This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.
- A new legal problem crops up for Cook County beverage tax. The Illinois Department of Human Services told the Cook County Board of Commissioners on August 10 that the county's new penny-per-ounce tax on soft drinks violates federal law in the way that it taxes low-income consumers who receive benefits under the federal Supplemental Assistance Nutrition Program (SNAP). Purchases made with food stamp benefits are exempt from the soda tax under federal law, but, at present, Cook County is having retailers collect the tax from SNAP recipients, then immediately refund the amount to them in a separate transaction – an approach that USDA says violates federal law. The federal government said it will suspend the payment of SNAP funds to the State of Illinois – monies amounting to $87 million a year – if this approach is not fixed. The tax also continues to face a separate appeal in state court of a case filed against the county by the Illinois Retail Merchants Association.
- Philadelphia's beverage tax has a different problem, editorial says. Meanwhile, the Wall Street Journal wrote in an editorial on August 13 that Philadelphia's soda tax has produced less revenue than anticipated, has hurt low-income workers and may have led to an increase in beer consumption. A new report by the Tax Foundation shows that soft-drink sales in Philadelphia are down by as much as 45 percent after the tax, the editorial said, and one leading soda bottler has laid off 20 percent of its work force there. As far as beer consumption is concerned, the article noted that the excise tax on beer is eight cents a gallon, while a gallon of soda is taxed at $1.92, which, the editorial suggested, is inducing some consumers to shift their drinking habits to beer.
- FDA delays effective date of e-cigarette regulations. On July 28, the FDA announced it is extending until 2022 the timelines for tobacco product manufacturers to submit tobacco product review applications. Applications to market newly-regulated non-combustible products, such as electronic nicotine delivery systems (ENDS) or e-cigarettes, should be submitted by August 8, 2022. The delay is part of the agency's announcement of a new comprehensive plan "placing nicotine, and the issue of addiction, at the center of the agency's tobacco regulation efforts," the agency said. "This plan will serve as a multi-year roadmap to better protect kids and significantly reduce tobacco-related disease and death." FDA also said it intends to issue an Advance Notice of Proposed Rulemaking to seek public comment on the role that flavors in tobacco products play in attracting youth, as well as the role they may play in helping some smokers switch to potentially less harmful forms of nicotine delivery. The rapidly expanding vaping industry offers tens of thousands of flavor options, most of them food based; observers have commented that many new users are young people who did not previously use tobacco. In late June, San Francisco city supervisors moved to ban sales of flavored vaping liquid as well as sales of menthol cigarettes.
- FDA tells federal court that New York City's menu-labeling rule is pre-empted. On August 14, the FDA filed a "statement of interest" on behalf of the US government in a federal lawsuit filed by a group of restaurants in New York City challenging that city's new menu-labeling requirements regarding caloric content. The FDA took the position that, because of the pending federal menu-labeling requirements as part of the Patient Protection and Affordable Care Act of 2010, the city ordinance is pre-empted at this time. Thus, New York City is not legally permitted to begin enforcement of the requirement in August 2017, nine months before the deadline set by the FDA for the federal menu labeling law. The FDA wrote, "The [Affordable Care] Act unequivocally demonstrated Congress's intent that menu labeling requirements be established with national uniformity, specifically through regulatory requirements to be set by the FDA. To fulfill that purpose, the FDA has been tasked with determining when and in what circumstances uniform menu-labeling rules will be enforced across the nation. The City may not choose to take its own path in the face of this clear expression of Congressional purpose."
- FDA declines to grant seal of approval to popular vegetable burger. On August 8, The New York Times reported that the FDA has withheld its approval of the "Impossible Burger," a vegetable burger that has become popular in upscale restaurants across the country. The Impossible Burger relies on soy leghemoglobin, a substance found in soybean plants, for much of its meatlike flavor and appearance. The manufacturer of the burger, Impossible Foods, wants the FDA to formally declare that the burger is safe for human consumption, but the agency has declined, saying that the product's key ingredient has never been consumed by humans and may be an allergen. Impossible Foods can, however, still sell its burger, since the FDA did not find that soy leghemoglobin was unsafe. The company plans to resubmit its petition to the agency.
- Brucellosis from raw milk. The Texas Department of State Health Services is warning consumers not to drink raw milk from K-Bar Dairy, a licensed raw milk producer based in Paradise, Texas, due to an outbreak of brucellosis, At least one person remains hospitalized with an antibiotic-resistant strain of Brucella bacteria after drinking milk from K-Bar, and an array of dairy products from the company are being recalled. The DSHS also issued a health alert to Texas health professionals calling on them to familiarize themselves with the symptoms of Brucellosis, "since it is an uncommon infection and can present with a wide variety of non-specific symptoms and signs that can wax and wane over weeks or even months." Symptoms of the disease can also linger for months, and sometimes are permanent. "DSHS is investigating additional illnesses that may be connected to this product and advising people who consumed milk from this dairy since June 1 to consult with their health care provider," the agency's press release states.