Food and Beverage News and Trends

This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.

• USDA considering whether Salmonella should be declared an adulterant in poultry and meat. In response to several petitions filed by law firm Marler Clark and the Center for Science in the Public Interest, the USDA on October 28 said in a letter that its Food Safety and Inspection Service (FSIS) is “actively evaluating” whether certain types of Salmonella should be declared per se adulterants in meat and poultry products. Rachel Edelstein, an assistant administrator at the agency, said in the letter that Agriculture Secretary Tom Vilsack and the USDA Office of Food Safety recently announced USDA’s plans to explore possible new approaches for addressing Salmonella in poultry. She added that the FSIS “will consider the issues raised in the two petitions as we consider these new approaches.”
• Glitter dust warning. The CDC on October 29 warned in its Morbidity and Mortality report that a decorating product called glitter dust or luster dust often contains poisonous heavy metals that are not meant to be eaten, and urged consumers to avoid foods with glittery garnishes.  These products are sold under an array of names, such as twinkle dust, diamond dust, disco dust, and shimmer powder.  They often contain high levels of copper, lead and other metals. Two versions of luster dusts are on the market: those labeled as food-grade and edible, and those labeled nontoxic or “for decorative purposes only.”  Adrienne Ettinger, chief of staff for research at Rutgers Biomedical and Health Sciences at Rutgers University, said consumers and bakers have become confused about the difference between the two classifications.  A helpful tip from the FDA: if there is no ingredient list on the label, the glitter should not be used on food.  The CDC also pointed to investigations by health officials in two states where illnesses in children were traced to cakes decorated with these dusts.  In Missouri, a one-year-old’s puzzling lead poisoning was traced to ““primrose petal dust” used to decorate a homemade birthday cake.  The product, labeled “nontoxic,” turned out to be 25 percent lead. In Rhode Island, heavy metal poisoning in a group of children was traced to a bakery-made birthday cake frosted with “gold dust.”
• Challenge dismissed to “All Butter” labeling of bakery products. On November 4, the US District Court for the Southern District of New York dismissed with prejudice a class action against Bimbo Bakeries USA Inc., maker of Entenmann’s bakery products. The plaintiff had alleged that the words “All Butter” on the label for Entenmann’s “All Butter Loaf Cake” are deceptive because the cake contains not only butter but also soybean oil and artificial flavors. The court found that while the term was ambiguous, the ambiguity can be resolved by any consumer if he or she simply reads the list of ingredients on the package. No reasonable consumer, the court said, would take the words “All Butter” to mean that the product contains no other ingredient than butter because, taken literally, that would mean the product is a stick of butter. 
• Consumers challenge Rhode Island’s laws on distribution of wine. Two Rhode Island residents have filed a lawsuit challenging a state law that prohibits them from directly receiving shipments of wine. In their lawsuit, they contend that they live in “dry areas” of the state but cannot legally have wine shipped to them under current state law. On November 2, they sought an injunction barring the enforcement of a state law that prohibits out-of-state retailers from selling and delivering wine to Rhode Island residents. They asked the court to declare the regulatory scheme unconstitutional as a violation of the US Constitution’s Commerce Clause and said that it discriminates against out-of-state wine retailers and serves to protect in-state businesses.
• Lawsuit attacks health claims in kombucha marketing. On October 24, a consumer filed a putative class action in the US District Court for the Northern District of Illinois against Fermented Sciences, a maker of kombucha and hard seltzers, contending that the company is misrepresenting its Flying Embers products as healthful, when in fact, as alcoholic beverages, their health status is highly questionable. According to the complaint, the products are promoted as containing antioxidants, and real botanicals; the front labeling says the beverages have antioxidant vitamin C and live probiotics. However, the complaint noted that the USDA Dietary Guidelines for Americans advise that alcoholic beverages “are not a component of the USDA Dietary Patterns.” The consumer is striving to include in the suit any consumers who bought Flying Embers hard seltzer in Delaware, Illinois, Kansas, North Dakota, West Virginia, and Wyoming. You may also be interested in our alert Compliance tips for marketing health benefits in alcohol.
• Appeals court reinstates advertising claim against ConAgra. The US Court of Appeals for the Ninth Circuit, on October 26, reinstated a challenge filed by a consumer against the allegedly misleading labeling and advertising of ConAgra Brands’ frozen chicken nuggets and similar products. The plaintiff had alleged, among other things, that ConAgra’s website advertising misled consumers into believing that the products are free of preservatives. The appeals court ruled that federal meat labeling laws do not preempt certain of his claims and that they can proceed. Under federal labeling laws, the USDA’s approval of a claim on a label or in an advertisement forecloses a plaintiff from bringing a case. Here, however, the appeals court pointed out that the ConAgra website “does claim that the chicken products as a whole are made without preservatives, artificial flavors, or artificial colors.” This broad claim is not identical with what the USDA had approved; thus, the case can proceed.
• Study points to possible flaw in new taxes on sugary drinks. An article published October 29 in the journal Psychological Science addresses certain implications of the recent passage by several cities of taxes on sugary drinks. The article suggests these taxes have a serious flaw: they only succeed in reducing the purchasing of sugary drinks – which is their primary intent – if the price tags clearly state that consumers are paying the tax when they buy the drink.  “If cities want these policies to be effective, they need to regulate how these sugary drinks are labeled at the stores where they are sold -- and they currently don't do that,” said Grant Donnelly, lead author of the study and assistant professor of marketing at The Ohio State University's Fisher College of Business. Donnelly noted that consumers who decided not to purchase these taxed drinks often opted to buy healthier beverages, like bottled water, “so the taxes do not seem to hurt the stores that sell drinks."  The research included a field study of consumer attitudes at two convenience stores in San Francisco, which currently has a tax on sugary drinks of one cent per ounce -- an added 12 cents for a 12-ounce drink.
• Soaring energy costs this year may mean widespread food shortages next year.  Dramatically rising energy prices this year may trigger a global food shortage in 2022, Svein Tore Holsether, the CEO of Norway-based fertilizer producer Yara International, told Fortune magazine on November 4.“I want to say this loud and clear right now, that we risk a very low crop in the next harvest…. I’m afraid we’re going to have a food crisis." Yara is a major producer of ammonia, one of the key ingredients of synthetic fertilizer; manufacturing ammonia requires natural gas. Holsether said, "To produce a ton of ammonia last summer was $110. And now it's $1,000. So it's just incredible.” Fertilizer prices, he noted have already tripled in the past few months.  Yara donated $25 million worth of fertilizer to vulnerable farmers this year.  But, like other ammonia manufacturers, it has also cut back its ammonia production by 40 percent – meaning less fertilizer will be available generally worldwide, and it will cost more. The effect will be sharpest for the small farms that are typical in many parts of the world.  Food prices have already risen more than 30 percent around the world this year.