Food and Beverage News and Trends

Food and Beverage News and Trends Series

Food and Beverage News and Trends

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

  • Six consumer groups ask major food companies to oppose regulatory reform bill. On April 11, a coalition of six consumer organizations sent a letter to 11 major food manufacturers, retailers and restaurant chains, calling upon them to oppose a proposed bill that they say would stand in the way of future legislation to improve food safety. The proposal is the Regulatory Accountability Act, which is due for US Senate consideration in May and already passed the House of Representatives this year. The bill is intended to eliminate regulatory red tape and duplication of federal regulations, but, the six groups say, "would paralyze the federal response to emerging public health and safety threats, including threats to food safety." The six nonprofit groups are the Center for Science in the Public Interest, Consumers Union, the Consumer Federation of America, the Environmental Working Group, Food and Water Watch, and Food Policy Action. In March, the coalition sent a similar letter to the Senate Committee on Homeland Security and Governmental Affairs committee, whose top two figures – Senators Claire McCaskill (D-MO) and Ron Johnson (R-WI) – have since voiced strong opposition to the bill. 
  • US, Australia food safety systems recognized as comparable. Australia's Department of Agriculture and Water Resources and the FDA have signed an arrangement recognizing each other's food safety systems as comparable. The FDA press release states that the two agencies thus "have confidence that they can leverage each other's science-based regulatory systems to help ensure food safety." The benefits include food inspection and admissibility, but, more importantly, systems recognition, which establishes a framework for regulatory cooperation in areas ranging from scientific collaboration to outbreak response. The FDA notes that even with the new arrangement, "Imports from Australia must continue to comply with US statutory and regulatory requirements." This is only the third time the FDA has recognized a foreign food system as compatible. The others: those of New Zealand and Canada.
  • Nominee for FDA chief says he is open to delay in Nutrition Facts label requirements. In congressional testimony on April 5, Scott Gottlieb, the Trump Administration's nominee to head the FDA, indicated he is open to the idea of postponing the deadline for companies to comply with the new Nutrition Facts Panel requirements. The deadline is currently July 26, 2018 for large food companies and July 26, 2019, for companies with less than $10 million in annual food sales. The food industries are on record as supporting a delay until 2021 because of what they see as the time, expense and difficulty in complying with the rule. Industry groups have said compliance could cost the industry as much as $4.6 billion. Gottlieb spoke at his confirmation hearing before the Senate Health, Education, Labor and Pensions Committee.
  • GMOs are back on the USDA agenda. On April 14, Politico reported that Sonny Perdue, the new secretary of agriculture, needs to take action on the labeling of genetically modified organisms (GMOs) because, last year, Congress passed a law instructing the USDA to finalize a federal disclosure standard for the presence of GMOs. That law gives USDA until July 29, 2018 to release the final disclosure standard. Congress did define the term "genetically modified ingredients" and instructed the department to permit the use of a symbol, label or electronic disclosure to identify them, but, on other issues, it punted to the USDA. Among these issues: what the packaging symbol to denote the presence of GMO ingredients should look like, and the amount of genetically engineered contents in a product that would trigger labeling. Secretary Perdue will have to decide these issues. Before leaving office, then-Secretary Tom Vilsack made considerable headway in crafting the required GMO rules; by the time President Donald Trump took office, Vilsack and his staff had prepared a draft notice seeking comment on what the rule should look like – though it has never been made public – and a study required under the law on access to information provided by electronic disclosures is under way. That study, said a USDA spokesman, is set to be completed by the July 28, 2017 deadline that Congress laid out.
  • Consumer finds dead bat in salad mix; recall ensues. The federal Centers for Disease Control and Prevention said that on April 9 it received a dead bat from a Florida consumer who claimed it was found inside a bag of Fresh Express Organic Marketside Spring Mix. The CDC began an immediate investigation and recommended rabies treatment for two people. Fresh Express recalled the product from all outlets where it had been sold in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Virginia. stating, "Fresh Express takes matters of food safety very seriously and rigorously complies with all food safety regulations including the prescribed Good Agricultural Practices."
  • Nonprofit urges USDA to begin testing foods for glyphosate. On April 17, Food Policy Action, a nonprofit organization, issued an online petition urging the USDA to reconsider its decision not to test foods for glyphosate, the world's most frequently used herbicide and the active ingredient in Monsanto's Roundup product. The World Health Organization has termed glyphosate a probable cause of cancer; the State of California has also found the herbicide to be a carcinogen; but the US EPA has not found a link between the chemical and cancer in human beings. "Resume plans to test the toxicity of glyphosate in our food," the petition reads. "The safety of the American public and its trust in your responsibility to keep our food supply safe depends on it." Earlier this year, the EPA made plans to test corn syrup for glyphosate, but it dropped that idea in March.
  • Study shows reduction in soda sales in wake of Berkley soda tax. A study published April 18 indicates that two years after Berkley, California implemented a soda tax, sales of sugary sodas have decreased by 9.6 percent. At the same time, sales of unsweetened beverages increased by 3.5 percent and sales of bottled water increased by 15.6 percent. The scientific study was funded by Bloomberg Philanthropies, a proponent of soda taxes. Lynn Silver, a co-author of the study and senior adviser to the Oakland Public Health Institute, said, "I think it's because of a growing awareness that sweetened beverages are the most problematic from a health standpoint and have no nutritional value. It suggests the tax accomplished what it wants to do without hurting local business or consumers. The Berkeley tax is a home run." Other cities have followed Berkeley's lead and enacted soda taxes. Santa Fe, New Mexico is set to vote on such a measure on May 2.
  • California business group opposes state bill to require warnings on sugary beverages. On March 22, the California Chamber of Commerce sent a letter to all members of that state's Senate Committee on Health expressing opposition to a pending state bill that would require warnings about diabetes, obesity and tooth decay on sugar-sweetened beverages sold in California. The group termed the bill "a job killer" and noted that under the bill, manufacturers of sweetened beverages would not only face civil fines of up to $500 but would also have to defend themselves against private lawsuits. "It is conceivable that a class action suit would be brought based on the assertion that consuming these beverages contributes to a person's obesity, diabetes and tooth decay that companies would be held liable for millions of dollars of awards for a person's choice to consume the beverage," the chamber wrote. The bill is scheduled for a hearing on April 19.
  • Article looks at consequences of a soft-drink tax in America – 100 years ago. In an April 6 article, the Washington Post reviewed the little-known history of a tax on sweetened beverages that was imposed by Congress 100 years ago, during World War I. According to the article, the measure proved ineffective and unpopular. This tax, unlike the measures that have been enacted in the 21st century, had nothing to do with health and was entirely designed to raise federal revenue for the war effort. The tax was repealed shortly after the war ended. Ajay K. Mehrotra, executive director of the American Bar Foundation and a professor of legal history at Northwestern University who was interviewed for the article, said the tax "was almost inconsequential as a revenue-raiser – it made hardly any money. And I don't think the states passing those taxes now will make much money, either." See our recent coverage of the revenue-raising Philadelphia soda tax.
  • Why would the FDA not inform the public of the source of contaminated food? In its April 3 issue, Food Dive magazine asked why it took so long for the public to learn that the source of the E. coli that contaminated nut butter products made by the SoyNut Butter Co. was Dixie Dew Products, a contract manufacturer. The magazine noted that the FDA often takes the position that it is barred under federal law from revealing "confidential company information" to the public in this situation. Food Dive pointed out that critics say the agency's interpretation of this law "is obtuse, and that in the case of public safety, business concerns should take a back seat... Meanwhile, consumers are kept in the dark, and can only hope a company will be diligent enough to notify them if they purchased tainted product."
  • US Solicitor General opposes high court review of food executives' sentences. On April 12, Jeffrey B. Wall, the Acting Solicitor General of the United States, filed a brief opposing any further Supreme Court review of the sentencing of father and son Austin "Jack" DeCoster and Peter DeCoster for misdemeanor food safety violations at Quality Egg, their Iowa-based egg production company. The DeCoster's long-term criminal conduct, the US Department of Justice said last year, caused a massive nationwide salmonella outbreak in 2010 which sickened more than 1,900 people and led to the recall of 550 million eggs. The DeCosters pled guilty as "responsible corporate officials" for allowing salmonella-adulterated food from their egg production businesses to enter interstate commerce. Quality Egg also pled guilty to felony charges of bribing a USDA inspector and shipping eggs with false processing and expiration dates and paid a $6.8 million fine. In January this year, attorneys for the DeCosters filed a writ of certiorari requesting that the court review their sentences; several business groups have petitioned the high court to hear the case on the grounds that the sentences were "draconian" and, in jailing the "responsible corporate officials," were contrary to Supreme Court precedent. The Acting Solicitor General's move is being seen by some as a possible early indication of the Trump Administration's views on food safety and corporate crime.