a loophole in the law while our domestic producers are struggling under a depressed market,” she said.