Amazon executives and federal government regulators are locked in a nearly decade-long stalemate — one that could potentially affect the health of anyone buying food from the online retailer.
The battleground is a warehouse in Lexington, Kentucky. Inside, Amazon workers fetch food products from the shelves and pack them in boxes for shipment. Products include candy, snacks, pet food, and other shelf-stable foods.
It’s the job of the Food and Drug Administration (FDA) to inspect facilities that manufacture, process, pack, or hold food meant for human or animal consumption.
The goal of these inspections is to prevent outbreaks of foodborne illness, such as the recent E. coli infections linked to romaine lettuce. And to protect the country’s food supply from terrorist attacks.
The FDA has requested several times over the past decade that Amazon register its facility with them.
But the online retailer continues to push back, saying its facility is a retail food establishment, like a deli or grocery store, and is exempt from the registration requirement.
Last year, Amazon extended its food industry reach with its purchase of Whole Foods Market.
So the answer to the Amazon-FDA stalemate will likely impact the evolving market of online/home delivery food retailers.
The ongoing battle
The Centers for Disease Control and Prevention (CDC) estimates that each year, 48 million people get sick from a foodborne illness.
Of them, 128,000 are hospitalized and 3,000 die.
So, preventing foodborne illness is an important public health concern.
The 2002 Bioterrorism Act required for the first time that food facilities register with the FDA.
This was followed in 2011 by the Food Safety Modernization Act (FSMA), which includes seven rules aimed at ensuring the safety of the nation’s food supply.
If a company is required to register its facility with the FDA under the Bioterrorism Act, then it will most likely have to comply with one or more of the FSMA rules.
MarketWatch reports that the FDA first asked Amazon to register its facility at least as far back as July 2008.
The agency sent the company an “untitled letter” saying that its lack of registration violated federal law. This is not as formal as an official “warning letter,” but it asked the online retailer to register voluntarily within 30 days.
Public records obtained by MarketWatch also show that each time an FDA inspector visited Amazon’s Lexington warehouse, the facility had not been registered. This happened as recently as October of last year.
According to MarketWatch, an Amazon representative told an FDA inspector that the company doesn’t need to register because its sales are retail. The FDA exempts retail food establishments such as grocery stores, delis and roadside stands — businesses that mainly sell directly to consumers.
Amazon said in a statement, shared on MarketWatch, that it has a “robust food safety program to ensure our products are safe for our customers.” And that its facility is registered with the Commonwealth of Kentucky.
Even facilities that have good food safety programs, though, still have to register with the FDA.
“Amazon is saying, ‘Don’t worry about it, FDA, you can trust us.’ But the FDA wouldn’t take that from the majority of other companies,” said Marc Sanchez, an FDA and U.S. Department of Agriculture (USDA) regulatory attorney, and founder of Contract In-House Counsel and Consultants, LLC.
He told Healthline that several FSMA rules may apply to Amazon, ones that consumers should be aware of.
This includes rules meant to protect against food being intentionally contaminated, and ensure that food or supplements imported from foreign suppliers are safe.
Also, state oversight of food facilities may not be enough to prevent foodborne illnesses.
“There are high-profile cases where state inspections didn’t catch key food safety issues, like Peanut Corporation of America,” noted Sanchez.
A 2009 Salmonella outbreak linked to Peanut Corporation products contributed to the death of nine people and the sickening of hundreds. It led to one of the largest food recalls in the country.
The online grocery store model
Sanchez agrees with the FDA’s assessment of the situation.
“The registration requirement is applicable to a party that ‘packs’ or ‘holds’ human food for consumption,” said Sanchez. “This would seem to capture Amazon pre-Whole Foods acquisition and maybe more so now.”
He said the FDA typically thinks of a retail food establishment as a business where consumers can go in and be served food or buy food directly — such as your typical brick-and-mortar deli or grocery store.
Amazon represents a shift away from this retail model toward a distribution center, which are required to register with the FDA.
“I can’t go into [Amazon’s] Kentucky facility and shop for hamburger meat,” said Sanchez.
He added that the FDA’s analysis of the situation may look something like this — “Amazon’s warehouse is no longer a grocery store. It’s a component of a grocery store, but that component is subject to FDA registration.”
With that line of reasoning, Amazon’s newly purchased Whole Foods Market stores wouldn’t need to have FDA registration — they are retail food establishments. But the warehouses that supply the stores would.
Not everyone agrees.
Marc Scheineson, head of food and drug practice at Alston & Bird and a former FDA associate commissioner, told MarketWatch that because Amazon doesn’t manufacture or process food at its Kentucky facility — it receives and ships it — the retailer may not need to register with the FDA.
But he added that companies usually make the changes requested by the agency in order to avoid further penalties or a more serious “warning letter.”
Size may matter
That brings up the question of why Amazon hasn’t complied with the FDA’s repeated requests.
And why the agency has limited its persuasion tactics to the relatively “toothless” untitled letter.
Sanchez said the FDA has gone after other companies for refusing inspections, especially foreign companies.
“The FDA has very clearly said: ‘We either come into the facility, or you can no longer sell your product [in the United States]’” said Sanchez.
With the Amazon-FDA battle going on for so long with no resolution, Sanchez also suggests that Amazon’s size may give it the ability to resist the FDA’s requests.
“Ultimately, the FDA decides how the Bioterrorism Act is interpreted and when public safety requires oversight from the agency,” said Sanchez. “They’ve done that here, and it’s clear Amazon is throwing its weight around. Very few companies get this light-handed approach or ten-plus years of asking but not enforcing.”