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 extends comment period on regulation of genetically engineered livestock. On March 8, the USDA announced that it was granting an additional 60 days for public comment on a proposal that originated in the final weeks of the Trump Administration concerning which federal agency will have jurisdiction over livestock and poultry created through genetic engineering. The proposal would put the USDA, rather than the FDA, in charge of regulating such animals. The livestock industry prefers USDA jurisdiction, saying that that agency generally moves more rapidly than the FDA and is more sympathetic to the industry’s concerns. Ever since the dawn of agricultural biotechnology in the 1990s, the FDA has overseen genetically engineered animals, and the USDA has regulated genetically engineered plants. Former Agriculture Secretary Sonny Perdue had said that the USDA should take the lead as an example of the modernization of federal oversight of biotechnology. The new comment period will end on May 7.

• Naming seafood grown from cells. Key stakeholders in the industry that provides seafood grown from animal cells in bioreactors have told the FDA that the best way to describe their product is to call it “cell-cultured.” On March 8, leaders in that nascent industry, as well as the National Fisheries Institute, told the FDA that cell-cultured is a truthful, non-disparaging term that is appropriate for use in the industry and by consumers. No such products are yet on the market, but the products are rapidly approaching commercialization. While the FDA and the USDA have figured out a regulatory framework for dealing with these products, the agencies have not yet come up with the best way to name and describe them – a term that conveys what the products are while differentiating them from conventional seafood.

• Nonprofit group asks FTC to act against deli company on animal-welfare practices. On February 23, the Animal Welfare Institute filed a petition with the Federal Trade Commission accusing Boar’s Head, a major deli meat company headquartered in Florida, of using deceptive advertising practices in promoting its so-called humanely raised chicken sausage and Simplicity All Natural turkey products. The nonprofit group said there is no evidence that Boar’s Head raises its chickens and turkeys in accordance with animal welfare standards that exceed standard industry practices. In reality, according to the group, Boar’s Head merely complies with the minimum industry animal care standards of FACTA (Farm Animal Care Training & Auditing) for its chicken products and the National Turkey Federation for its turkey products. In the petition, the group requested that the FTC prohibit Boar’s Head from engaging in any marketing practices designed to create the false impression that its chickens and turkeys are treated better than birds on any other factory farm.

• Allergy group urges FDA to require labeling for sesame in products. On February 22, the Asthma and Allergy Foundation wrote a letter to the acting commissioner of the FDA urging the agency to require labeling for all products containing sesame. Allergy to sesame is increasingly common – it is now considered the ninth most common allergy in the US. The foundation pointed out in the letter that an estimated 1.1 million American adults and children may have a sesame allergy and that severe reactions to sesame are quite common among those who are allergic. “We strongly urge FDA to initiate rulemaking to mandate sesame labeling without delay,” the letter said. “We also ask that FDA add sesame to the Compliance Policy Guide, which includes standards for manufacturers to address cross contact with allergens during food production.” The FDA has already established a voluntary guidance for sesame labeling

• Sesame oil recall. On March 8, Mediterranean Foods Inc. of Warren, Michigan, announced a recall of its Alqosh brand, two-pound plastic jars of sesame oil over fears of Salmonella contamination. The contamination was discovered during routine testing by the Michigan Department of Agriculture and Rural Development at a retail outlet in Michigan. No illnesses have been reported to date in connection with this recall, and the company has suspended production as the FDA investigates.  

• Sugary cereals settlement. The US District Court for the Northern District of California approved on February 24 a $15 million settlement of a case against Post Foods, LLC, the cereal manufacturer, concerning its added-sugar cereals. As part of the settlement, Post will no longer use terms including “no high fructose corn syrup,” “less processed,” “wholesome,” “smart,” and “nutritious” on products where 10 percent or more of the calories come from sugar. The cereal company had been accused of falsely advertising an array of sugary cereals as healthy.  The company also plans, as part of the settlement, to create a $15 million settlement fund. Consumers who purchased specific Post cereals between 2012 and 2020 could be eligible to receive a payout. Funds which go unclaimed will be divided among the American Heart Association, the Resnick Center for Food Law & Policy at UCLA, and BBB National Programs. The final approval hearing is scheduled for June 23.
• Biden restaurant grants.  Restaurant industry observers are noting that the massive COVID-19 economic relief package signed by President Joe Biden on March 11, 2021, includes a significant grant program for struggling restaurants. The program offers $28.6 billion in grants for restaurants whose revenue fell in 2020 as a result of the pandemic. That figure is actually $3.6 billion higher than in the original February draft. Funding is also added to the Paycheck Protection Program and to provide indirect help to small businesses in general through stimulus payments and unemployment benefits, but the biggest share of direct help goes to small restaurants. Grants are available to eateries that are not part of a chain or franchise with more than 20 locations, which opens funding to a broad number of small businesses, ranging from restaurants and bars to wineries and food stands. Furthermore, $5 billion is set aside for the smallest restaurants, with annual revenue of $500,000 or less. Industry groups hailed the so-called Biden restaurant grants, which had strong Congressional support, as a lifeline. Sean Kennedy, an executive vice president of the National Restaurant Association, said, “It’s going to keep doors open. The smallest and hardest hit are going to get the help they’ve needed the most.”