• Earlier this month, the Federal Trade Commission (FTC) released a report which analyzes market factors contributing to the infant formula market disruptions that occurred in 2022 following the recall of infant formula manufactured at Abbot’s Sturgis, Michigan manufacturing facility due to potential bacterial contamination.
  • The report describes how the U.S. infant formula market has been highly concentrated among only a few manufactures for decades; primarily Abbot, Mead Johnson (owned by Reckitt Benckiser), Perrigo (owns PBM Holdings), and Nestle (which sold the U.S. and Canadian rights to Gerber Good Start brand to Perrigo along with its Wisconsin manufacturing facility). The report also discusses two principal factors which have contributed to market concentration.
  • One factor is the single-rebate system used in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) program. The WIC program, which is administered by USDA through state agencies, offers assistance, including nutritional assistance, to certain at-risk individuals. In 2018 56% of the infant formula sold in the U.S. was purchased by WIC participants. Infant formula purchased through WIC is heavily discounted because individual states negotiate significant rebates (averaging 92% of the wholesale price of infant formula in 2013) in exchange for market exclusivity within the state’s WIC program. These WIC-exclusivity agreements have spill-over effects in the broader infant formula market and dramatic (≈ 90%) increases or decreases in market share have been seen following the gain or loss of a WIC contract.
  • The report also discusses FDA’s extensive regulation of infant formula as a second factor contributing to market consolidation by acting as a barrier to entry. Infant formula must be of “sufficient biological quality” and must support growth, demonstration of which typically requires a specific 15-week preclinical study. Among the other requirements, new infant formula submissions are also required at least 90 days before marketing the formula.
  • The report is written in a neutral manner which details the primary factors contributing to the consolidation of the infant formula market, but acknowledges that these factors also have positive impacts (e.g., lower infant formula prices for WIC participants), and does not offer any recommendations.
  • Gerber filed a memorandum (Law360 subscription required) in support of its motion to dismiss a proposed class action that claimed the company had falsely advertised its baby food snack products as containing “no preservatives” even though they contained vitamin C. According to the lawsuit filed in November of 2023, the products were marketed in a misleading manner by bearing a label claim that they do not contain preservatives and listing the ingredient as “Vitamin C (Ascorbic Acid).” The plaintiffs allege that vitamin C is a preservative regardless of whether it is added to preserve the food or for some other purpose.
  • Ascorbic acid is generally recognized as safe for use in human food as both a chemical preservative and a nutrient. According to Gerber, the complaint is preempted because it conflicts with FDA’s regulatory scheme, “which does not require an ingredient to be labeled as a preservative unless it serves a preservative function.” Gerber claimed that vitamin C is used to fortify the products nutritionally, which are preserved through freeze drying, eliminating the need for further preservatives.
  • Gerber stated that consumers could not have been deceived by the “no preservatives” label since there is no ingredient in the products functioning as a preservative. It argued that it is “fanciful, illogical, and insufficient” to support a deception claim based on the theory that “no preservatives” should be interpreted to mean that there are no ingredients that could possibly function as a preservative, even if that is not their intended use.
  • This is one more case in a string of recent lawsuits challenging “no preservative” claims on products that contain ingredients that could function as a preservative. Keller and Heckman has previously blogged on and will continue to monitor these lawsuits.
  • On March 18, 2024, Pennsylvania became the latest state to propose a ban of several food additives, citing alleged safety.
  • Pennsylvania’s HB 2116 proposes to ban the use of the following color additives: red 3, red 40, yellow 5, yellow 6, blue 1, and blue 2.  As a companion bill, HB 2117 would prohibit the use of potassium bromate, brominated vegetable oil, and butylated hydroxyanisole.
  • As we have previously reported, California passed AB 418 in 2023, which bans the use of brominated vegetable oil, potassium bromate, propylparaben, and red 3 in any food product and goes into effect in 2027.  AB 418 originally proposed to ban titanium dioxide as well, but it was removed from the scope of this legislation by the state Senate on September 1, 2023 before reaching the Governor’s desk.   Other states have followed suit in proposing to ban these AB 418 substances (see Illinois’ SB 2637, New York’s S60551A, and New Jersey’s A5436, though California’s AB 418 is the only one yet to pass).  Titanium dioxide is also included in New York’s and New Jersey’s bills. 
  • Recently, California also proposed AB 2316, which would prohibit all public schools from offering, selling, or otherwise providing any food containing the following color additives: blue 1, blue 2, green 3, red 40, yellow 5, yellow 6, and titanium dioxide. 
  • In response to Pennsylvania’s legislation, the National Confectioners Association (NCA) has emphasized that the substances in question are cleared by the U.S. Food and Drug Administration (FDA).  NCA recently called on FDA to push back on state-by-state food safety policy and “assert its authority as the rightful national regulatory decision maker and leader in food safety.”
  • Keller and Heckman will continue to monitor and relay any developments in the food additive space.
  • On March 19, 2024, FDA issued Import Alert 99-49 (“Detention without Physical Examination of Foods Due to Chemical Contamination”), which recommends that FDA field personnel detain without physical examination products offered for import that have previously been found to be contaminated with harmful levels of chemicals, including PFAS.
  • FDA is authorized to refuse admission to food products if the articles appear to violate the Federal Food, Drug, and Cosmetic Act (the “Act”); physical examination is not necessary (21 USC § 381).
  • Companies which have been found to offer violative products for import will have their products added to the import alert’s “Red List,” subjecting future imports of those products to detention without physical examination. Once a product is subject to an import alert, the burden is on the importer to demonstrate to FDA that the product does not violate the Act.
  • It is not clear to what extent FDA will be testing imported food products for chemical contamination, including whether it will focus on particular product types.
  • Keller and Heckman is tracking the regulation of PFAS in various jurisdictions around the world and can assist companies in responding to concerns about PFAS in food and food packaging.
  • On March 15, 2024, the Consumer Brands Association (CBA) filed an amicus brief (Law360 subscription required) urging the 9th Circuit to keep a federal labeling rule allowing digital disclosure of genetic modifications to foods. The brief, which follows two similar briefs filed earlier in March by the federal government and sugar industry groups, tells the court that it “should not disturb” a 2022 ruling that left the National Bioengineered Food Disclosure Standard regulations largely intact after the rule was challenged by organic food organizations.
  • CBA’s SmartLabel tool is one program that is used widely on packaged goods to provide access to supplemental product information through a QR code. According to the amicus brief, vacating the digital disclosure provision of the regulations would instantly render millions of packages of food non-compliant, disrupt the manufacturing process, and delay the release of products while labels are revised. In addition, “any such instant change would threaten consumers’ access to safe, nutritious, and affordable foods and risk confusing consumers who . . . have increasingly begun to rely on digital disclosures.”
  • In the original lawsuit, filed in 2020, food advocacy groups claimed USDA’s rule was arbitrary and capricious because it did not deliver on the aims of the National Bioengineered Food Disclosure Act and that portions of the rule violated the First, Fifth, and Tenth amendments by limiting allowed disclosures and preempting state laws requiring additional disclosures.
  • CBA argued that the advocacy groups’ position that consumers would have difficulty accessing digital disclosures is incorrect since consumers have increased internet access and technological literacy, a telephone disclosure is also required, and the digital option reduces “the impact of over-warning on products.” According to CBA, vacating the rule could, in fact, further reduce consumer access to the information required by the disclosure rule while USDA amends the regulations. CBA also refuted the contention that there would be minimal industry disruption, claiming that an immediate change would leave food companies scrambling to interpret the court’s decision and that it would be impossible to make immediate packaging changes.  
  • On March 11, 2024, at the National Farmers Union Annual Convention, U.S. Department of Agriculture (USDA) Secretary Tom Vilsack announced the final rule to align the voluntary “Product of USA” label claim with consumer understanding of what the claim means.
  • USDA’s final rule allows the voluntary “Product of USA” or “Made in the USA” label claim to be used on meat, poultry, and egg products only when they are derived from animals born, raised, slaughtered, and processed in the United States.  The rule will prohibit misleading US origin labeling in the market, and help ensure that consumers receive truthful information.  The claim will remain eligible for generic label approval, meaning it would not need to be preapproved by USDA’s Food Safety and Inspection Service (FSIS), but would require the establishment to maintain documentation on file to support the claim.  These claims will need to include a description on the package of the preparation and processing steps that occurred in the US upon which the claim is made.
  • USDA also published an updated labeling guidance on the use of the voluntary US-origin label claims to provide examples of claims and the types of documentation that establishments may maintain to support use of the claims.  The guidance will be open for public comment for 60 days after publishing in the Federal Register.
  • Manufacturers voluntarily using the claim must comply with the final rule requirements by January 1, 2026.
  • In January of this year, FDA testing revealed the presence of toxic yellow oleander (Thevetia peruviana) in a number of dietary supplements containing Crataegus mexicana, which the supplements refer to as tejocote root, and in one case as “brazil seed.” We note that Crataegus mexicana can also be referred to by other names such as “Mexican hawthorn,” although none of the products that have been identified as contaminated use that name. Many of these products are advertised as weight loss supplements. The FDA testing followed the lead of an earlier Centers for Disease Control (CDC) investigation, which also revealed yellow oleander contamination in tejocote supplements.
  • FDA continues to receive adverse event reports. Many of the sellers have not recalled their product, so there are significant concerns that some of these products remain on the market. FDA states that yellow oleander can cause severe, or even fatal, neurologic, gastrointestinal, and cardiovascular adverse health effects.
  • While FDA has mandatory recall authority where a product is adulterated or misbranded and there is a reasonable probability that use of or exposure to the product will cause serious adverse health consequences or death, it has not yet instituted any mandatory recalls and has instead worked to remove listings for these products and/or facilitate voluntary recalls.
  • On March 4, 2024, FDA published a webpage discussing the use of titanium dioxide (TiO2) as a color additive in foods. The webpage, which references a color additive petition requesting to revoke the listing for the use of TiO2 in foods, represents a stronger FDA stance regarding the safety of the additive.
  • TiO2, listed at 21 CFR 73.575, is a synthetically prepared white pigment that may be safely used as a color additive in nonstandardized foods at no more than 1 percent by weight of the food. TiO2 may also be used as a colorant in food contact materials, such as packaging materials, under 21 CFR 178.3297.
  • FDA highlighted a recent report from the Joint Food and Agriculture Organization of the United Nations/World Health Organization Expert Committee on Food Additives (JECFA) that concluded that TiO2 is safe for use in food and that based on the available data, the total daily intake of the substance does not represent a hazard to health. Although the European Food Safety Authority (EFSA) took the position in a 2021 opinion that it could not rule out genotoxicity from TiO2, other international regulatory bodies have found the substance to be safe. According to the United Kingdom’s Food Standards Agency, Health Canada, and Food Standards Australia and New Zealand, there is no evidence to support that TiO2 presents any safety concerns when used in food. In addition, FDA stated that “some of the genotoxicity tests considered in the EFSA assessment included test materials not representative of the color additive, and some tests included administration routes not relevant to human dietary exposure.” Overall, FDA also did not identify genotoxicity concerns related to TiO2 and noted that the substance did not cause cancer in National Toxicology Program carcinogenicity studies.
  • The Codex Alimentarius Commission Committee on Food Additives will consider the JECFA and EFSA findings at its April meeting in Chengdu, China.
  • TiO2 was originally included in the list of substances California considered prohibiting in 2023; however, it was removed before the state passed the California Food Safety Act, banning four other substances from use in food.
  • Keller and Heckman will continue to monitor and report on any developments regarding TiO2.

  • The New York legislature has reintroduced S213B/A4424B to “protect children from junk food companies targeting them with false or misleading advertisements.” The bill passed the Senate last year, but failed to make it out of the Assembly’s Agriculture Committee. It has again advanced quickly out of committee in the Senate this year, but remains in committee in the Assembly.
  • General Business Law §§ 350 and 350-A currently prohibit false advertising generally, and Agriculture and Markets Law § 202-A prohibits false or misleading advertisements for food. Key provisions of the proposed law would:
    • Amend Section 202-A to require “special consideration” of whether food advertising is directed to children, in the analysis of whether food advertising is deceptive;
    • Amend Section 350-A to require a court to consider, in its deception analysis of food advertising, whether the advertising (1) “targets a consumer who is reasonably unable to protect their interests because of their age, physical infirmity, ignorance, illiteracy, inability to understand the language of an agreement, or similar factor,” or (2) is otherwise an “unfair act, practice, or conduct”;
    • Further amend Section 350-A to require that “special consideration” be given to advertisements directed to children, defined in another section as those “actually or apparently under the age of eighteen years.” The bill defines “consumer” as both “a person who is targeted by an advertisement” and “those acting on such a person’s behalf.” Consequently, the law would apparently apply not only to advertising aimed at children but also advertising aimed at parents or other caregivers, regardless of their age.
  • Conspicuously missing from the statute is any definition of “junk food,” making it difficult to interpret exactly what food advertising might be affected. These new provisions would be enforceable by state regulators, as well as the plaintiff’s bar, given language providing a private right of action.
  • Apart from the advertising implications, another provision would amend the mission of the Childhood Obesity Prevention Program – a Department of Health program developed in cooperation with other state agencies, including the Education Department. The provision would (1) strike current statutory language barring the program from “specifically targeting the elimination of any particular food group, food product, or food-related industry,” and (2) require the program to provide “education on access and the nutritional value of locally grown foods.” No definition of “locally grown foods” is provided.
  • Whether the law would survive a challenge based in the commercial speech doctrine remains to be seen. New York is currently litigating a lawsuit challenging its age restrictions on the sale of weight-loss and bodybuilding supplements to minors. The Bloomberg administration’s attempt to ban certain sales of sugary drinks in containers larger than 16 ounces garnered national attention before being struck down by the State Court of Appeals. On the other hand, the city’s 2006 ban on trans fats in restaurants ultimately caught on with other localities and eventually the FDA. In 2015, New York City began to require sodium requirements to be posted in chain restaurants, a practice upheld in court in 2017. More recently, New York reintroduced S6055A, a bill that would ban certain food additives in the state. That bill failed to pass last year.
  • Keller and Heckman will continue to monitor legislative and judicial developments affecting commercial speech and is always ready to assist advertisers seeking to take advantage of the full range of permissible speech.
  • On March 6, 2024, the U.S. Food and Drug Administration (FDA) sent a letter to all cinnamon manufacturers, processors, distributors, and facility operators in the US, reminding them of the requirement to implement controls to prevent contamination from potential chemical hazards in food, including ground cinnamon products.  The Agency also recommended the voluntary recall of certain ground cinnamon products sold by a number of brands at six different retail chains that were found to contain levels of lead.
  • This letter follows the recent incidents associated with certain cinnamon apple sauce pouches that resulted in lead poisoning in young children.  As we have previously blogged, FDA’s investigation into the contaminated apple sauce pouches traced the contamination back to a manufacturer and cinnamon supplier in Ecuador.
  • FDA notified the distributors and manufacturers of products found to contain elevated levels of lead and recommended that the manufacturers voluntarily recall these products because prolonged exposure to them may be unsafe.  The products were identified during an FDA-initiated sampling and testing effort to assess cinnamon sold across numerous retail stores.  No illnesses or adverse events have been reported to date related to the ground cinnamon products listed in this news release, but the FDA is concerned that, because of the elevated lead levels in these products, continued and prolonged use of the products may be unsafe.
  • Since the issuance of the letter, recipient companies El Chilar and Raja Foods, as well as Stonewall Kitchen and Colonna, have issued voluntary recalls for some of their cinnamon products.
  • FDA continues to work with the Center for Disease Control and Prevention (CDC), as well as state and local partners, to investigate elevated lead and chromium levels in individuals with reported exposure to apple cinnamon fruit puree pouches.  Keller and Heckman will continue to monitor and relay any developments in this area.