Final Comments on USDA’s BE Labeling Rule Debate Disclosure for Highly Refined Foods and Ingredients

  • The comment period on USDA’s proposed requirements to implement the National Bioengineered Food Disclosure Standard (NBFDS) closed on July 3. As previously reported on this blog, when USDA asked for input prior to drafting the regulation, commenters disagreed on whether highly refined ingredients derived from bioengineered (BE) crops should be disclosed. As a result, in the proposed regulation (see 83 Fed. Reg. 19860-19889), USDA’s Agricultural Marketing Service (AMS) offered two options with respect to labeling highly refined foods and ingredients and requested comments on them.
    • Option 1: Highly refined products are not within the scope of “bioengineering” because they do not contain genetic material that has been modified through in vitro recombinant deoxyribonucleic acid (DNA) techniques and, therefore, do not require disclosure as “bioengineered food.”
    • Option 2: The definition of “bioengineering” includes all foods produced from bioengineering, including highly refined products, and, therefore, foods containing highly refined ingredients should be labeled as BE foods.
  • USDA received comments supporting both options. The American Farm Bureau Federation, American Soybean Association, American Sugarbeet Growers Association, National Corn Growers Association, National Cotton Council, US Canola Association,  National Fisheries Institute, and the U.S. Beet Sugar Association were among the groups supporting Option 1. In its comments urging AMS to exclude highly refined ingredients, particularly refined sugar, from the scope of the NBFDS, the U.S. Beet Sugar Association stated, “Creating any presumption, even unintentionally, that beet sugar produced from transgenic sugar beets is different and less desirable than its conventional counterparts or cane sugar is not supported by science, is contrary to the intent of the NBFDS, imposes a costly and discriminatory burden on the industry, and has harmful economic impacts throughout the supply chain.”
  • Groups supporting Option 2 include the Grocery Manufacturers Association (GMA), the American Beverage Association, the American Frozen Foods Institute (AFFI), the American Herbal Products Association, the National Confectioners Association, and SNAC International. In its comments, AFFI reasoned, “Because refined ingredients may contain modified DNA if they are derived from crops on the proposed BE crops list, and because the underlying crop did contain the modified DNA, the resulting foods or ingredients should be subject to disclosure.” AFFI added that “including refined ingredients derived from BE crops would be consistent with consumer expectation.” In a press release about its comments, GMA noted that approximately 90% of U.S. corn, soybean, and beet sugar crops are bioengineered and estimated that excluding refined ingredients from the scope of the mandatory disclosure standard would result in 78% fewer products being disclosed.
  • We will continue to monitor developments on the National Bioengineered Food Disclosure Standard.

FDA Renews Cautions Against Consumption of Kratom Following Conclusion of Salmonella Investigation

  • Kratom is a botanical substance that grows naturally in Southeast Asia. FDA classifies kratom as an opioid, noting that it is addictive and has been linked to severe health consequences and deaths among users. Nevertheless, the popularity of kratom has grown in recent years despite kratom not being legally marketed as a drug or dietary supplement in the United States. In February 2014, the FDA issued an import alert that allows U.S. officials to detain imported dietary supplements and bulk dietary ingredients that are, or contain, kratom without physical examination.
  • As reported on this blog, FDA began cracking down on kratom importers with an administrative detention and seizure in January 2016, and escalated enforcement activity two years later with a voluntary recall and destruction announced February 21, 2018 of several kratom products illegally marketed as dietary supplements and May 22, 2018 warning letters against three kratom products making medicinal drug claims.
  • Salmonella risk became a new focus of concern with kratom for FDA with a mandatory recall order (FDA’s first mandatory recall order ever) announced April 12, 2018 against a kratom product associated with salmonellosis. Throughout the year, FDA announced additional kratom recalls due to salmonella contamination of products from multiple different companies and brands.
  • A Statement From FDA on the Ongoing Risk of Salmonella in Kratom Products (July 2, 2018) outlines the scientific basis for FDA’s conclusion that kratom consumption presents a significant risk of exposure to salmonella. According to FDA, salmonella contamination of kratom has probably been occurring at a significant level for some time and is ongoing. A total of 81 samples of kratom were collected and tested as a direct result of FDA’s investigation of 199 cases of salmonellosis linked to kratom consumption as of May 2018 and 42 (52%) were found to be contaminated with salmonella. FDA further found that kratom is grown and harvested mainly under conditions promoting widespread contamination of foodborne pathogens and that further processing steps to manufacture capsules, powders, and herbal remedies do not appear to eliminate microbial contamination.
  • Since FDA considers kratom to be a dangerous and addictive opioid, it is unlikely that any steps to make kratom products safer with respect to microbial contamination would result in reduced FDA enforcement.

FDA Survey of the Cosmetics Industry on Current Manufacturing Practices

  • The U.S. Food and Drug Administration (FDA) announced yesterday, July 2, 2018, an opportunity for public comment on a proposed survey of the manufacturing practices and standards employed across the cosmetic industry to ensure product quality and safety. The survey is intended to provide the industry with a systematic and detailed study of the current manufacturing practices, a study which, to date, has never been undertaken by FDA.
  • The voluntary survey would collect a variety of data ranging from general company information about the product manufacturer (such as production and volume, approximate revenue, company size), as well as data on the following practices: written procedures and documentation relating to manufacturing, processing, maintenance, and training; buildings and equipment management, including cleanliness, sanitation, pest control practices, and equipment maintenance; materials and manufacturing, including inventory management and standard operating procedures; and quality control/product testing, including scope, quality testing, rejected products or complaint response, and other corrective actions. The comment period will be open until August 31.
  • Some stakeholders and consumer groups have been calling on lawmakers and regulators to reform cosmetics regulations for years, and this initiative could signal that regulatory modifications lie ahead. Five years have passed since FDA issued its draft guidance for Cosmetic Good Manufacturing Practices, which was originally issued on February 12, 1997 and was later revised in April of 2008 and again in June of 2013.

The Daily Intake will return on Thursday, July 5.  We extend our best wishes to those of you celebrating the Independence Day holiday.

California Bans New Soda Taxes until 2030

  • On June 28, 2018, California Governor Jerry Brown signed AB1838, which prohibits local government agencies from imposing new taxes on “groceries,” which are defined to exclude alcoholic beverages, cannabis products, cigarettes, tobacco products, and electronic cigarettes.  The bill is widely seen as a ban on taxes on sugary drinks in particular.
  • The passage of AB1838 is resulting in the withdrawal of Ballot Measure 17-0051, which was supported by the American Beverage Association and which would have required a super majority (rather than a simple majority) to raise local taxes and fees, regardless of the reason for the tax initiative.
  • The threat of Ballot Measure 17-0051 in terms of funding future social programs outweighed the prospective benefits of new taxes on sugary drinks.  Existing local taxes on sugary drinks in Berkeley, San Francisco, Albany, and Oakland are unaffected, as AB1838 affects only initiatives passed after January 1, 2018.

E. Coli Outbreak Linked to Romaine Lettuce over; Investigation into Cause Continues

  • On  June 28, 2018 the Centers for Disease Control (CDC) announced that the outbreak of E. Coli linked to romaine lettuce is over.  This outbreak, which sickened at least 210 people in 36 states, with at least five deaths attributed, is believed to have been caused by romaine lettuce grown and harvested in the Yuma (Arizona) growing region, though the outbreak cannot be explained by a single grower, harvester, processor, or distributor.
  • Until recently, the source of the contamination was unknown, but the environmental assessment conducted by FDA and CDC has identified the presence of E. coli with “the same genetic finger print as the outbreak strain” in irrigation canal water from the region.  FDA is continuing to investigate.
  • This is the most recent example of FDA’s use of whole genome sequencing to better understand the source of outbreaks.  The possible connection to irrigation water is bound to cause public health advocates to push for a more immediate compliance date for Agricultural Water Standards than the proposed 2022-2024 (depending on farm size) dates currently under consideration.

Trump Administration Proposes to Consolidate Food Safety Authority into One Agency

  • In a June 21, 2017 document titled “Delivering Government Solutions in the 21st Century:  Reform Plan and Reorganization Recommendations,” the Trump Administration proposes to replace the U.S. Food and Drug Administration (FDA) and Food Safety and Inspection Service (FSIS) with a single agency called the Federal Food Safety Agency.  If the recommendations were to be adopted, the U.S. Department of Agriculture would house the Federal Food Safety Agency, and FDA would be renamed the Federal Drug Administration, which would focus on drugs, devices, biologics, tobacco, dietary supplements, and cosmetics.
  • Consistent with past reports issued by the Government Accountability Office (GAO) (e.g., its January 2017 Report to Congress “Food Safety:  A National Strategy Is Needed to Address Fragmentation in Federal Oversight”), the Trump Administration plan characterizes the current division of jurisdiction between FDA and FSIS as duplicative and fragmented, citing as examples that FDA has jurisdiction over cheese pizza while FSIS has jurisdiction over pepperoni pizza.
  • Numerous attempts at consolidating food safety authority have failed since 1949.  Given the current political climate, it is not clear that there would be adequate bipartisan support for legislation implementing the proposed reorganization.

FDA Announces Public Meeting to Discuss Nutrition Innovation Strategy

  • In March, FDA Commissioner Dr. Scott Gottlieb announced a comprehensive, multi-year FDA Nutrition Innovation Strategy, which aims to modernize FDA’s approach to nutrition, help reduce the burden of chronic disease that stems from poor nutrition, and remove barriers to industry innovation.
  • On June 27, 2018, FDA published a notice of public meeting and a request for comments to give interested persons an opportunity to discuss FDA’s Nutrition Innovation Strategy. In the press release, Commissioner Gottlieb stated that much of the public meeting will cover three areas: (1) modernizing labeling claims, (2) modernizing ingredient labels, and (3) modernizing standards of identity, and expects the topics addressed at the meeting will include the following:
    • A standard icon or symbol to denote the claim “healthy” on food labels;
    • Creating a more efficient review strategy for evaluating qualified health claims on food labels;
    • Discussing new or enhanced labeling statements or claims that could facilitate innovation to promote healthful eating patterns;
    • Modernizing the standards of identity to provide more flexibility for the development of healthier products, while making sure consumers have accurate information about the products;
    • Providing opportunities to make ingredient information more consumer friendly; and
    • FDA’s educational campaign for consumers about the Updated Nutrition Facts Label.
  • FDA will be opening a docket to take public feedback on these topics. FDA stated their specific interest in hearing about the implementation of current standards of identity, and whether FDA should update the existing standards or change enforcement methods. FDA wants to know “if consumers are being misled in ways that can adversely affect their dietary decisions when certain products qualify themselves with terms such as milk or rice, but are made from ingredients that don’t reflect the traditional assumptions about how products labeled that way are derived.” As previously mentioned on this blog, this issue has most recently focused on the labeling of plant-based products as “milk.”
  • The public meeting will take place on July 26, 2018. Interested parties may submit comments on this public meeting by August 27, 2018. Those with questions regarding the upcoming meeting or who would like assistance in preparing comments are encouraged to email us at fooddrug@khlaw.com.

Trade Dispute with China Worries Agriculture; USDA Vows Support

  •  The U.S. agricultural industry has voiced concerns about potential financial losses due to the ongoing trade dispute with China, notwithstanding U.S. Agriculture Secretary Sonny Perdue’s assurance last April that farmers will be protected.
  • By way of background, on June 15, President Trump announced that the U.S. will impose a 25% tariff on $50 billion in Chinese imports in order to address China’s violation of American intellectual-property rights.  The tariffs are scheduled to become effective July 6.  In response, China announced 25% tariffs on $34 billion worth of U.S. goods, including various agricultural items (e.g., seafood and pork varieties, soybeans, etc.).  A few days later, President Trump declared that he had directed the U.S. Trade Representative to identify $200 billion worth of Chinese goods as candidates for additional tariffs at a rate of 10%.
  • As previously reported on this blog, Secretary Perdue stated that USDA was seeking to shield farmers from the impact of additional tariffs imposed by China.  In a June 25, 2018 editorial in USA Today, Perdue stated that while USDA has tools available “to support farmers faced with losses that might occur due to downturns in commodities markets,” the strategy has not been unveiled because “it is not good practice to open our playbook while the opposing team is watching.” He added, “If China does not soon mend its ways, we will quickly begin fulfilling our promise to support producers, who have become casualties of these disputes.”
  • Since Purdue vowed support for farmers in April, several reports on potential losses to the agricultural industry have been issued.  For example, Iowa State University Economist Chad Hart (Des Moines Register) has estimated that Iowa farmers could lose up to $624 million due to tariffs, depending on their duration and the time needed to find new markets.  Further, the price of soybeans dropped more than $1 per bushel between June 1 and 22 of this year, according to Nick Moody, President of the Virginia Soybean Association (The Virginian-Pilot).
  • The National Pork Producers Council has asserted that hog futures have dropped by $18 per animal since March due to speculation of Chinese retaliation again U.S. pork. That translates to $2.2 billion loss on an annualized basis, according to Iowa States University economist Dermot Hayes.  After China increased the tariff on U.S. wine imports by 15% in April, Robert Koch, President and CEO of the Wine Institute stated in a press release, that “these tariffs put our products at a price disadvantage and we urge swift resolution of this issue before long-term disruptions are felt. U.S. wine exports to China and Hong Kong were up 10% in 2017 to $197 million, and a value of U.S./California wine exports to China alone have increased 450% in the past decade, reports the Wine Institute.
  • China’s food import and export requirements will be among the topics covered at Keller and Heckman’s Inaugural China Food and Food Packaging Conference, to be held in Shanghai, China, on September 11 and 12, 2018. The program will also include an overview of China’s food regulatory system and guidance on dealing with crisis management. More information on the conference, including how to register, can be found here.

Ninth Circuit Court of Appeals Upholds Denial of Injunctive Relief Where Named Plaintiff Concedes She Would Not Purchase Allegedly Mislabeled Tea in the Future

9th Circ. OKs Toss Of Twinings Tea Antioxidant Case – Law360 (subscription to Law360 required)

  • Seeking injunctive relief in consumer class action cases requires the plaintiff to show there is a threat of future harm.  A recent decision emphasizes the difficulty that a plaintiff can face when she concedes she will not purchase the contested product again.
  • Earlier this month, the U.S. Ninth Circuit Court of Appeals upheld the dismissal of injunctive relief in Nancy Lanovaz v. Twinings North Americs, Inc., finding the plaintiff who brought the suit did not allege that she would again purchase the tea marketed with allegedly misleading nutrient content claims.
  • To be actionable, a misstatement must be material.  Materiality will be an issue for a plaintiff who can show the potential for future harm only by acknowledging that she will continue to purchase a product despite a misleading statement.  However, it would appear to be difficult for a plaintiff to establish that a misstatement was material to her decision to purchase the product when she agrees that she would continue to buy the item even after learning that the statement is incorrect.  It remains to be seen whether this decision will influence class action complaints going forward.

Canada Legalizes Recreational Marijuana

  • Last week, we published a blog post regarding a proposed bill in the United States Senate that would provide more autonomy to individual States in regulating marijuana.  On June 20, 2018, Canada passed Bill C-45, which legalizes and strictly regulates cannabis in Canada.
  • The national minimum purchase age will be 18, but provinces and territories will be able to further regulate the purchase and sale of cannabis and some have indicated they will set the minimum purchase age at 19.  The Act will take further action to restrict youth access, establish serious criminal penalties, provide for legal production of cannabis, and enhance public awareness of the health risks.  Additional information on Canada’s law can be found hereherehere, and here.
  • The new Canadian regulation of cannabis adds certainty to the cannabis industry in Canada – banks will be able to process payments and, though regulated, the underlying acts of growing, selling, purchasing, and possessing cannabis will be legal in some form on both the local and federal level.  Such certainty is lacking in the United States – the existing federal ban adds uncertainty for businesses operating in full compliance with state and local laws.
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