SYSCO has led the industry in implementing certain safeguards. For example, the USDA does not require metal detectors during food processing or manufacturing. In the early 1990s, SYSCO began requiring suppliers of SYSCO Brand products to use metal detectors. SYSCO also began requiring all its SYSCO Brand ground beef suppliers to have a written Hazard Analysis and Critical Control Point (HACCP) program for their facilities in the mid 1990s, although the FDA did not move forward with that requirement until 1997. Currently, SYSCO requires that HAACP principles be employed and that a thorough hazard analysis be conducted as the HAACP plan develops for all SYSCO Brand products. The FDA and USDA only require HACCP programs for meat, poultry, seafood and juice. Additionally, we require every SYSCO Brand produce supplier to have an annual third party audit that includes Good Agricultural Practices (GAP), even though the FDA currently does not require such audits. The USDA now requires zero tolerance for listeria pathogens in meat manufacturing environments. SYSCO also requires an environmental sampling program for spoilage and pathogenic bacteria for all potentially hazardous Ready-to-Eat meat products.

We have taken an active role in encouraging the United States Department of Agriculture to take additional steps to safeguard the public in the aftermath of the discovery of Bovine Spongiform Encephalitis (BSE) in the United States. SYSCO proposed that: 1) a national live animal identification program that traces a beef or dairy animal from birth to harvest; 2) the number of animals available for testing is increased to confirm that current surveillance programs have procedures to reduce delays of inventory through the supply distribution chain; and 3) tighter controls be implemented by the USDA in the governing of feed-milling companies to achieve zero tolerance so that beef animal byproducts do not enter beef and dairy cattle rations.

Another product line, seafood, is one whose quality may sometimes be compromised and one that is covered by fewer government regulations than many other products. Under the SYSCO Brand, SYSCO has both fresh and frozen seafood lines, Hidden Cove and Portico. Our quality assurance team is known in the industry as requiring strict adherence to quality guidelines, not only in the selection of seafood products, but in all products sold under the SYSCO Brand. We are confident that the Hidden Cove and Portico seafood products are of the highest quality, are held at proper temperatures and are labeled with the appropriate species name.

The Company will continue to develop and revise plans to address business and food safety issues as they arise. SYSCO distributes products that comply with federal and state laws and labeling regulations. SYSCO will continue to work actively with our suppliers to develop even greater product choices for our customers, including certain GMO-free products, organic products, products farmed with Integrated Pest Management systems and food products with unique specifications such as those proposed by eco-label organizations that support sustainable agriculture.