• As previously covered on this blog, a number of local jurisdictions throughout the U.S. have sought to implement a “soda tax”. (See our February 27, 2017 blog and November 15, 2016 blog.) Now Connecticut is considering taxing certain sweetened beverages. Connecticut H.B. 7314 was referred to the Joint Committee on Finance Revenue and Bonding on March 29, 2017 and the committee held a hearing on the legislation earlier this month.
  • The bill would impose a one cent per ounce tax at retail on sweetened beverages. A sweetened beverage is defined as prepackaged, carbonated or noncarbonated nonalcoholic beverage that contains an added caloric sweetener. Milk, nondairy creamers, 100% juices, infant formula and medical food would be exempted. The funds collected from the tax would be placed in a separate account and be used to fund early childhood education and outreach efforts aimed at reducing obesity, heart disease and diabetes.
  • The Hartford Business Journal reported that during the public hearing on the legislation, Republican committee members expressed concern that the money raised from the tax—estimated to be about $145 million annually—would not be spent on the intended programs. Others pointed out that about a third of the tax would be paid for by households that make less than $40,000 per year and that many people would purchase sugary beverages, along with other groceries, in neighboring states if the tax was implemented. Connecticut Voices for Children, Dr. David Katz (Director of Yale University’s Prevention Research Center and former Editor-in-Chief of the journal Childhood Obesity) and others who testified in favor of the legislation suggested that that tax would reduce soda consumption and, therefore, have health benefits. We will continue to monitor efforts by states and local jurisdiction to tax soda and other beverages.
  • As previously covered on this blog, in May 2016, FDA issued final rules to implement changes to the nutrition and dietary supplement labeling and serving size regulations. Mandatory compliance with the new nutrition labeling requirements for food products that are initially introduced into interstate commerce is currently slated for July 26, 2018 (or July 26, 2019 for manufacturers with less than $10 million in annual food sales).  As the compliance deadline steadily approaches, some in the industry have sought to delay the rule’s implementation.  And, as reported on this blog last week, Scott Gottlieb, President Trump’s nominee to head the FDA has expressed a willingness to consider postponing the deadline for implementing the Nutrition Facts Panel label changes.
  • Against this backdrop, Susan Mayne of FDA’s Center for Food Safety and Applied Nutrition recently announced that FDA is considering requests to maintain the schedule for revamping the Nutrition Facts Label and requests to delay its implementation and coordinate it with USDA’s forthcoming mandatory disclosure requirements for bioengineered foods.
  • With much of the industry and President Trump’s nominee to head the FDA aligned on this issue, a delay to the scheduled implementation of the Nutrition Facts label changes seems increasingly possible if not likely.  We will continue to keep a close eye on any developments in this regard and report them to you here.
  • “Organs-on-Chips” technology has been the focus of a public-private collaboration between FDA, the federal Defense Advanced Research Projects Agency (DARPA) and the National Institutes of Health (NIH).  “Organs-on-Chips” essentially involves creating miniature-sized human organ systems on micro-engineered chips about the size of an AA battery.  This technology has revolutionized the manner in which scientists can study the effects of potentially harmful chemical and biological hazards in foods, cosmetics, drugs or dietary supplements. Substantial grants have been awarded to universities nationwide to advance this research, including Harvard University and the Massachusetts Institute of Technology.  A company called Emulate Inc., founded by researchers at the Wyss Institute for Biologically Inspired Engineering at Harvard University, has been at the forefront of this work.
  • On April 11, 2017, FDA announced a collaboration with Emulate Inc. to evaluate the company’s “Organs-on-Chips” technology in laboratories at the FDA’s Center for Food Safety and Applied Nutrition.  FDA reports that the flexible polymer organ-chips contain tiny channels lined with living human cells and are capable of reproducing blood and air flow just as in the human body. The chips are translucent, affording researchers a window into the inner workings of the organ being studied.  For more information on how “Organs-on-Chips” technology works click here.
  • The success of this public-private venture could ultimately lead to a reduction in the animal testing needed to support the safety of various FDA-regulated products, particularly in the area of new drug development.
  • As previously covered on this blog, mandatory country of origin labeling (COOL) rules for beef products have long been the subject of controversy and challenge, culminating in: (1) a World Trade Organization (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.  Last week, the Colorado General Assembly’s House Agriculture, Livestock & Natural Resources Committee sought to make a push for the reinstatement of COOL.
  • On April 5, 2017, however, the state-level COOL measure was defeated, largely along party lines.
  • As states continue their attempts to reinstate COOL at the behest of livestock producers, the Rancher’s Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) (a national non-profit organization representing U.S. cattle and sheep producers) is seeking the reinstatement of COOL at the federal level through President Trump’s North American Free Trade Agreement (NAFTA) renegotiations.  Media reports indicate that COOL is, in fact, slated to be a key element of the Trump administration’s NAFTA renegotiation of a model trade agreement.  Nevertheless, the meat retail industry’s aversion to COOL may sound the death knell for the advancement and implementation of such requirements.
  • As previously covered on this blog, U.S. beef has been denied access to China since 2003.  Last September, China announced that it had lifted its ban on imports of U.S. beef, but attempts since then to negotiate the technical terms of access have faltered and so American beef producers are effectively blocked from selling any U.S. beef to Chinese consumers.
  • Following President Trump’s two-day summit late last week with Chinese President Xi Jinping (April 6 and 7, 2017), Chinese officials report that President Xi Jinping is offering to lift China’s longstanding ban on U.S. beef.
  • Details on how this new agreement will move the issue forward from the September 2016 agreement have not yet been released. But as the Chinese market represents the largest foreign market for U.S. beef exports, we expect the U.S. beef industry to continue pressing for the speedy restoration of U.S. beef access to China.  We will continue to keep a close eye on any developments in this regard and report them to you here.
  • Health Canada announced on April 7, 2017, that it intends to implement a prohibition on the use of partially hydrogenated oils (PHOs) in food by adding PHOs to Part One of the List of Contaminants and Other Adulterating Substances in Foods. The announcement includes a summary of the comments received, along with the Health Canada’s responses, during a pre-consultation on a proposal to prohibit the use of PHOs in foods that was announced in November 2016 in connection with Canada’s Healthy Eating Strategy.  (For more information on the pre-consultation and Healthy Eating Strategy, see our November 16, 2017 blog entry.)
  • Health Canada defines PHOs as “fats and oils that: a) have been hydrogenated, but not to complete or near complete saturation, and b) have an iodine value (IV) greater than 4.” The proposal includes examples of PHOs excluded from the ban, such as ingredients that contain only naturally occurring trans fats, and ingredients or foods containing trans fats that have been introduced inadvertently due to high temperature processing.
  • Health Canada is proposing to add PHOs to the List of Contaminants and Other Adulterating Substances in Foods 12 months after the prohibition is published in a Notice of Modification (NOM) on its website. Comments are due by June 21, 2017.
  • 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.
  • On April 6, 2017, 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, writing that:
    • “For the past several years, I have heard concerns from school children, parents, teachers, administrators, and school foodservice providers in Kansas and across the country regarding the challenges of complying with rigid school food standards.”
    • “[School meal rules] have limited the flexibility of school foodservice providers, led to declining participation in the program, increased food waste in school cafeterias, and caused confusion regarding what foods can be used in fundraisers and extracurricular activities.
    • “The current waiver system does not provide schools and those involved in planning and preparing school meals with the necessary flexibility and certainty. I urge you to act administratively and provide immediate relief from certain egregious aspects of the standards, particularly in regards to the rapidly approaching sodium limits and the dairy and whole grain requirements. After providing immediate relief, I urge you to provide long-term flexibility and certainty for our schools, our school foodservice directors, and other stakeholders.”
  • With a new administration at the helm, it is likely that the regulatory relief being sought from current rigid school meal standards will be granted.  We will continue to keep a close eye on any developments in this regard and report them to you here.
  • Animal welfare – and, in particular, humane slaughter – have become hot-button issues in the food industry in response to consumer demand for ethically-raised foods.  The key federal agency charged with humane slaughter oversight is USDA’s Food Safety and Inspection Service. With respect to livestock, USDA administers the Humane Methods of Livestock Slaughter Act (7 USC, 1901 – 1907) which requires livestock to be slaughtered in a humane manner.  With respect to poultry, there is no specific federal humane handling and slaughter statute tailored to birds, but USDA has published a notice encouraging the poultry industry to adhere to “Good Commercial Practices” (GCP) for bird handling – under the Poultry Products Inspection Act (administered by USDA), live poultry must be handled in a manner that is consistent with good commercial practices, which means they should be treated humanely.
  • On April 6, 2017, the Animal Welfare Institute (AWI) released a new report titled, “Humane Slaughter Update: Federal and State Oversight of the Welfare of Meat Animals at Slaughter” addressing the slaughter of livestock.  The report covers a six-year period, 2010 through 2015.  Noteworthy conclusions of AWI’s report include, but are not limited to, the following:
    • The level of federal and state humane slaughter enforcement continues to rise, particularly with respect to the number of plant suspensions and threatened suspensions, for egregious humane handling and slaughter violations;
    • The number of citations for less serious humane handling and slaughter offenses continues to increase under state enforcement;
    • Although state enforcement is generally up overall, the level of enforcement varies dramatically by state;
    • Repeat federal and state violators present a major enforcement problem; and
    • Humane slaughter enforcement remains low in comparison to other aspects of food safety enforcement.
  • The report recommends that USDA, together with state departments of agriculture, should dedicate more resources to humane handling and slaughter activities and establish a policy of escalating penalties to address repeat violators.
  • It remains to be seen what, if any, impact this new AWI report will have on USDA and/or state enforcement activities in the area of humane handling and slaughter.
  • As previously covered on this blog, in May 2016, FDA issued final rules to implement changes to the nutrition and dietary supplement labeling and serving size regulations. Mandatory compliance with the new nutrition labeling requirements for food products that are initially introduced into interstate commerce is currently slated for July 26, 2018 (or July 26, 2019 for manufacturers with less than $10 million in annual food sales).  As the compliance deadline steadily approaches, some in the industry have sought to delay the rule’s implementation.  For example, as reported on this blog last week, the dairy industry requested a compliance date delay at a House Agriculture Committing hearing on March 22, 2017.
  • The food industry generally appears to agree that a compliance date delay should be put in place.  In a recent letter to Health and Human Services Secretary Thomas Price, the Grocery Manufacturers Association (GMA) and trade groups representing bakers, corn refiners, confectioners, millers, and meat and dairy producers requested a compliance date delay until May 2021, writing that:
    • “The current compliance deadline does not sufficiently account for the time, resources, and complexity involved in label changes of this magnitude.  While a two-year compliance timeline may have been sufficient for the original nutrition facts panel rules issued in the 1990s, the food and beverage world is much more complicated today . . . Additionally, to change essentially every single food package in the U.S. requires testing and analyzing products, entering ingredient information into databases, new label and packaging designs, new printing plates, and queuing up in line with printing companies.   The process requires coordination among software vendors, ingredient suppliers, compliance/quality assurance teams, graphic designers, printing companies and others on a scale of magnitude that has never before been executed . . . This untenable situation is exacerbated by the fact that as of today, with only 16 months left in the implementation period, FDA has yet to issue final guidance on how to define and properly calculate two common food ingredients:  dietary fiber and added sugar . . . Moreover, immediately after the July 26, 2018 compliance date for the NFL [Nutrition Facts Label], USDA is mandated to finish the biotechnology disclosure rule on July 29, 2018. This means that only three days after over 715,000 covered food and beverage products are required to be in compliance with FDA’s NFL rules, industry must again begin the expensive and time-consuming process to redesign labels and related materials and relabel their products to come into compliance with the biotechnology disclosure rule.”
  • Yesterday, Scott Gottlieb, President Trump’s nominee to head the FDA expressed a willingness to consider postponing the deadline for the new Nutrition Facts Panel.
  • With industry pressing for a compliance date delay for the new requirements and the potential new head of the FDA appearing amenable to considering such a delay, it appears increasingly likely that implementation of the rule could very well be postponed, possibly through May 2021.  We will continue to keep a close eye on any developments in this regard and report them to you here.
  • By way of background, on April 5, 2016, FDA released a final rule to implement sanitary food transportation requirements under the FDA Food Safety Modernization Act (FSMA).  Click here for a complete copy of the final rule.  Click here for an FDA fact sheet summarizing the final rule, and click here for our summary of the rule and its implications for entities in the food industry.  In short, the final rule establishes sanitary transportation practices for covered entities addressing: (1) vehicles and transportation equipment; (2) transportation operations; (3) training; (4) records; and (5) waivers. Companies generally must comply with the new requirements by April 2017.  Small businesses have until April 2018 to comply.
  • Today, the FDA announced the publication of three waivers to the final Sanitary Transportation rule. The waivers are for businesses whose transportation operations are subject to separate State-Federal controls. They include:
    • Businesses holding valid permits that are inspected under the National Conference on Interstate Milk Shipments’ Grade “A” Milk Safety Program, only when transporting Grade “A” milk and milk products.
    • Food establishments authorized by the regulatory authority to operate when engaged as receivers, or as shippers and carriers in operations in which food is delivered directly to consumers, or to other locations the establishments or affiliates operate that serve or sell food directly to consumers. (Examples include restaurants, supermarkets and home grocery delivery services.)
    • Businesses transporting molluscan shellfish (such as oysters, clams, mussels or scallops) that are certified and inspected under the requirements established by the Interstate Shellfish Sanitation Conference’s (ISSC) National Shellfish Sanitation Program (NSSP) and that transport the shellfish in vehicles permitted under ISSC authority.
  • These waivers were contemplated and described in both the proposed and final rule. In FDA’s view, these waivers will not result in the transportation of food under conditions that would be unsafe for human or animal health, or contrary to the public interest.
  • We will continue to monitor and report on FDA’s activities in connection with the final Sanitary Transportation rule and other FSMA related activities.  Please feel free to contact us at fooddrug@khlaw.com with any questions.