Food and Beverage News and Trends - February 3, 2023
This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.
FDA restructuring. The FDA has announced a restructuring of the human foods program in response to the findings and recommendations in the Reagan-Udall Foundation’s Operational Evaluation of FDA's Human Foods Program, proposing a new structure to unify many elements in the agency that oversee the human food supply. Here are some of the latest developments around that announcement:
- Top FDA official resigns, urges major restructuring of agency. Politico reported January 25 that Frank Yiannas, the FDA’s deputy commissioner for food policy and response, has resigned from his position. Yiannas has held the post since December 2018, and his resignation will take effect February 24. His resignation comes as the FDA is set to announce the steps that it is taking to address the findings of an external review of its food program. In his resignation letter sent to FDA Commissioner Robert Califf, Yiannas recommended that Califf restructure the agency to include “a fully empowered and experienced Deputy Commissioner for Foods, with direct oversight of those centers and offices responsible for human and animal foods.”
- Meanwhile, in Congress. On January 30, Senator Dick Durbin (D-IL) and Representative Rosa DeLauro (D-CT) wrote to FDA Commissioner Robert Califf and urged him to make major changes in the structure of the agency in view of recent FDA failures. “We urge you to empower a Deputy Commissioner for Foods with authority over the Human Foods Program; separate the Center for Food Safety and Applied Nutrition (CFSAN) into a Center for Food Safety and a Center for Nutrition; and directly integrate the Office of Regulatory Affairs’ (ORA) food-related inspectional and compliance responsibilities within the Human Foods Program,” they wrote. “As commissioner, you have the power to turn the FDA into an organization that meets its mission and prevents foodborne illnesses and outbreaks – saving and improving lives nationwide. Now is the time for real reform at FDA – it is not the time for half measures or more excuses.”
- Find out more. See our alert Announcing a new Human Foods Program at FDA.
Canadian agriculture ministers meet to discuss Grocery Code of Conduct. On January 13, agriculture ministers from across Canada met to discuss finalizing a Grocery Code of Conduct which they hope will address many of the pressures currently faced by many stakeholders in Canada’s food supply chain. According to a joint statement from Marie-Claude Bibeau, Federal Minister of Agriculture and Agri-Food, and André Lamontagne, Quebec’s Minister of Agriculture, Fisheries, and Food: “by enhancing transparency, predictability and fair dealing, the Code will help make Canada’s food supply chain more resilient.” The Code is the outcome of more than a year of negotiations between industry groups representing farmers, independent grocers, food manufacturers and processors, and national retailers. The government has yet to release specifics on what the Code will entail, but Minister Bibeau has stated she expects the Code will be put in place by the end of 2023. Details on industry consultations with the government concerning the Code are forthcoming.
USDA announces strengthening of its organic program. The USDA has finalized a long-anticipated rule which strengthens oversight and enforcement of the production, handling, and sale of organic agricultural products in the US. The agency says this will “protect integrity in the organic supply chain and build consumer and industry trust in the USDA organic label by strengthening organic control systems, improving farm to market traceability, and providing robust enforcement of the USDA organic regulations.” The rule will apply to any food in the US that is to be labeled organic under the agency’s program. It strengthens enforcement of the USDA’s strict definition of organic food, which is food that relies on “natural substances and physical, mechanical or biologically based farming methods to the fullest extent possible.” The rule requires USDA certification for all imported organic food, increases certifications of more businesses in the supply chain and boosts authority for inspections, record-keeping, traceability, and fraud prevention practices. The Organic Trade Association, which lobbied for the rule, said that it represents the biggest change to organic regulations since the creation of the USDA organic food program. A USDA undersecretary said the rule provides “a significant increase in oversight and enforcement authority to reinforce the trust of consumers, farmers, and those transitioning to organic production.” The rule goes into effect March 20.
FDA will conduct major consumer research on front-of-pack labeling. In keeping with one of the commitments made by the Biden Administration at last fall’s White House Conference on Hunger, Nutrition and Health, the FDA announced January 26 that it plans to do significant consumer research on the most effective way to communicate nutritional information on the front of food packages. The agency plans to hire an outside contractor to present an online questionnaire to 3,000 US residents selected to represent different ages, genders, educational achievements, and economic backgrounds. Participants will be shown different formats of front-of-pack labels and will answer questions on the content of the product, their perceptions of the label, and their interest in making a purchase. Setting up a front-of-pack labeling regime was among the commitments that President Biden made at last fall’s conference.
Canadian Food Inspection Agency updates procedures for maintaining food export eligibility. Being listed as a valid exporter in Canada, with a presence on the food export eligibility lists, requires maintaining a Safe Foods for Canadian license. The CFIA recently updated its operational procedure document to help food exporters keep their listing status on these lists. Additionally, the CFIA is providing separate policy guidance for meat and non-meat products concerning other procedures, such as the voluntary removal from an eligibility list.
FDA turns down petitions to approve CBD in food and supplements. The FDA announced January 26 that after completing a major review in response to industry petitions, it had decided that products infused with CBD, a non-psychoactive chemical derived from cannabis, don’t appear to meet federal safety standards and require stricter regulations than for foods and dietary supplements. The announcement was a blow to the burgeoning CBD industry.
Bread labeling case dismissed. On January 12, the US District Court for the Northern District of Illinois dismissed a class action brought against Bimbo Bakehouse that had accused the company of falsely branding its Cheesecake Factory licensed bread as whole-grain bread. The complaint had contended that the bread’s dark color, the presence of specks of grain in it, and its labeling as “brown bread” misled consumers into believing that it contained more whole grain than it actually did. The court rejected the plaintiff’s claims, finding that the bread’s color, appearance, and packaging alone cannot reasonably be used to determine how much whole grain is in the bread. “The Bread’s appearance and label makes no explicit or implicit representations about the proportion of whole grains in the Bread’s ingredients,” the judge wrote. “Even if the brown color of the bread signifies that the Bread contained whole grains – which it does – it does not guarantee its precise whole grain content.”
Court dismisses case on heavy metals in baby food, saying FDA should decide issue. On January 19, the District Court of the Northern District of New York dismissed a lawsuit that had alleged that Beech-Nut Nutrition Co. had failed to disclose that its baby food contains toxic heavy metals, ruling that the FDA has primary jurisdiction over the case. The court agreed with Beech-Nut that the plaintiffs’ claims depend upon “technical and policy considerations within the FDA’s field of expertise” and that the action is not a “garden variety” false advertising case, as argued by the lawyers for the plaintiffs.
New report recommends alcoholic beverages in Canada contain warning labels about health risks. The Canadian Centre on Substance Use and Addiction (CCSA) issued guidance in 2022 that drinking more than two alcoholic beverages per week raises individuals’ risk of health concerns. This significantly changes prior suggested guidelines from 2011 which said that individuals could safely consume 10 drinks per week (for women) and 15 drinks per week (for men). The CCSA further recommends that bottles and cans containing alcoholic beverages carry labels informing consumers about serious health risks including cancer, as well as the number and potency of drink servings in the container and a recommendation to limit consumption to two drinks per week. The Canadian alcohol industry recently pushed back against these suggestions, stating that it already voluntarily informs customers of the health risks in alcohol consumption. The industry has also expressed concerns about the CCSA’s methodology. The CCSA has responded by pointing out that the methodology was recommended by the Public Health Agency of Canada and had been used in a similar study conducted in Australia. The CCSA also noted that no comments were submitted to it during the public consultation period that would have required changes to its analysis. It is yet to be seen whether this new guidance will prompt any regulatory changes in Canada regarding alcohol labelling.
Major food company faces complaint over its sustainability goals. On January 17, a small activist group called Mighty Earth filed a complaint with the Securities and Exchange Commission alleging that the Brazilian-based food giant JBS is failing to meet its emissions targets. The unusual complaint centers on green bonds issued by JBS in 2021 and linked to the company’s sustainability goals. JBS is a mammoth food-processing company that is the world’s largest meat producer. If JBS fails to reach its targets for greenhouse gas emissions, it has said that it will be penalized and will pay bondholders a “step up amount or premium payment.” Mighty Earth’s complaint at the SEC alleges that JBS is already failing to meet its emissions targets. Mighty Earth wants the agency to impose penalties and injunctions on the Brazilian company, which it says has contributed to or ignored deforestation carried out by its suppliers.