Food and beverage COVID-19 regulatory updates

As the coronavirus disease 2019 (COVID-19) pandemic continues to impact and influence the food and beverage industry, DLA Piper will issue regular updates related to key regulatory actions from relevant regulatory bodies, including the US Food and Drug Administration (FDA), US Department of Agriculture, and relevant state and local authorities as applicable. The below content is intended to build on our prior alert, which can be found here, to keep our clients and industry members aware of ongoing commentary and guidance from US regulators.

COVID-19: USDA country of origin labeling flexibility

On April 13, 2020, the US Department of Agriculture announced a temporary enforcement policy with respect to country of origin labeling (COOL) requirements to allow the re-distribution of food products intended for food service to be sold in retail establishments. More specifically, the USDA Agricultural Marketing Service (AMS) will not take enforcement action against the retail sale of covered commodities lacking the required country of origin or method of production label, as long as the covered commodity does not make any country of origin or method of production claims. “Covered commodities” include muscle cut and ground lamb, goat, chicken, and venison; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts, pecans, and macadamia nuts; and ginseng. 

The new USDA policy went into effect on April 20, 2020 and lasts for a period of 60 days. Its stated purpose is to enable suppliers with inventory labeled for restaurant use to distribute those products to retail establishments currently experiencing high demand due to the coronavirus disease 2019 (COVID-19) pandemic. Once the 60-day period has ended, COOL designations will once again be required at covered retail establishments.

FDA’s perspective on food safety and availability during and after COVID-19

On April 16, 2020, the FDA published a series of Q&As with Frank Yiannas, the FDA’s Deputy Commissioner for Food Policy and Response. These Q&As were issued in response to concerns over the security of the food supply, given reports of food plant closures, wasted food due to disrupted markets, and localized food shortages. Mr. Yiannas affirmed the FDA’s position that the FDA does not anticipate food products being recalled or withdrawn from the market due to workers in food facilities or on farms contracting COVID-19, since the virus is “more likely to be spread through person-to-person transmission.”

The FDA also reiterated that the retail supply chain remains strong and that it is working closely with the food industry to monitor any disruptions in the food supply chain that could cause shortages. The FDA also continues to work with farmers and manufacturers to redirect food that would normally be destined for use at retail operations to instead be sold at grocery stores. Alternatively, unused food originally intended for human consumption is being reallocated for use in animal food, in accordance with the guidelines for safe distribution posted by the FDA’s Center for Veterinary Medicine.

With respect to food monitoring and inspections, Mr. Yiannas stated that in-person routine surveillance inspections of farm and food facilities have been temporarily put on hold to reduce the risk of infection for FDA investigators, inspectors, and workers at these facilities. However, “mission critical inspections” necessitated by natural disasters, outbreaks of foodborne illness, Class 1 recalls, and inspections at firms with a poor food safety track record are still being performed. The FDA is also conducting some remote inspections involving the electronic submission of records by importers, and FDA’s Coordinated Outbreak Response and Evaluation Network remains fully staffed and continues to monitor for signs of foodborne illness. In addition, the FDA continues to expect the food industry to meet rules established by the FDA Food Safety Modernization Act but has put some inspections on hold during the COVID-19 crisis.

Rollout of Coronavirus Food Assistance Program

On April 17, 2020 US Secretary of Agriculture Sonny Perdue announced the roll out of the Coronavirus Food Assistance Program. This USDA program is aimed at helping farmers, ranchers, and consumers in response to COVID-19 and includes a $19 billion immediate relief program to “provide critical support to our farmers and ranchers, maintain the integrity of our food supply chain, and ensure every American continues to receive and have access to the food they need.”

To do this, the USDA plans to provide $16 billion in direct support based on actual losses for agricultural producers where prices and market supply chains have been impacted, and to cover marketing costs resulting from lost demand and short-term oversupply caused by COVID-19 for the 2020 marketing year. Additionally, the USDA is partnering with regional and local distributors whose workforces have been impacted by the closure due to COVID-19, and will purchase $3 billion in fresh produce, dairy and meat which will then be given to food banks, non-profits, and community and faith based organizations.

FDA temporary policy regarding third-party certification program

On April 22, 2020, the FDA announced that it would be providing temporary flexibility under the Accredited Third-Party Certification Program for foreign food entities and their products. The guidance was published in recognition of the current challenges with conducting onsite monitoring activities during the COVID-19 crisis and relaxes the requirement for recognized accreditation bodies (ABs) to conduct on-site monitoring of the performance of certification bodies (CBs) that have already been accredited, and the requirement that certificates be issued for a term only up to 12 months for already-issued certifications. Under the temporary policy, FDA does not intend to enforce certain onsite observation and certificate term requirements in the following circumstances:

“For recognized ABs monitoring their accredited CBs, FDA does not intend to enforce the requirements in 21 CFR 1.621(b) that, within 1 year after the initial date of accreditation and every 2 years thereafter, the recognized AB conduct onsite observations of a representative sample of regulatory audits performed by the accredited CB (or its audit agents) and that the recognized AB visit the CB’s headquarters (or other location that manages audit agents conducting food safety audits under the regulation), when:

• A recognized AB determines that it is impracticable to conduct onsite observations of regulatory audits or visit an accredited CB’s headquarters (or other location) due to government travel restrictions or advisories related to COVID-19; and
• The recognized AB conducts the annual comprehensive assessment of the performance of a CB it has accredited in accordance with 21 CFR 1.621(a) to determine whether the accredited CB is in compliance with the regulation.”

“For already-issued certificates, FDA does not intend to enforce the requirement that the accredited CBs issue the certificates for a term only up to 12 months (21 CFR 1.653(b)(1)), when:

• The accredited CB determines that it is impracticable to conduct a regulatory audit due to government travel restrictions or advisories related to COVID-19;
• The regulatory audit would ordinarily be needed to support the issuance of a new certificate under 21 CFR 1.653(a)(1);
• The accredited CB has already issued a food or facility certificates to the eligible entity under 21 CFR 1.653 that is due to expire;5
• The food or facility certificate has not been suspended or withdrawn by the accredited CB; and
• The accredited CB continues to adhere to the requirements of 21 CFR 1.654 regarding monitoring eligible entities to which they have issued certificates.”

The policy is intended to remain in effect for the duration of the COVID-19 pandemic, and accredited CB’s that have issued certificates with upcoming expiration dates are directed to contact the FDA at FDAthirdpartyprogram@fda.hhs.gov to discuss the term of the current certificates.

Boston to temporarily allow permitted restaurants to sell groceries in light of COVID-19

On April 24, 2020, Mayor Marty Walsh announced that the City of Boston will allow permitted restaurants to sell grocery items (including both food and non-food items) via delivery, curbside pickup, and takeout by waiving the required Retail Food Permit for the sale of uncooked foods. The new temporary policy and guidance was adopted in an effort to address access to food and essential items in light of COVID-19. Boston restaurants interested in selling groceries must follow procedures as outlined by the Inspectional Services Department (“ISD”). In conformance with the FDA’s Temporary Policy Regarding Nutrition Labeling of Certain Packaged Food During the COVID-19 Public Health Emergency, ISD has indicated that the sale of packaged food that lacks a Nutrition Facts label by restaurants is permissible in Boston provided that it does not have any nutrition claims and contains other information on the label, including:

1. Safe handling instructions;
2. A statement of identity;
3. An ingredient statement;
4. The name and place of business of the food manufacture, packer, or distributor;
5. Net quantity of contents; and
6. Allergen information required by the Food Allergen Labeling & Consumer Protection Act.

In order to receive approval, an applicant must review and agree to abide by the City of Boston’s Inspectional Services Department Guidance and all applicable state, local, and federal rules and regulations and laws regarding the sale of grocery items including the packaging and labeling of items, temperature required for handling and storage, and appropriate Department of Revenue rules. Subject establishments must also file an application with the Boston Licensing Board which contains the following information:

1. Confirmation that all City of Boston licenses and permits are current, and
2. Health, safety, and operations plan (the “Plan) or the Board’s review including:
   1. i. Overview of hours of operation; staffing levels; and COVID-19 related precautions;
   2. ii. Overview of types of types of food sold (prepared or unprepared; food products versus non-food products); anticipated volume (does the licensee intend to increase wholesale orders to accommodate); packaging of items (pre-packaged or packaged per customer e.g.: selling pre-packed one pound amounts of ground beef versus packaging at customer request for any amount); and method of purchase (take-out or delivery).

The Licensing Board will then review each plan and issue correspondence allowing the temporary sale of grocery items by the establishment. Applicants are required to return a signed copy of the correspondence to the Board via email at licensingboard@boston.gov prior to commencing the sale of grocery items.

Executive order mandating meat processing plants remain open

On April 28, 2020, President Trump signed an Executive Order on Delegating Authority Under the Defense Production Act with Respect to Food Supply Chain Resources During the National Emergency Caused by the Outbreak of COVID-19, (“Order”), ordering meat processing plants to stay open and designating them as critical infrastructure. The Order (not yet published on the federal register as of the date of publication) was signed in an effort to prevent anticipated shortages of pork, chicken, and other meat products, caused by the COVID-19 pandemic. Outbreaks of COVID-19 among workers at processing facilities have led to the reduction of those facilities’ meat production capacity. The Order indicates that “the closure of just one large beef-processing plant could result in 10 million fewer individual servings of beef in a day.”

The Order delegates authority to the Secretary of Agriculture, Sonny Perdue, to take actions to ensure that meat and poultry processors continue operations consistent with CDC and OSHA guidance, despite contrary state or local laws and guidelines. Acting in accordance with this direction, the USDA has indicated that it will work with the meat processing industry to ensure plants reopen, or continue to operate, safely pursuant to OSHA and CDC guidelines.

If you have any questions regarding these new requirements and their implications, please contact any member of DLA Piper’s Consumer Goods, Food and Retail group or your DLA Piper relationship attorney.

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This information does not, and is not intended to, constitute legal advice. All information, content, and materials are for general informational purposes only. No reader should act, or refrain from acting, with respect to any particular legal matter on the basis of this information without first seeking legal advice from counsel in the relevant jurisdiction.