Food and Beverage News and Trends

Eggs in carton

Food and Beverage News and Trends

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.

  • USDA will hold major public meeting on Salmonella contamination. On August 21, the USDA announced it will hold a virtual public meeting on Salmonella contamination of food. The September 22 meeting, to which the public and all food industry stakeholders are invited, will involve USDA officials and officials from the FDA and CDC. At the meeting, the USDA will discuss its commitment to reducing contamination by focusing on science, building relationships, and influencing behavior to decrease Salmonella infections and save lives. The week before the public meeting, the department will release its Roadmap to Reducing Salmonella: Driving Change through Science-Based Policy, describing how the department will advance science-based programs and policies and promote innovation to reduce Salmonella in meat, poultry, and egg products. The public meeting is a part of the department’s efforts to be transparent and to share data with stakeholders, including regulated establishments, other government agencies, industry groups, and the public.
  • FDA specifies new procedures to be used when certain foods are declared “gluten-free.” On August 12, the FDA issued a final rule relating to “gluten-free” claims in fermented and hydrolyzed foods such as soy sauce, yogurt, pickles, cheeses and green olives. During the processes of fermentation and hydrolyzation, gluten breaks down chemically and current analytical methods aren’t able to determine whether these products actually meet the definition of “gluten-free.” The rule therefore requires manufacturers of these food products to make and keep records providing adequate assurance that the food meets the definition of “gluten-free” before fermentation or hydrolysis, that the manufacturer has adequately evaluated the potential for cross-contact with gluten during the manufacturing process, and if necessary, that measures are in place to prevent the introduction of gluten into the food during the manufacturing process. FDA Commissioner Stephen M. Hahn, MD, stated, “The FDA continues to work to protect people with celiac disease, which impacts at least 3 million Americans.” He added, “The agency has taken a number of steps on this front by first establishing a standardized definition of ‘gluten-free,’ and now by continuing to work to ensure manufacturers are keeping the products that are labeled with this claim gluten-free.”
  • Nonprofits and seafood industry clash over federal dietary guidelines. At a public meeting August 11, public interest groups and the seafood industry clashed about what recommendation regarding fish consumption should be made in the 2020-2025 Dietary Guidelines for Americans. The Center for Science in the Public Interest and the National WIC Association urged the USDA and the Department of Health and Human Services to recommend in the upcoming guidelines that specific fish should be preferred – primarily those that have higher levels of omega-3s and lower levels of methyl mercury. Methyl mercury, when ingested by pregnant women, has been linked to poorer cognitive development in infants and children. However, the seafood industry urged the federal agencies not to make such distinctions among different fish, saying that there is no evidence of adverse effects on infants and children from eating seafood. The issue remains pending before the agencies.
  • Hello Fresh recalls onions. On August 19, the meal-kit company Hello Fresh issued an “Urgent Onion Recall Notification” calling on its customers to discard all onions received from May 8 through July 31, 2020. This is the latest development in the nationwide recall of red, yellow and white onions from Bakersfield, California-based Thomson International which are potentially contaminated with Salmonella bacteria. The FDA’s warning about the implicated onions covers all 50 states and the District of Columbia and includes red, white, yellow and sweet onions. A similar warning has been issued in Canada. In the US, the onions were sold – both in banded bags and as loose onions – at stores including Walmart, Kroger, Fred Meyer, Publix, H-E-B, Giant Eagle, Costco, Ralph’s, Trader Joe’s and Food Lion. At this writing, 869 confirmed Salmonella cases have been reported in the US and 339 in Canada. The recall has been expanded to include prepared foods containing onions, such as salsas, salads, prepared dinners, cheese dips, and deli items. Hello Fresh advised its customers that they “should immediately discard all onions received. We also recommend extra caution in disinfecting and sanitizing surfaces and containers that may have come in direct contact with these products, as recommended by the FDA,” and it noted that cooking the onions to 165ºF/74ºC, as instructed in its recipes, will kill the bacteria. See our earlier reporting about this outbreak.
  • Egg producer faces allegations of price gouging during pandemic. On August 11, New York State Attorney General Letitia James announced the state is suing Hillandale Farms, one of the nation’s largest egg producers, for systematically raising the price of eggs during the coronavirus disease 2019 (COVID-19) pandemic. “As this pandemic ravaged our country, Hillandale exploited hardworking New Yorkers to line its own pockets,” James said. The lawsuit was triggered by complaints from consumers, often from low-income neighborhoods already affected by food insecurity, about the sudden price rise. James noted that in January, Hillandale had been selling a dozen large white eggs to Western Beef supermarkets for as little as 59 cents a dozen; by the end of March, it was charging that company as much as $2.93 a dozen, and it similarly, sharply raised prices for other chains, wholesalers, and military base commissaries across the state. The higher prices, the lawsuit says, did not reflect increased costs of production, simply higher demand as consumer needs suddenly changed. John Figura, assistant attorney general in the Bureau of Consumer Frauds and Protection, said New York law “prohibits businesses from charging excessive prices for vital and necessary consumer goods during periods of abnormal market disruption,” including the pandemic. The AG’s office seeks an accounting of all Hillandale Farms egg sales in New York since November and restitution for the customers who were overcharged, plus a civil penalty of $25,000 and disgorgement of all profits from the price gouging. In a statement on August 12, Hillandale Farms denied the allegations.
  • Court issues order against California’s regulation of vegan butter. On August 21, the District Court of the Northern District of California issued an order blocking attempts by the State of California to prevent the vegan foods company Miyoko’s Kitchen from using the terms “butter,” “lactose-free,” and “cruelty-free” on its vegan products. Last year, the state’s Department of Food & Agriculture told the company to stop using those terms for its plant-free butter product, which is made from coconut oil, sunflower oil and cashew nuts, because it is not a dairy product. Miyoko sued on First Amendment grounds; early this year the court issued an order granting a preliminary injunction preventing the state from enforcing its claims. The court wrote that nowhere in the record of the case did the state “present testimony from a shopper tricked by Miyoko’s vegan butter or otherwise make the case for why Miyoko’s substitute spread is uniquely threatening to the public weal.”
  • Trader Joe’s is sued over labeling of crackers. On August 14, Trader Joe’s became the target of a federal lawsuit that asserted its 12 Grain Mini Snack Crackers carry misleading labeling. According to the lawsuit, which was filed in the US District Court for the Eastern District of New York, the crackers are labeled in a deceptive manner because they contain only “a de minimis amount of the 12-grain blend, less of the 12-grain blend than consumers expect and predominantly enriched white flour.” The complaint notes that in the product’s list of ingredients, enriched flour is listed far ahead of 12-grain blended flour, indicating that enriched flour is a predominant ingredient. The complaint says, “The name ‘12 Grain Mini Snack Crackers’ is misleading because it suggests and identifies one of the ingredients — the 12-grain blend — yet fails to disclose another more predominant ingredient, like refined white flour.”
  • Kroger is sued over labeling of “Just Fruit” products. On August 6, a consumer in Portland, Oregon filed a putative class action suit against the Kroger Company, alleging its “Just Fruit” brand of jams carries misleading labeling. The complaint, filed in the US District Court for the District of Oregon, seeks damages of more than $5 million for a class of grocery purchasers. The Kroger “Just Fruit” brand is a line of jams labelled as “spreadable fruit.” The lawsuit claims that, despite the name of the product, its first ingredient is listed as fruit syrup, and the product contains a number of other non-fruit ingredients, such as sweeteners, added sugars, apple juice concentrate, pectin and calcium citrate. The suit goes on to assert that purchasers pay more for the product than they would otherwise have paid, on the assumption that it is composed entirely or largely of fruit.
  • Court rejects claim that standard serving sizes of buttery spray are too small. On August 12, the US district Court for the Northern District of California granted summary judgment in favor of Conagra Foods in a lawsuit alleging that the labeling for Conagra’s Parkay Spray uses artificially small serving sizes to disguise the product’s true fat and calorie content. The product is now considered a spray-type fat and oil with a Reference Amount Customarily Consumed (RACC) of 0.25 grams. The plaintiffs alleged that the spray is in fact a butter substitute rather than a spray and should be evaluated with the used for butter substitutes such as margarine or shortening. The court found, however, that the product cannot be used interchangeably with butter or margarine. The plaintiffs had sought a ruling that the labeling of the spray violates the consumer protection laws of California and Hawaii, but the court held that to do so would be to impose state law requirements for the product that are not identical with the federal requirements and, thus, that the deceptive labeling claims are preempted as a matter of law.
  • Complaint says “Maine salmon” is not sustainably produced and not from Maine. The Organic Consumers Association filed a lawsuit July 30 asserting that fish distributors Mowi Ducktrap and Mowi USA deceptively marketed their smoked salmon sold under the brand Ducktrap River of Maine. The complaint, filed in the Superior Court of the District of Columbia, alleges that fish marketed as sustainable salmon from Maine was raised on fish farms outside the United States, using antibiotics including oxytetracycline and a formaldehyde-based disinfectant and bleach. According to the complaint, the companies represent that their salmon is “sustainably sourced in accordance with higher environmental and animal welfare practices,” but in reality, the salmon are “farmed using unsustainable and environmentally destructive practices.” Moreover, the complaint says, rather than being farmed off the coast of Maine, the salmon come from fish farms in Chile, Scotland, Iceland and Norway. The complaint alleges numerous violations of the DC consumer protection statute.
  • Panera Bread “clean food” lawsuit. In a class action complaint filed August 13 against Panera Bread, a customer is alleging that the company falsely markets its menu items as “clean food.” The plaintiff asserts that Panera markets all its US menu items as “clean” or “100 percent clean,” meaning that they contain no artificial preservatives, colors, flavors or sweeteners. In fact, according to the complaint, the products contain multiple “artificial, chemical, and/or synthetic preservatives, sweeteners, flavors, and colors.” The case was filed in the Circuit Court of St. Louis, Missouri. According to the complaint, Panera’s products contain such ingredients as ascorbic acid, citric acid, potassium sorbate, tocopherols, Blue 1, canola oil, folic acid, cellulose, glycerin and high-fructose corn syrup.
  • Court dismisses some claims concerning fruit snacks but keeps other claims alive. On August 10, the District Court of the Eastern District of New York dismissed some claims in a lawsuit concerning the labeling of Arizona Fruit Snacks, which are made by Arizona Beverages Co., a subsidiary of Hornell Brewing Co. Inc. The lawsuit alleges Hornell misled consumers by labeling the gummy snacks as “all natural” even though they contain synthetic ingredients such as ascorbic acid, glucose syrup, citric acid, gelatin and dextrose. The court rejected Arizona’s effort to have the case dismissed on the grounds that the FDA holds primary jurisdiction over the issue of “natural” claims. It also held that the plaintiff had pleaded the case with sufficient detail about the type of harm that was suffered from the alleged misrepresentations. However, the judge dismissed claims brought under the Magnuson-Moss Warranty Act for a lack of written warranty as well as a claim for injunctive relief.
  • California’s ban on local soda taxes faces challenge in state court. A lawsuit was filed in California state court August 10 challenging the state’s 2018 law that prohibits California cities from enacting new taxes on sugar-sweetened beverages until 2031. According to the lawsuit, the law is illegal because it stands in the way of local governments’ authority to raise taxes for public services. The lawsuit was filed on behalf of Santa Cruz City Councilmember Martine Watkins and Cultiva La Salud, a nonprofit that is dedicated to creating health equity in California’s Central Valley by fostering changes in communities that support healthy eating and active living. The lawsuit attacks a provision in the state law that prohibits cities from imposing new taxes or fees on groceries. The city of Santa Cruz had been in the process of placing a tax on sugary beverages on the ballot for voter approval; the 2018 state law halted all such efforts. The states of Arizona, Washington and Michigan also have laws in place banning taxation of grocery products by cities and towns.
  • Oregon agency considers permanently loosening rules on alcohol delivery. On August 4, the Salem Reporter, an Oregon newspaper, reported that the Oregon Liquor Control Commission is considering adopting a new rule that would make permanent several regulatory changes that were adopted as a result of the COVID-19 pandemic. The new rule would, among other things, make it easier for breweries and other businesses that sell alcoholic beverages to consumers to deliver their products with same-day delivery. Because of the pandemic, the liquor commission decided in March to allow businesses with liquor licenses to deliver their products to customers at curbside. It also, on a temporary basis, made it considerably easier for such businesses to obtain permission to make same-day deliveries. At this point, the commission is considering making these changes into permanent ones to benefit businesses in the state.

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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.