• Enacted in 2010, the Healthy, Hunger-Free Kids Act (HHFKA) set rigid nutrition standards for schools and paved the way for the subsequent implementation of school meal rules that many in the industry argue have limited the flexibility of school foodservice providers, led to increased food waste in school cafeterias, and resulted in declining participation in the National School Lunch and Breakfast Programs. USDA’s Final Rule: Nutrition Standards in the National School Lunch and School Breakfast Programs, for example, imposes stringent sodium limits and whole grain and dairy requirements.  Recently, there have been increasing calls to scale back on these requirements.  For example, this past Spring (and as previously covered on this blog), U.S. Senator Pat Roberts (R-Kan.), Chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, sent a letter to the USDA urging regulatory relief from rigid school meal standards.
  • Last week, on July 6, 2017, USDA submitted an interim final rule on school nutrition flexibilities regarding milk, whole grains and sodium for review by the Office of Management and Budget (OMB).  The advancement of this rule follows on a May 2, 2017 proclamation by U.S. Secretary of Agriculture Sonny Perdue that the USDA would provide greater flexibility in nutrition requirements for school meal programs in order to make food choices both healthful and appealing to student.  Additional details on the rule will be made available pending clearance by OMB for its publication in the Federal Register.
  • The advancement of this interim final rule makes clear that USDA is serious about moving towards increased flexibility when it comes to school meal program nutrition requirements, with the complete rolling back of the previous administration’s school nutrition requirements a possibility.

The California Office of Environmental Health Hazard Assessment (OEHHA) just posted a new question and answer document on how the new Proposition 65 Clear and Reasonable Warning regulations apply to businesses.

  • As we previously reported on this blog, California’s OEHHA announced on September 2, 2016, a final rule concerning “clear and reasonable warnings” required under Proposition 65. In general, the new requirements attempt to provide consumers with more detailed information about potential chemical exposures and will be effective on August 30, 2018.
  • One of the questions concerns the obligations of suppliers of ingredients that contain a listed chemical. Included in the answer is the following:
    • “A company that manufactures… ingredients that include listed chemicals…would only have responsibility for a consumer warning if it has knowledge that the end use of the component part or ingredient will expose a consumer to a listed chemical at a level that requires a warning…”
    • “For example, if a manufacturer of a food ingredient knows that the ingredient is typically used at high enough concentrations to require a warning in certain types of prepared foods and could thereby result in an exposure under the Act, then the ingredient manufacturer should provide the warning notice to the product manufacturer. An ingredient manufacturer in such a situation may choose to work with the product manufacturer to evaluate whether the product should have a warning and may enter into a contract with product manufacturers to ensure that the warning is appropriately transmitted to the retailer and ultimately the consumer.”
  • Keller and Heckman LLP attorneys actively advise clients on compliance issues and enforcement actions related to California’s Proposition 65. If you have any questions about the implications of the new warning requirements or other related issues, please email prop65@khlaw.com.
  • The Canada-United States Regulatory Cooperation Council (RCC) is a joint initiative between Canada and the United States that facilitates regulatory cooperation between the two countries and aims to enhance economic competitiveness. The RCC was created in 2011 to facilitate closer cooperation between Canada and the United States to develop smarter approaches to regulations and to make both economies stronger and more competitive, while meeting the fundamental responsibilities to protect the safety and welfare of citizens.
  • Since 2012, the Canadian Food Inspection Agency (CFIA), in cooperation with the United States Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA), has developed annual joint work plans in the areas of animal health, meat inspection and certification, plant health, and food safety.
  • The CFIA recently launched a new web-based consultation tool to gather feedback from stakeholders on current RCC work plans in the areas of animal health, meat inspection and certification, plant health, and food safety.  With specific regard to meat inspection, for example, the 2016-2017 RCC work plan outlines steps that the CFIA and USDA’s Food Safety and Inspection Service (FSIS) will take to “achieve closer alignment between their slaughter and processed meat inspection system requirements, eliminate unnecessary or duplicative requirements, and identify areas of mutual interest and collaboration for modernization based on the best available science, technological advances and their respective meat inspection modernization approaches” to “further streamline the efficient export and import of meat through electronic certification processes.”
  • Stakeholders may provide feedback on the work plans through October 31, 2017.  Information gathered during this consultation period will be used to facilitate the development of the next iteration of RCC work plans for food safety, meat inspection and certification, animal health, and plant health.
  • For decades, the U.S. government has regulated genetically modified organisms (GMOs) under a regulatory framework called the “Coordinated Framework for the Regulation of Biotechnology” (Coordinated Framework).  The Coordinated Framework explains the different roles played by the three major agencies involved in the regulation of GMOs:
    • The Food and Drug Administration (FDA) regulates GMOs under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and ensures the safety and proper labeling of GMO-derived foods and feed.
    • The Environmental Protection Agency (EPA) regulates plant-incorporated protectants (PIPs) — a type of pesticide that is bioengineered into crops — under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and sets tolerance limits or exemptions from tolerance for pesticide residues on or in food and animal feed.  EPA also regulates certain biological control organisms under the Toxic Control Substances Act (TSCA).
    • The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) regulates GMOs under the Plant Pest Act.  APHIS reviews GM crops to determine whether they meet the definition of a “plant pest” and may pose risks to domestic agriculture.
  • On January 19, 2017, APHIS published a proposed rule to revise the Agency’s biotechnology regulations (82 Fed. Reg. 7008).  The proposed rule seeks to update the regulations in a number of areas, all within the Agency’s current statutory authority under the Plant Protection Act.
  • More specifically, APHIS is proposing a regulatory program in which it first assesses GE organisms to determine if they pose plant pest or noxious weed risks. If APHIS concludes that a GE organism does not pose a plant pest or noxious weed risk, then APHIS would not require a permit for the importation, interstate movement, and environmental release (outdoor use) of the GE organism. If, on the other hand, the Agency determines – based on a risk analysis – that controls on movement are needed, APHIS would require a permit and work with the regulated entity to establish appropriate permit conditions to manage identified risks to allow safe movement (i.e., import, interstate movement, or environmental release (regulated controlled outdoor use such as in field trials)).
  • In recent comments submitted to USDA, industry stakeholders have applauded the Agency’s proposed rule as underscoring the need to promote innovation in biotechnology and for proposing to ease regulation of gene-edited products.  But at the same time, industry has called out a number of proposed revisions as improperly expanding USDA’s review process in certain respects which could effectively hamstring developers before they can even begin testing products.
  • For example, one key provision would leverage USDA’s authority under the Plant Protection Act (PPA) to begin assessing genetically engineered  plants for their potential to become a “noxious weed,” which would potentially expand the Agency’s review process.  The existing regulatory review process is focused on assessing whether a biotech plant would be a “plant pest.”  The Agency’s proposed new approach would thus add a new layer of regulatory review.  The Biotechnology Innovation Organization, contends in its comments that APHIS already assesses plants for weediness under its existing regulatory review process and argues that the proposed rule “would create two parallel regulatory systems to evaluate the same risk, under the same statutory authority, in potentially inconsistent ways.”
  • In another set of comments, the National Grain and Feed Association and other organizations that represent companies that process and export grain and oilseeds urged USDA to withdraw the proposed rule on the basis that USDA did not consult with foreign markets and international regulators in preparing the proposed rule to ensure they would approve U.S. crop traits that would be commercialized under the proposed new system.
  • In light of industry’s feedback on the proposed rule, and with a new administration taking office since the issuance of the proposed rule, it is possible that USDA will go back to the drawing board on its plan to revamp its biotechnology regulations.  We will be sure to monitor developments on this issue as they unfold and report them to you here.
  • The U.S. Food Safety and Inspection Service (FSIS) announced in the July 3, 2017 Federal Register that, starting August 2, 2017, all shipments of imported Siluriformes fish and fish products (including catfish) entering the U.S. must be presented at an Official Import Inspection Establishment for re-inspection by FSIS personnel.
  • As previously reported on this blog, the 2008 and 2014 Farm Bills require FDA to divest its authority over the inspection of Siluriformes fish to FSIS, and on November 25, 2015, FSIS announced a final rule to establish an inspection program for both domestically-raised and imported Siluriformes fish. (That rule became effective on December 2, 2015, when it was published in the Federal Register.) On May 2, 2016, FDA announced the completion of the transfer of the domestic and import inspection program for Siluriformes fish and fish products to FSIS.
  • Not everyone agrees with transferring catfish inspection responsibilities to FSIS. On May 25, 2016, the U.S. Senate passed a joint resolution, J.Res.28, which stated, “Congress disapproves the rule submitted by the Secretary of Agriculture relating to Mandatory Inspection of Fish of the Order Siluriformes and Products Derived From Such Fish” (80 Fed. Reg. 75590; December 2, 2015), and such rule shall have no force or effect. However, the House did not vote on the measure before the end of the 2015/2016 session.
  • Catfish inspection has been under the jurisdiction of USDA since April 2016, while FDA continues to be responsible for the safety of all other seafood. The U.S. Government Accountability Office (GAO) is currently reviewing “the coordination between USDA and FDA, including the extent to which these agencies are leveraging each other’s resources to more effectively conduct their imported seafood oversight programs.” GAO had recommended in 2012 that Congress repeal provisions of the 2008 Farm Bill assigning FSIS responsibility for inspecting catfish. In a report on catfish inspection (last updated on March 1, 2017), GAO cautioned that “facilities that process both catfish and other seafood may potentially still be inspected by both FSIS and FDA.”
  • As previously covered on this blog, a number of local jurisdictions throughout the U.S. – like Berkeley, CA; Philadelphia, PA; San Francisco, CA; Oakland, CA; and Boulder, CO – have sought to introduce legislation to tax sweetened beverages.  Late last year, on November 10, 2016, the Cook County Illinois Board of Commissioners passed the Cook County Sweetened Beverage Tax Ordinance which would impose $0.01 per ounce on the retail sale of all sweetened beverages in Cook County.  The tax was slated to go into effect on Saturday, July 1, 2017.  But on June 27, 2017, the Illinois Retail Merchants Association – which represents more than 20,000 stores – and several grocers filed a complaint against the Cook County Department of Revenue to block the sweetened beverage tax, arguing that the tax is unconstitutional and too vague for stores to implement.  The Plaintiffs further contend that: (1) Cook County’s penny-per-ounce beverage tax violates the state constitution by imposing different taxes on similar beverage products and (2) the tax would make retailers vulnerable to becoming ineligible for the federal Supplemental Nutrition Assistance Program (SNAP) as the program prohibits purchasing food that has a state or local sales tax.
  • On Friday, June 30, 2017, Cook County Circuit Judge Daniel Kubasiak granted the Plaintiff’s request for a temporary restraining order (TRO), effectively putting Cook County’s penny-per-ounce tax on sweetened beverages on hold at least until July 12, 2017.
  • Looking ahead, it remains to be seen what, if any, impact the outcome of this lawsuit will have on the appetite of other U.S. jurisdictions to pursue such legislation.
  • As previously covered on this blog, in the Spring of 2012, ABC News aired a series of reports on “Lean Finely Textured Beef” (LFTB), referring to the product as “pink slime.” The media coverage of LFTB and resulting consumer concern led many quick serve chains to discontinue using beef that contains LFTB.  In addition, over 220,000 people signed an online petition calling on the USDA to stop using LFTB in the federal school lunch program.  Many beef producers and politicians in states with significant beef industries called ABC’s coverage of LFTB a smear campaign, and Beef Products Inc. (BPI), the South Dakota-based company that manufactures LFTB, sued ABC News and reporter Jim Avila for $1.9 billion in a defamation suit related to that network’s series of Spring 2012 reports that referred to LFTB as “pink slime.”
  • Last week, on June 28, 2017, the parties announced that they had settled the case.  The terms of the settlement have not been disclosed.
  • BPI said in statement that it was “extraordinarily pleased” to reach the settlement, which would give it “a strong foundation on which to grow the business” and that this “process” had helped establish that “lean finely textured beef” is “beef, and is safe, wholesome, and nutritious.”
  • ABC News has not retracted or apologized for its report, which remains available on its website, but noted that “continued litigation of this case [was] not in the company’s interest.”  The fact that ABC News ultimately agreed to settle the case (likely due, in part, to the expense and time associated with the litigation) could indicate that, going forward, news networks will use more care in sticking to the facts and avoid sensationalizing reports about food and other consumer products so as to reduce the likelihood of facing similar defamation challenges.
  • As background, China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) supervises and regulates the production of food-related products, such as food packaging materials, containers and food processing tools throughout China. AQSIQ also oversees the safety and quality of food imports and exports and collects and analyzes information on the safety of food imports and exports.  In particular, with respect to exports destined for China, AQSIQ Decree 145 [2012] (“Administrative Measures for Registration of Overseas Manufacturers of Imported Food”) requires that the Certification and Accreditation Administration of the People’s Republic of China (CNCA) obtain certification of compliance with the relevant standards, laws, and regulations of China for the following products: milk and milk products, seafood, infant formula, and/or formula for young children.
  • Yesterday, the U.S. Food and Drug Administration (FDA) announced that FDA and CNCA signed a Memorandum of Understanding (MOU) formally establishing a registration process for U.S. food manufacturers who export milk and milk products, seafood, infant formula, and/or formula for young children to China.  In short, the MOU between the FDA and the Chinese government formalizes a registration procedure in which third-party certifiers, on behalf of FDA, will audit U.S. dairy facilities to assure they comply with Chinese food-safety requirements.
  • This agreement comes as welcome news to many U.S. exporters, particularly within the dairy industry.  The U.S. Dairy Export Council reports that the MOU will increase access to China for more than 200 U.S. dairy exporters in the short-term and sets the stage for additional American companies to tap into the lucrative Chinese market going forward.
  • As previously reported on this blog, legislation requiring labeling of genetically modified (GM) foods and food ingredients was signed into law on July 29, 2016.  This law directs the U.S. Department of Agriculture (USDA) to develop regulations and standards to create mandatory disclosure requirements for bio-engineered foods by July 2018.  Under the new law, food companies would have three options to disclose GMO ingredients: the use of on-package text, a USDA-created symbol, or an internet link — i.e., a QR code printed on the package that directs customers to GMO information.
  • Yesterday, USDA’s Agricultural Marketing Service (AMS) posted a list of 30 questions to obtain stakeholder input to facilitate the drafting of mandatory disclosure requirements to implement the National Bioengineered Food Disclosure Law.  Many of the questions are open-ended in nature and request stakeholder feedback on how to best define certain terms, how to determine if a product requires a GMO label and what on-package symbol should be used to denote GMO ingredients. Notable questions include:
    • “What terms should AMS consider interchangeable with bioengineering, and what amount of a bioengineered substance present in a food should make it be considered bioengineered?”
    • “Will AMS require disclosure for food that contains highly refined products, such as oils or sugars derived from bioengineered crops?” In connection with this question, AMS notes that “many processed foods may contain ingredients derived from bioengineered crops, such as highly refined oils or sugars that contain undetectable levels of bioengineered genetic material such that they are indistinguishable from their non-engineered counterparts.  AMS is considering whether to require disclosure for foods containing those derived ingredients that may be undetectable as bioengineered.”
    • “Meat, poultry, and egg products are only subject to a bioengineered disclosure if the most predominant ingredient, or the second most predominant ingredient if the first is broth, stock, water, or similar solution, is subject to the labeling requirements under FFDCA. How will AMS determine the predominance of ingredients?”
    • “Should AMS consider more than one disclosure category?”
    • “If a manufacturer chooses to use text to disclose a bioengineered food, what text should AMS require for a text disclosure?”
    • “What are the reasonable disclosure options AMS should provide for food contained in very small or small packages?”
  • USDA is concurrently completing a study examining the challenges of GMO disclosure through a smartphone-scannable digital code for both consumers and retailers which could reignite controversy regarding the best way to inform consumers about GMO ingredients.
  • Looking ahead, USDA officials remain optimistic that the Agency remains on track to meet the July 2018 deadline to publish a final rule as mandated under the National Bioengineered Food Disclosure Law.  Presumably, the current request for stakeholder feedback is part of the Agency’s efforts to meet this deadline by soliciting feedback on the issues they anticipate will be the most contentious in the course of the formal rulemaking process.  Keller and Heckman lawyers stand ready to assist interested parties in submitting comments to provide USDA with expert industry insight on GMO labeling – one of the most controversial areas of food labeling and manufacturing today.
  • As previously covered on this blog, in 2013, the U.S. Department of Agriculture (USDA) implemented country of origin labeling (COOL) rules, requiring meat labels to indicate where animals were born, raised, and slaughtered.  Meatpacking and livestock commodity groups in the U.S., Canada, and Mexico challenged the COOL requirements via appeal to the World Trade Organization (WTO) and a lawsuit filed in the U.S. (alleging that the requirements infringe First Amendment rights).  The controversy surrounding mandatory COOL rules for beef products ultimately culminated in: (1) a WTO ruling that the COOL requirements violate U.S. trade obligations to Canada and Mexico and (2) Congress repealing COOL as of December 21, 2015.  As also covered on this blog, several states have since attempted to require retail meat products to bear a country-of-origin label.
  • On June 21, 2017, cattle producers banded together to file a lawsuit against USDA alleging that the agency is violating federal law by not requiring country-of-origin labeling on imported beef and pork.  The plaintiffs are the Billings, MT-based Rancher-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF), and Cattle Producers of Washington.  In brief, the complaint contends that USDA is required – but has failed – to mandate country of origin labeling on imported beef and pork.  The Plaintiffs argue that, under current USDA rules, multinational companies can sell beef and pork raised and slaughtered abroad with a “Product of USA” label alongside truly domestic products raised by U.S. ranchers which could potentially lead to consumer confusion regarding product origin.  Properly implementing COOL, they say, would curb any such confusion and allow consumers to more readily select domestic goods (if they prefer) which would, in turn, reward American producers.
  • The filing of this lawsuit comes just as USDA Secretary Sonny Perdue begins NAFTA discussions with his Canadian and Mexican counterparts.  Considering the trade implications associated with reinstating COOL, it remains to be seen how this latest COOL lawsuit will fare.