The Office of Management and Budget (OMB) recently released the Spring 2018 Unified Agenda of Regulatory Actions for federal agencies, which outlines the rulemaking actions currently under development in each federal agency. This post 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), 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.
Food product labels are under intense scrutiny from consumers, regulators, class action lawyers, and non-governmental organizations (NGOs). Demands for more information, as well as changes to or prohibitions on labels’ use of certain terminology, are on the rise. But do label-reform advocates fully appreciate the legal and regulatory complexities and burdens food-labeling revisions impose on the industry, especially when those changes involve state-specific rules? Martin Hahn and Samantha Dietle discuss in the Washington Legal Foundation’s Legal Backgrounder.
As the June 18, 2018 compliance date for the Food and Drug Administration’s (FDA’s) final determination that partially hydrogenated oils (PHOs) are no longer generally recognized as safe (GRAS) approaches, the food industry has undertaken efforts to obtain clarification and flexibility from FDA on several issues related to the compliance date, including (1) clarifying the regulatory status of PHO-containing products on the market after the compliance date, (2) requesting an extension of the compliance date to accommodate the time needed for the agency to respond to the pending food additive petition on PHOs, and (3) seeking enforcement discretion to use existing label inventory that declares PHOs as an ingredient after the ingredient has been removed from product formulations.
This post summarizes recent developments and statements from the agency on these issues.
On May 3, the U.S. Department of Agriculture’s (USDA’s) Agricultural Marketing Service (AMS) issued its proposed rule implementing the National Bioengineered Food Disclosure Standard (NBFDS) passed by Congress in July 2016. AMS is proposing a crop-based approach, where disclosure would be required when a food is or contains a crop, or a derivative of a crop, that is included on one of two lists to be developed by the agency. The first list would include crops that are commercially available in bioengineered (BE) forms where the BE form has been highly adopted, such as canola, field corn, soybean, and sugar beet. The second list would include list crops commercially available in a BE form but adopted at a rate of less than 85 percent, such as non-browning cultivars of apple, sweet corn, papaya, potato, and summer squash. In addition to the three disclosure options listed in the statute – text, symbol, or digital/electronic link – AMS proposes to allow use of a text message disclosure option.
The Food and Drug Administration (FDA) has issued a final rule extending the compliance date for the final rules revising the requirements for the nutrition and supplement facts labels and the declared serving sizes and reference amounts customarily consumed (RACCs). The final rule extends the compliance date for manufacturers with $10 million or more in annual food sales from July 26, 2018 to January 1, 2020, and for manufacturers with less than $10 million in annual food sales from July 26, 2019 to January 1, 2021.
On September 8, 2017, Ocean Spray Cranberries, Inc. (Ocean Spray) originally submitted a health claim petition to the Food and Drug Administration (FDA) for approval of a health claim tying together the consumption of cranberry products and the reduced risk of urinary tract infections (UTIs) in healthy women. More recently, on February 20, 2018, the FDA sent a letter to Ocean Spray stating that it is proceeding to review the petition as one for a qualified health claim. All of this information has now been posted in the agency docket. Comments on this qualified health claim petition will be accepted until May 7, 2018, and the FDA expects to issue a final decision on the claim by October 5, 2018.
This post summarizes Ocean Spray’s petition, the studies cited in support of Ocean Spray’s claim, the discussion concerning cranberry as an eligible “substance,” and the FDA’s response.
On March 29, 2018, Food and Drug Administration (FDA or the agency) Commissioner Scott Gottlieb, M.D., delivered a nutrition-related policy address. The Commissioner emphasized FDA’s role in helping Americans improve their nutrition as a step towards reducing chronic disease, with a particular focus on sodium reduction. The Commissioner’s address provides important insight into the shape that FDA nutrition and health policy can be expected to take in the next few years.
Food companies and retailers doing business in California should take note of the recent proposed statement of decision in the case challenging the coffee industry’s failure to warn of the presence of acrylamide in coffee under Proposition 65. On March 28, 2018, the Superior Court of California at Los Angeles County issued a proposed statement of decision ruling the coffee industry failed to meet their burden of proof on their alternative significant risk level (ASRL) affirmative defense. To the extent the ruling is not overturned on appeal, it would set the precedent for applying the ASRL for other listed substances that form during the cooking of food.
Acrylamide is not intentionally added to coffee. Instead, when coffee beans are roasted, a chemical reaction (the Maillard reaction) occurs causing the asparagine and sugars in coffee beans to form the chemical. FDA reports “acrylamide is found mainly in foods made from plants, such as potato products, grain products, or coffee” and that generally it is “more likely to accumulate when cooking is done for longer periods or at higher temperatures.” In the past few years, bounty hunters have filed multiple actions against companies marketing foods in California that contain acrylamide and do not bear the Proposition 65 warning. In light of the recent ruling, it would be prudent for companies that manufacture or market food products that contain acrylamide to reexamine their obligations under Proposition 65.
The Food and Drink Federation (“FDF“) has published a report on the potential impact of rules of origin on UK food and drink exporters in the likely event that the UK ceases to be part of the EU customs union after Brexit.
Rules of origin are the detailed content requirements that determine whether goods are produced “locally” in order to benefit from preferential tariff rates. Food manufacturing is an internationalized business, with UK producers regularly sourcing ingredients from across the EU and globally, often because sourcing equivalent ingredients in the UK would not be economically or practically feasible.
To date, the UK has benefited from the absence of origin requirements for trade within the EU. However, after Brexit, while it is expected that the EU and UK will negotiate largely or complete free tariffs on food and drink under a preferential free trade agreement (“FTA“), the ability of UK exporters to benefit from those rates will depend on whether their goods meet the criteria to be classified as UK products. Depending on the outcome, many UK producers who have built supply and distribution models on the basis of the single market framework may find that they no longer comply with the permitted levels of global ingredients and may therefore be ineligible for preferential trade terms and tariffs.
Because the EU and the UK are likely to maintain high basic tariffs for food and drink products, the margin between preferential treatment and non-preferential treatment is likely to be considerable. As a result, FDF argues that producers excluded from preferential terms will face a ‘hidden hard Brexit’ and may face costly restructuring of supply chains, absorption of higher costs or de facto barring from EU-UK trade, potentially requiring a restructuring of operations to avoid cross-border trade altogether.
To reduce this risk, the report sets out eight rules of origins provisions that the UK should seek to include in an EU-UK FTA to ensure any new origin rules are suitable for the globalized industries they will impact. The proposals include:
- a de minimis allowance for non-local content in all goods, set at 10% of the value in addition to any other product-specific allowances;
- cumulative origin requirements, meaning that goods originating in either the UK or EU are treated as originating in both for the purposes of meeting origin requirements;
- origin protocols reflecting the unique value added by high quality manufacturing, established brands and other forms of technological input that often characterize the EU and UK food and drink sectors and contribute to a price premium for these goods; and
- a simplification of the administrative burden of complying with origin requirements through wider use of self-certification, extended validity for origin designations and exemptions for low value shipments.
As a major producer and exporter of food and drink both to the EU and globally, failure to secure preferential treatment under an FTA will be costly for the UK and could have knock-on effects across the food and drink sector. Any solution will need to effectively balance the importance of encouraging local production with the reality of global production in order to prevent serious disruption to existing supply and distribution chains.
The full report is available here.
There have been several recent developments regarding implementation of the FDA Food Safety Modernization Act (FSMA). The below post summarizes the following topics:
- Guidance on application of the Foreign Supplier Verification Programs (FSVP) regulation to the importation of certain live animals;
- Draft Guidance on the definition of “small business” for purposes of the Preventive Controls for Human Food (PCHF) and Preventive Controls for Animal Food (PCAF) regulations;
- A letter to the winegrape and hops growing industries regarding possible modifications to written assurances in the Produce Safety Rule; and
- A report from the Government Accountability Office (GAO) scrutinizing FDA’s progress and implementation of key food safety-related activities.
Also, as a reminder, March 19, 2018 was the compliance date for supplier verification under the PCHF (Subpart G) and FSVP regulations when a supplier is a “small business” required to comply with the PCHF regulation. Additionally, April 6, 2018 is the compliance date for small businesses for the Sanitary Food Transportation regulation.