HerbalEGram: Volume 4, Number 9, September 2007

Wisconsin legislators introduced a bill into both houses of the US Congress on August 2 that would require labeling on raw ginseng (Panax spp.) roots that are imported or sold at the wholesale or retail levels, identifying their country of harvest.¹ US Senators Russ Feingold (D-WI) and Herb Kohl (D-WI) and Congressman Dave Obey (D-WI) introduced the Ginseng Harvest Labeling Act of 2007² to protect ginseng farmers and consumers against falsely marketed and mislabeled ginseng.¹

According to a recent press release from Sen. Feingold’s office (and an article in the current issue of HerbalGram (#75)³), some smugglers from Canada and Asia have been erroneously labeling their ginseng as “Wisconsin-grown.”¹ This is due to Wisconsin ginseng’s international reputation for what the legislators noted as high quality and low chemical residue, for which Wisconsin ginseng commands a premium price in world markets for cultivated American ginseng (P. quinquefolius). The legislators have argued that such illegal practices mislead consumers and undercut the financial interests of domestic ginseng growers.

“Wisconsin ginseng is the best in the world and remains an important part of the economy of Marathon County and central Wisconsin,” Congressman Obey is quoted as saying in the press release.¹ “We need to do what we can to keep the industry healthy and this legislation will help. We’ve been battling counterfeiters for a number of years and while enactment of new, more stringent labeling requirements won’t eliminate the problem, it will make it more difficult for the smugglers and counterfeiters and provide us with another weapon to fight them.”

Paul Hsu, owner of the Wisconsin-based company Hsu’s Ginseng Enterprises, Inc., expressed his approval of the proposed legislation (oral communication to C. Cavaliere, September 4, 2007). Like the bill’s authors, Hsu pointed out that there has been rampant mislabeling of ginseng roots sold in some Chinese ethnic grocery stores and related shops, usually found in Asian communities in American cities, whereby ginseng roots grown in China or Canada have been erroneously marketed as Wisconsin-grown. “Wisconsin ginseng is different than Chinese-grown [American] ginseng or Canadian-grown [American] ginseng,” Hsu stressed, referring to the fact that in the past 20 years American ginseng has been successfully cultivated in Western Canada and in China 2 areas that are outside the natural habitat of American ginseng.

“Wisconsin ginseng is better in taste and aroma and is better for clients in the treatment of sickness.” claimed Hsu.  He added that properly labeled ginseng products benefit consumers. “There should be truth in labeling so people can decide what they want to pay for and what they want to buy,” he said.

Sen. Feingold has introduced similar bills in previous legislative sessions.⁴ The Ginseng Harvest Labeling Act of 2007 is supported by several relevant trade groups, i.e., the Ginseng Board of Wisconsin, the American Herbal Products Association (AHPA), and the United Natural Products Alliance.

Provisions of the Bill

Most of the fraudulent uses of the “Wisconsin-grown” claim occur in Southeast Asia and other international markets outside the United States. The US market constitutes a very small percentage of sales for American ginseng. Obviously, this legislation, if passed into law, can affect only the sales of American ginseng roots within the US borders, with no impact on abuses and fraud overseas, as noted by Rep. Obey above. (The Ginseng Board of Wisconsin has attempted to deal with this problem by granting a respected Singapore herb company the exclusive marketing rights to distribute internationally Wisconsin-grown American ginseng roots and products with the “Wisconsin-grown” seal).

The question arises whether this proposed legislation is really appropriate or necessary, since it will not and cannot effectively eradicate the fraudulent practices that occur within the ginseng markets outside the United States, where most of the abuses have been occurring. These kinds of abuses, which generally occur with the sale of American ginseng roots in ethnic markets, are usually outside of the range of the herb industry’s attempts at self-regulation, and thus, the bill’s supporters would argue, the only way to clean up these practices is through federal lawmaking, regulations, and enforcement.

Supporters of the bill emphasize that this bill will affect the sale in the United States of ginseng roots only and ginseng as a raw material, not finished dietary supplements. They emphasize that dietary supplements containing ginseng powders or extracts whether they be from American ginseng or Asian ginseng (P. ginseng) roots will not be affected by this legislation. Some critics of the bill have observed what they consider the use of the phrase “raw agricultural ginseng” to be inconsistent throughout the bill, and they have taken particular issue with the definition of “ginseng,” which may be considered ambiguous in that it includes the term “herbal ingredient.” By including the term “herbal ingredient” in the definition, concerned parties have raised the question whether the use of this phrase might allow the legal interpretation of “ginseng” as a dietary ingredient and hence the regulatory application of the provisions of this bill to finished dietary supplements and/or teas. If this were to occur, this legislation might affect not only raw or dried ginseng roots as agricultural commodities, but also would impact the finished dietary supplement and beverage products in which processed roots (e.g., dried and powdered or extracted) are used.

“Never! Not in a hundred years!” says Michael McGuffin, president of AHPA, the leading trade association dealing with the interests of herb sellers and one of the key supporters of the bill (oral communication to M. Blumenthal, September 12, 2007). He emphasized that this bill’s intention is to reduce or eliminate the sale of fraudulently-labeled ginseng roots as whole roots or raw materials in the United States and will not affect the labeling of dietary supplement products.

In the AHPA press release announcing the bill, McGuffin stated the intention of the bill’s sponsors and specified the exclusion of dietary supplements, saying, “This bill will ensure that buyers of whole ginseng root are given truthful information as to its source, without creating unnecessary labeling requirements for other herbal ingredients or for finished herbal products.”⁴ McGuffin also noted the strong cooperation of Sen. Feingold and his staff, as well as other members of the Wisconsin congressional delegation, who McGuffin believes would be most willing to consider modifying the language of the bill to ensure that it contains no ambiguities that might lead to any regulatory confusion once the bill is enacted into law.

Regarding enforcement, the provisions of the bill will be enforced by the United States Department of Agriculture (USDA), not the Food and Drug Administration, which currently has the authority to regulate herbal dietary ingredients and finished dietary supplement products. The Secretary of Agriculture will have the responsibility to issue regulations that specify the form of disclosure that is required at the retail and wholesale levels, i.e., at whatever levels of trade the ginseng roots are sold as whole roots or as raw materials.

According to the proposed language, the bill is intended to take effect 180 days (6 months) after it is passed into law. Critics have concerns about the language dealing with sanctions and fines for infractions, which, as currently written, would accrue on a daily basis. According to the language of the bill, the penalty for failing to disclose the country of harvest during a sale or importation will be up to $1,000 for the first day on which the failure occurs, and no more than $250 for each subsequent day on which the failure to disclose continues. One industry attorney has suggested that an alternative penalty might be to levy a one-time fine on each infraction. It is conceivable that the bill’s sponsors and supporters intended this form of accruing penalty to help ensure that offenders would remedy the non-disclosure quickly to comport with the bill.

The current language of the bill does not distinguish between the “accidental” sale of mislabeled roots and the willful sale of mislabeled roots, i.e., the deliberate perpetration of fraud. Thus, in a hypothetical but possible example, David Seckman, president of the Natural Products Association, a trade association representing about 9000 independent and chain health and natural retailers, states that his major concern relates to the possibility that a natural food retailer may be selling mislabeled roots that he/she purchased from a distributor and yet the retailer would be subject to the fairly stringent sanctions described above (oral communication to M. Blumenthal, September 17, 2007). It should be noted that very few natural food stores sell whole ginseng roots; most ginseng products sold at retail in natural food stores are sold in the form of teas and dietary supplements which, as already noted above, would not be subject to the provisions of this legislation once it were enacted into law.

In recognition of the growing concerns regarding the sale of fraudulently-labeled ginseng roots and processed materials from these roots (e.g., dried powders or extracts), an article recently published in the current issue of HerbalGram (#75) examines the problem of mislabeled American ginseng and its effects on the Wisconsin ginseng industry, as well as other challenges that Wisconsin ginseng farmers have faced.³ The article further covers some of the projects and partnerships that Wisconsin ginseng farmers and their representative organizations have initiated to revitalize the industry, including recently granting exclusive distribution rights for Wisconsin-grown American ginseng roots carrying the Wisconsin Ginseng Seal® to Eu Yan Sang International Ltd, a Singapore-based company with over 128 years of history selling ginseng and Chinese herbs throughout Southeast Asia.

The HerbalGram article notes that in former decades there were approximately 1500 ginseng growers in Wisconsin, but today that number has dropped to about 150, largely due to competition from American ginseng roots grown in China and Canada, which are typically sold at significantly lower prices and are sometimes fraudulently labeled as “Wisconsin-grown.”

The Wisconsin Congressional delegation has previously introduced legislation intended to protect Wisconsin’s ginseng industry. In 2002 Sen. Feingold had a provision inserted into the “Farm Security and Rural Investment Act (“Farm Bill”) stating that the only plant materials that would be allowed to use the term “ginseng” were members of the genus Panax.^5,6 This thereby disallowed the widespread practice of using “Siberian ginseng” as the popular common name for Eleutherococcus senticosus, another plant in the family Araliaceae , but with different chemistry and pharmacology than the plants in the genus Panax. Inexpensive eleuthero material had become relatively popular as an ingredient in dietary supplements and in teas at that time, generally lagging behind Asian ginseng in retail sales but ahead of American ginseng.

—Courtney Cavaliere and Mark Blumenthal

References