The U.S. Department of Agriculture’s (USDA’s) Food Safety and Inspection Service (FSIS) has issued an updated Labeling Guideline on Statements That Bioengineered or Genetically-Modified Ingredients or Animal Feed Were Not Used in Meat, Poultry, Or Egg Products (Guideline). The updated Guideline clarifies that FSIS will approve negative claims verified under a third-party certifying organization the same way it approves other special statements or claims and will not limit claims to those consistent with the Agricultural Marketing Service’s (AMS’s) definition of “bioengineering.” FSIS also added information about labeling for certified organic products. This memorandum provides background on the Guideline and summarizes the changes FSIS made in response to comments received after the initial Guideline was released in August 2016.

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On December 31, 2019, the U.S. Food and Drug Administration (FDA) issued two final guidance documents to assist industry with compliance with the agency’s updated Nutrition Facts labeling regulations. The first final guidance, entitled, “Guidance for Industry: Serving Sizes of Foods That Can Reasonably Be Consumed At One Eating Occasion, Reference Amounts Customarily Consumed, Serving Size-Related Issues, Dual-Column Labeling, and Miscellaneous Topics” is a questions-and-answers style document and a helpful resource to consult for determining the serving size, number of servings, and appropriate Nutrition Facts Panel (NFP) format for different types of food packages. This guidance finalizes the draft guidance released in November 2018 with relatively few changes, as summarized below. FDA also updated one question in its final guidance document, “Nutrition and Supplement Facts Labels: Questions and Answers Related to the Compliance Date, Added Sugars, and Declaration of Quantitative Amounts of Vitamins and Minerals,” with a new question-and-answer on the creation of sugars through the controlled hydrolysis of starch and other complex carbohydrates in the production of plant-based beverages, as discussed further below.

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The U.S. Department of Agriculture’s (USDA’s) Food Safety and Inspection Service (FSIS) has issued a revised compliance guideline for substantiating animal raising claims on labels for meat and poultry products. This updated guideline expands and, in some cases, modifies FSIS’s written policies on animal raising claims made on meat and poultry products. The guideline addresses both how claims should be phrased (including necessary qualifiers or explanatory text) and what type of information the establishment must include with the label application. Although FSIS policy has remained generally consistent at a high level from the previous guideline, FSIS has indicated that it expects certain claims to include additional or updated explanatory statements. It will be important for companies making animal raising claims to review their current labels and claims to evaluate whether changes will be required and to determine an appropriate process for doing so. Companies should revisit point-of-sale claims (regulated by FSIS but not subject to preapproval) and advertising (not regulated by FSIS but assessed by the Federal Trade Commission’s deceptive advertising standard) in light of the revised compliance guidelines.

Animal raising claims, which include statements about antibiotic use, specialty feeds or diets, caging and handling, animal welfare claims, and other husbandry issues, are becoming increasingly popular on labels and point-of-sale retail labeling. Animal raising claims are considered “special statements or claims” that trigger prior review and approval by FSIS. The updated compliance guideline expands on the September 2016 version of the guideline. The revisions will be of interest to meat and poultry processors, retailers, and restaurants making these types of claims. Compliance guidelines are technically nonbinding documents, but they explain FSIS’s current thinking and effectively represent the policies applied when the Agency reviews and approves labels bearing these claims. FSIS is accepting comments until February 25, 2020.

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The U.S. Department of Agriculture’s (USDA’s) Agricultural Marketing Service (AMS) is seeking public comment on draft instructions to validate a refining process under the National Bioengineered Food Disclosure Standard (NBFDS). Validated refining processes can be used to demonstrate a food does not contain detectable modified genetic material and therefore does not require a disclosure under the NBFDS.  AMS released the document prior to the holidays and only provided a 30 day comment period. Comments on the draft instructions are due by January 16, 2020.

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The Office of Management and Budget (OMB) recently released the Fall 2019 Unified Agenda of Regulatory Actions, which outlines the rulemaking actions currently under development in each federal agency. This memorandum summarizes the major actions that may be of particular interest to the food industry that are being planned by the U.S. Food and Drug Administration (FDA) and the United States Department of Agriculture’s (USDA’s) Food Safety and Inspection Service (FSIS), Animal and Plant Health Inspection Service (APHIS), Food and Nutrition Service (FNS), and Agricultural Marketing Service (AMS). After highlighting the most significant priorities, we provide charts for each agency that provide additional details on their plans. More information can be found by clicking on the blue link next to each item, which will take you to a specific page about each agenda item on OMB’s website.

We want to caution that the dates included in the Unified Agenda are not commitments to act on or by the date shown and simply indicate the agencies’ aspirations (note, for example, that dates for some planned actions have already passed). Rather than focusing on projected dates, the Unified Agenda is a valuable tool to identify the substantive issues the agencies consider to be priorities for rulemaking.

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The Federal Communications Commission (FCC), in consultation with the Department of Agriculture, announced the members of the Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States (Task Force). The Task Force, an advisory body to the FCC, will investigate the current state of broadband access in agricultural lands and recommend policies and regulatory solutions to the FCC to promote broadband deployment and precision agriculture, standardize data collections, and target funding towards unserved areas.  The Task Force is also slated to identify ways for the Department of Agriculture and the FCC to collaborate to achieve these shared goals.

Teddy Bekele, Land O’Lakes Senior Vice President and Chief Technology Officer, will serve as Chair of the Task Force, and Catherine Moyer, Pioneer Communications Chief Executive Officer and General Manager, will serve as Vice Chair. A full list of members is included in this Public Notice. The first meeting of the Task Force is scheduled for Monday, December 9, 2019, at 9:30 a.m., and is open to the public.

In addition to announcing the members of the Task Force, the FCC released another Public Notice soliciting nominations for four working groups charged with assisting the Task Force. Those working groups are: (1) Mapping and Analyzing Connectivity on Agricultural Lands, (2) Examining Current and Future Connectivity Demand for Precision Agriculture, (3) Encouraging Adoption of Precision Agriculture and Availability of High-Quality Jobs on Connected Farms, and (4) Accelerating Broadband Deployment on Unserved Agricultural Lands.  The Public Notice provides instructions on eligibility for the working groups and how to submit nominations. Nominations to the working groups are due by Tuesday, December 3, 2019.

On October 31, 2019, the United States Department of Agriculture (USDA) published an interim final rule (IFR) on domestic hemp production. This rule establishes a regulatory framework for USDA oversight of domestic hemp production in accordance with the 2018 Farm Bill.  While many questions remain about how the federal government, including the U.S. Food and Drug Administration (FDA), will regulate hemp-derived products, including cannabidiol (CBD) cosmetics, dietary supplements, and food products, we’ve addressed below the most important takeaways from the IFR with regard to the provisions that would apply to the farmers who are growing hemp.

Scope of Interim Final Rule

The scope of the IFR is limited to the production, sampling, testing, and disposal of hemp plants. The 2018 Farm Bill and the IFR’s requirements (licensing, etc.) apply to hemp producers, and the regulations define producers as, essentially, farmers that grow (or cultivate) hemp plants for market. In other words, the USDA is not regulating the processing, manufacture, testing, or
marketing of hemp-derived products (including CBD products) through the IFR. FDA retains authority over the manufacturing and marketing of CBD, and other cannabinoid-containing pharmaceuticals, foods, dietary supplements, and cosmetics, and the federal Drug Enforcement Administration (DEA) retains jurisdiction over any plants or products that contain greater than 0.3% THC on a dry weight basis. USDA also reiterates that states may not prohibit the transportation or shipment of hemp produced in accordance with the IFR (and the 2018 Farm Bill) or the 2014 Farm Bill.

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On November 6, 2019, the Food and Drug Administration (FDA) announced in a Constituent Update that it will continue to exercise enforcement discretion with respect to certain supply-chain program requirements applicable to contract manufacturers (“co-manufacturers). The agency is taking this action to address situations where brand owners perform certain supply-chain program requirements on behalf of their co-manufacturers. This action extends the enforcement discretion FDA announced in November 2017, which was due to expire on November 6, 2019. Notably, FDA has not yet announced the length of time for this extension of the enforcement discretion but plans to do so in a forthcoming Federal Register notice. This memorandum provides a background on this issue and explains the FDA’s recent announcement.

Background

Under the Preventive Controls for Human Food and Preventive Controls for Animal Food (collectively, “Preventive Controls”) regulations, a supply-chain program is required when a receiving facility identifies a hazard requiring a preventive control that is controlled before an ingredient’s receipt by the facility. A co-manufacturer is considered a “receiving facility” under the rule. Although the co-manufacturer is responsible for approving its suppliers when a supply-chain program is required, there is some flexibility in the rule that allows the co-manufacturer to rely on a brand owner’s supply-chain program activities.

Specifically, the supply-chain program provisions in the Preventive Controls regulations provide that another entity (such as a brand owner) can determine, conduct or both determine and conduct
appropriate supplier verification activities on behalf of an entity such as a co-manufacturer, provided that the co-manufacturer documents its review and assessment of the brand owner’s applicable supplier verification documentation. Thus, when a co-manufacturer relies on a brand owner to handle supplier verification activities, the co-manufacturer will need detailed information from the brand owner in order to meet its own obligations under the supply-chain program regulations. Industry has expressed concerns to FDA that these requirements may not be feasible.

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The U.S. Food and Drug Administration (“FDA”) recently issued a proposed rule entitled “Laboratory Accreditation for Analyses of Foods” (“Proposed Rule”), which was mandated by the FDA Food Safety Modernization Act (FSMA). The Proposed Rule establishes a new program whereby certain food testing must be performed by laboratories accredited by an FDA-recognized accreditation body. The accredited laboratories would be required to send the results of testing conducted under this rule directly to FDA.

FDA proposes that use of an accredited laboratory would be required: (1) for nine specific existing regulatory testing requirements that apply to bottled water, shell eggs, and sprouts; (2) if the agency issues a “food testing order;” (3) for certain test results presented to FDA in connection with certain serious agency enforcement actions (e.g., mandatory food recalls); and (4) for certain testing involving imports. A food testing order would be a new regulatory tool whereby FDA would have broad authority to require an owner or consignee of food to perform food product or environmental testing in response to an identified or suspected food safety problem.

This memorandum summarizes the key aspects of the Proposed Rule, with a focus on the impacts on food manufacturers and importers. Note that the preamble includes a number of tentative conclusions and questions for comment that warrant careful review, but which are beyond the scope of this memorandum. Comments on the Proposed Rule are due March 3, 2020.

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The amendment to the General Health Law concerning overweight, obesity, and Front Labeling Warnings for prepackaged food and non-alcoholic beverages will become into force, as per its publication in the Official Federal Gazette (FOG) on November 8, 2019.

The referred amendment main purpose is to establish new provisions and guidelines regarding those legends, pictograms and warning symbols that the labeling of prepackaged food and non-alcoholic beverages shall contain in case these products exceed maximum levels of (i) energetic content, (ii) added sugars, (iii) saturated fats, (iv) fats, (v) sodium, and (vi) critical nutrients and ingredients as determined by the Ministry of Health.

Critical nutrients are defined as those that deemed to represent a risk factor for chronic diseases.

The referred amendment to the General Health Law will become into force on November 9, 2019. The Executive Power shall adopt those necessary changes to the regulatory framework (e.g., Regulations, Mexican Official Standards, etc.) by no later than May 6, 2020.

As part of the related regulatory modifications, the draft amendment of Mexican Official Standard NOM-051-SCFI-SSA1-2010, General labeling specifications for prepackaged food products and non-alcoholic beverages-Commercial and sanitary information, was published in the FOG on October 11, 2019. To this end, any interested party is allowed to formally file comments regarding the relevant new labeling requirements for prepackaged food and non-alcoholic beverages. The deadline for submitting comments is December 10, 2019.

The Regulatory team at Hogan Lovells is ready to assist you and clarify any questions you have on this matter.