• The new guidance reiterates the FTC’s position that unqualified “Made in the USA” claims require “all or virtually all” U.S. content and processing. In determining whether this standard is met, the FTC considers the percentage of a product’s total costs that come from domestic parts and processing, “how far removed any foreign content is from the finished product,” and “the importance of the foreign content to the product’s form or function.”
  • The Labeling Rule, which is specific to unqualified “Made in the USA” claims, never actually discusses “the importance of the foreign content.” However, that concept has long been part of enforcement and closing letters. This new addition to the guidance, thus, should be a welcome reminder to companies, making compliance a little easier.
  • As the new guidance reiterates, qualified claims like “Made in USA of U.S. and imported parts” may also be used as long as a few requirements are met. First, the product’s “last substantial transformation,” as defined by U.S. Customs standards, must have occurred in the U.S. Second, any U.S.-claimed parts or processing must meet the “all or virtually all” standard. Finally, and this is where it gets a little tough, U.S.-claimed parts or processing must be at a level that is either more than “negligible” or, possibly, “significant.” A longstanding example from prior guidance discusses the parts of a treadmill to demonstrate that the U.S. content must be more than “negligible” – with negligible in that instance being “only three percent of the total cost of all the parts.” The new guidance substantially repeats the same example, but with introductory language suggesting the example means that there must be a “significant amount of U.S. content or U.S. processing.” No further information is given on what “significant” might mean.
  • As with many guidance documents that the FTC has released in recent years, companies are well-advised to be aware of where the FTC appears to be increasing pressure, even if new, stricter stances do not always align well with case law or, as in this case, even the FTC’s own prior guidance. Examples of guidance documents with similar new stances include the 2023 updated Endorsement Guides, with new stances on “clear and conspicuous,” and the 2022 Health Products Compliance Guidance. Keller and Heckman will continue to monitor developments on FTC guidance, including “Made in USA” standards.
  • Last month the U.S. District Court for the Western District of Oklahoma dismissed for lack of standing an amended complaint filed by the Plant Based Foods Association (PBFA) and the Tofurky Company challenging the “Oklahoma Meat Consumer Protection Act” (the “Act”). The Court had previously dismissed an earlier iteration of the lawsuit.
  • The Act prohibits any person “advertising, offering for sale or selling meat” from “misrepresenting a product as meat that is not derived from harvested production livestock,” but indicates that plant-based meat products do not violate the Act so long as their packaging bears a disclosure that the product is derived from plants. “Meat” is defined as “any edible portion of livestock or part thereof.”
  • The Court recited the well-known tenants of Article III standing. Namely, a plaintiff must demonstrate (1) injury in fact, (2) causation between the injury and the challenged conduct, and (3) that a favorable decision would be likely to redress the injury.
  • The Court held that Defendants could not demonstrate injury because the Act’s text literally only applied to persons “advertising, offering for sale or selling meat,” the definition of “meat” did not encompass plant-based meat products, and Defendants (including PBFA’s members) could not show that they sold meat. Although the Court recognized that this construction was clearly inconsistent with the Act’s intent to prevent misleading marketing of plant-based meat products, it stated that the task of re-writing the statute was for the legislature.
  • The Court also held that causation could not be established because neither of the Defendants (the OK Governor and the OK Commissioner of Agriculture) had the authority to enforce the Act. The State Board of Agriculture was charged with enforcing the law and the Commissioner was only one member of the Board. Furthermore, the Court held that OK does not have a unitary executive and the governor of OK is not charged with enforcement (unlike many other states). Finally, the redressability element was not met where there was no power to enforce the Act. 
  • Health Canada is proposing to permit the sale of foods derived from somatic cell nuclear transfer (SCNT) cloned cattle and swine and their offspring without pre-market notification (other species such as goats, sheep, etc., will continue to be subject to mandatory pre-market safety assessment). Currently, SCNT animal clones and their offspring are considered novel foods and are subject to pre-manufacture and import assessment requirements under the New Substances Notification Regulations (Organisms).
  • SCNT is a reproductive animal cloning technique that involves replacing the nucleus of an unfertilized egg cell with the nucleus of a somatic cell from another animal to form an embryo. The embryo is transferred to a surrogate to develop until birth, and the animal will have the same genetic makeup as the genetic donor animal. The technique is used to create copies of animals with desirable traits, such as disease resistance and meat or milk quality.
  • Health Canada created an interim policy on SCNT clones in 2003 when the technology was still in the research and development stage. Since then, Health Canada has worked with other agencies to evaluate the scientific evidence regarding the safety of SCNT cattle and swine clones, resulting in the development of the Scientific Opinion on the Impact of Somatic Cell Nuclear Transfer (SCNT) Cloning of Cattle and Swine on Food and Feed Safety, Animal Health and the Environment (2023). The scientific opinion concluded that food from SCNT clones and their offspring is as safe as food from traditionally bred animals. Therefore, Health Canada determined these foods should be regulated in the same manner as those from traditionally bred animals.
  • Recently, Health Canada accepted comments on the revised policy proposal, and the Agency will consider all science-based comments received before publishing a final report, which is expected in Fall of 2024.
  • Keller and Heckman will continue to monitor this proposal and other developments related to food from cloned animals.
  • Last month Chobani petitioned FDA to amend the standard of identity (SOI) for yogurt (21 CFR 131.200) to include ultrafiltered nonfat milk as a basic dairy ingredient. Currently, ultrafiltered milk is only permitted for more limited use as an optional dairy ingredient pursuant to the paragraph (c) provision allowing for other “safe and suitable milk-derived ingredients.”
  • Although the yogurt SOI has been modified in a number of ways over the past few years, FDA previously rejected Chobani’s request regarding the addition of ultrafiltered milk as a basic dairy ingredient, citing an absence of supporting data. However, the agency indicated a willingness to consider the request in future and granted Chobani a temporary marketing permit (TMP) to collect additional data. Chobani’s new petition is supported by data and information obtained during its TMP period. 
  • Chobani’s petition aims to address the previously identified data gaps and argues that the use of ultrafiltered nonfat milk as a basic ingredient:
    • Does not alter the basic nature and essential characteristics of yogurt.Modernizes the SOI and allows manufacturers additional flexibility and efficiency.Benefits consumers by providing them with a high protein, low-sugar and lactose-free option.
    • Is consistent with international standards and FDA policy with other dairy products (e.g., standardized cheeses) and would advance FDA’s nutrition policy which seeks to reduce the population’s sugar intake.  
  • We will continue to monitor and report on this petition and other efforts to modernize SOIs.
  • FDA will publish a rule revoking the existing food additive authorization for brominated vegetable oil (BVO) on July 3, 2024. BVO is a mixture of vegetable oils (generally corn, cottonseed, olive, and soybean) that has been modified with bromine. It has been used as a flavoring oil stabilizer and emulsifier since the 1920s and is primarily used in citrus-flavored soft drinks. We previously blogged about the proposed rule, which was published November 2, 2023.
  • In 1970, FDA removed BVO from the codified list of generally recognized as safe (GRAS) substances and established an interim food additive regulation, later codified at 21 CFR 180.30. The initial authorization was for a 3-year basis and then expanded indefinitely to allow completion of subsequent safety studies. In 2014, FDA determined the existing data on BVO did not provide evidence of a health threat but that there were deficiencies in the existing studies and many studies did not clearly establish safe levels of chronic use. In 2022, the National Center for Toxicological Research published new rodent safety studies that confirmed dietary exposure to BVO results in bioaccumulation of bromine and toxic effects on the thyroid, a gland that produces hormones that play a key role in regulating blood pressure, body temperature, heart rate, metabolism, and the reaction of the body to other hormones.
  • FDA received more than 40 comments to the proposed rule, all of which supported revoking the authorization for BVO, with some urging the Agency to take action against other potentially harmful substances. The rule will become effective 30 days after it is published in the Federal Register. To allow sufficient time for companies to reformulate, relabel, and deplete the inventory of BVO-containing products, the compliance date will be 1 year after the effective date.  
  • This rule follows California’s AB 418, which was passed in October 2023 to prohibit BVO and other chemicals in food. However, the BVO revocation has been on FDA’s regulatory agenda since the spring of 2023.
  • Keller and Heckman will continue to monitor and provide updates on FDA’s review of food additives.
  • Yesterday FDA announced that it had issued a warning letter to Bimbo Bakeries USA, Inc. for, among other things, including allergen labeling elements in certain product labels (e.g. “contains sesame”), even where they did not contain the allergen(s) in question.
  • Some of the products included sesame in the ingredient lists and “contains sesame” allergen statements, even though sesame was not an added ingredient. Similarly, other products were labeled with walnuts, almonds, and hazelnuts in the same manner, even where these ingredients were not added ingredients.
  • Sesame cross-contact controls have been a particular challenge for industry as the seeds are difficult to completely remove from processing equipment. Some members of industry think that the risk of cross-contact is so high that the voluntary “may contain [allergen]” statement does not adequately apprise consumers of the allergen risk and have in some cases intentionally added sesame to allow for allergen labeling elements (ingredient list disclosure and/or a “contains” statement).  
  • Last year, in a response to a petition from the Center for Science in the Public Interest (CSPI), FDA indicated that including mandatory allergen labeling where the allergen (e.g., sesame) was not intentionally added was unlawful. However, the agency indicated the practice of intentionally adding an allergen to a food that would not otherwise contain the allergen, while discouraged, was not an unlawful provided that mandatory allergen labeling was in place. FDA prefers that industry implement appropriate GMPs and preventive controls.
  • If industry continues to feel that GMPs and preventive controls are insufficient to deal with certain (e.g., sesame) cross-contact situations, the effect of this warning letter (and similar enforcement activity) could be the intentional addition of more allergens to foods to allow for mandatory allergen labeling, a legal but discouraged practice which could further limit options for individuals with food allergies.
  • FDA has taken additional action related to the investigation into lead and chromium in apple cinnamon fruit puree pouches prompted by elevated blood lead levels in children in the fall of 2023. The Agency is prioritizing prevention, compliance, and surveillance activities by highlighting retailers’ responsibilities in recall situations and continuing oversight of foreign firms.
  • FDA issued a warning letter to Dollar Tree, Inc., because the company failed to adequately remove recalled products from its store shelves. Although the company was notified of the recall in writing on October 29, 2023, effectiveness checks showed that the recalled products remained on shelves at some stores through December 19, 2023. Further, as of the date FDA issued the warning letter, Dollar Tree had not provided the Agency with any information demonstrating sustainable corrective actions to prevent the future sale of adulterated food products.
  • FDA has also increased targeted screening of imported foods. Negasmart, the distributor of the cinnamon used in the contaminated applesauce pouches, has been placed on Import Alert 99-47 for products that appear to be adulterated for economic gain and Import Alert 99-42 for products contaminated with heavy metals. FDA has also placed Austrofood S.A.S., the manufacturer of the applesauce products, on Import Alert 99-42. The import alerts will help ensure these products are flagged for FDA review upon any attempt to import them into the U.S.
  • Keller and Heckman will continue to monitor and provide updates on the investigation into contaminated applesauce pouches.
  • Today, the U.S. Department of Agriculture (USDA) Agricultural Marketing Service (AMS) announced it has proposed revisions to regulations that govern the inspection and certification of fresh fruits, vegetables, and other products.  Proposed changes include a per-pound fee structure for certain Section 8e import inspections, a minimum fee equivalent to a 2-hour charge, whichever is greater, and a 50% reduction to the sublot fee.
  • Section 8e of the Agricultural Marketing Agreement Act of 1937 (AMAA) applies to specific fruit, vegetable, and specialty crop imports into the United States.  The law requires imported products to meet the same or comparable grade, size, quality and maturity standards as domestic products covered by Federal marketing orders.
  • The current measurement used is a carlot, which is defined as “any number of containers which contain a product of the same kind located on or unloaded from the same conveyance and available for inspection at the same time and location” (7 CFR 51.2).  Modern shipping methods can vary in size and therefore will vary in weight.  A per-pound fee schedule is intended to ensure AMS Specialty Crops Program (SCP) Specialty Crop Inspection (SPI) recovers costs for the actual time and resources needed to inspect the product and to allow shippers to more accurately assess the costs of inspections.
  • Under the proposed rule, customers with loads currently subject to additional sublot fees would see a 50% decrease in sublot fee costs.  A sublot is generated when “the product differs markedly as to quality and/or condition, and such differences are definitely associated with certain brands, varieties, sizes or container markings.”
  • The proposed rule was published to the Federal Register on June 20, 2024, and written comments must be submitted by August 19, 2024.
  • Keller and Heckman will continue to monitor and relay any developments in the rulemaking process.
  • On June 17, 2024, FDA published a proposed exemption for certain cottage cheese products from the Requirements for Additional Traceability Records for Certain Foods rule (the Food Traceability Rule). FDA initially announced its intention to consider an exemption for cottage cheese regulated under the Grade “A” Pasteurized Milk Ordinance (PMO) in the preamble to the final Food Traceability Rule in November 2022.
  • As we have previously blogged, the Food Traceability Rule is one of nine major finalized rules intended to implement the Food Safety Modernization Act and thereby reduce the prevalence of foodborne illness. The Rule is intended to allow for faster identification and removal of potentially contaminated food from the market. The Food Traceability List (FTL) designates the foods subject to the rule, and manufacturers must maintain additional records about critical tracking events in their supply chain related to foods on the list.
  • 21 CFR 1.1360-1400 describe the circumstances and process by which FDA may exempt a food from the Food Traceability Rule requirements. In general, FDA will modify requirements applicable to a food or type of entity, or exempt a food or type of entity, when the Agency determines that application of the Rule’s requirements that would otherwise apply to the food or type of entity is not necessary to protect the public health. FDA may consider a modification or exemption on its own initiative or in response to a citizen petition. FDA uses a risk-ranking model inform the FTL by evaluating known or reasonably foreseeable hazards related to commodities.
  • Cottage cheese is included on the FTL in the commodity “Cheese (made from pasteurized milk), fresh soft or soft unripened” based on the risk for Listeria monocytogenes and other pathogen contamination after pasteurization steps. However, because the PMO has specific processing requirements for Grade “A” cottage cheese that address these risk factors, and because Grade “A” cottage cheese undergoes enhanced regulatory oversight during manufacturing, FDA has tentatively concluded that application of the Food Traceability Rule requirements to Grade “A” cottage cheese is not necessary to protect public health.
  • FDA is accepting comments on the proposed exemption until September 16, 2024. Keller and Heckman will continue to monitor and provide updates on the proposal and the Food Traceability Rule generally.