Food and Beverage News and Trends - August 2016 #2

by DLA Piper
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This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal and regulatory landscape.

  • GMO labeling bill enacted into federal law. On July 29, President Barack Obama signed into law a measure that for the first time ever, requires nationwide labeling of GMOs on food packaging. The bill, which resulted from a congressional compromise, requires most food packages to carry either a text label, a symbol, or a QR code that can be read by smartphones that indicates whether the product contains GMOs. From the time of signing, the USDA has two years to write specific rules for the implementation of the bill’s requirements. The bill preempts a Vermont state law on GMO labeling that took effect on July 1. Some consumer groups and advocates contend, however, that the bill does not go far enough to inform consumers of the supposed risks of GMO products. Vermont Attorney General William Sorrell, while supporting the bill in principle, said August 2, "It is unfortunate that corporate interests were ultimately able to water down Vermont’s clear disclosure standard through the passage of this federal law." See some of our earlier coverage of this story.
  • McDonald’s continues process of updating menus with more healthful foods. McDonald’s announced on August 1 several major changes in the ingredients of its products – changes that affect nearly half its products and that aim to increase the quality and healthfulness of McDonald’s offerings. The fast-food chain will remove artificial preservatives from many of its products, including Chicken McNuggets; will begin to serve new buns that do not contain high-fructose corn syrup; and will, nearly a year ahead of its prior schedule, begin to serve chicken not treated with antibiotics. These are the latest in a series of steps that McDonald’s has taken to update its menus in response to consumer demand. The president of McDonald’s USA said, "More than ever, people care about their food – where it comes from, what goes into it and how it’s prepared. We’re making changes to ensure the food we’re proud of is food our customers love and feel good eating, and we remain committed to our continuing food journey at McDonald’s."
  • IKEA expands chocolate recall due to possible allergens. On July 28, IKEA expanded a recall of some of its chocolate products because of a concern over the presence of nuts and other allergens. The recall, originally announced in June, affects products sold in more than 40 countries, including the US. The six dark chocolate products recalled in July may contain traces of almond, hazelnut, and milk, all of which can be dangerous for people who have allergies to these foods. The affected chocolate products were produced in Spain and Belgium. IKEA said no allergic reactions have yet been reported stemming from any of the recalled products.
  • Beverage industry outspends its opponents but Philadelphia law still passes. Philly.com reported on August 3 that the beverage industry spent more than $10.6 million trying unsuccessfully to fend off a tax on sugary soft drinks proposed by Philadelphia’s mayor and passed by the City Council. That was more than four times the total amount spent by the groups supporting the tax. The list of supporters of the tax, according to public records, includes two Philadelphia law firms, the regional carpenters union, and the mayor’s own political committee. In all, those supporting the tax spent about $2.5 million. The tax will take effect January 1, 2017, and will apply to soft drinks with either sugar or artificial sweeteners. It is expected to raise about $91 million annually, which will support improving the city’s pre-K education and parks.
  • Class action filed over listeria contamination in frozen vegetables. A federal class action was filed on July 7 against a grocery chain and two frozen vegetable manufacturers over allegations that a man’s family was sickened by listeria. The complaint was filed in the US District Court for the Central District of California against the Kroger Co., the Pictsweet Co. and CRF Frozen Foods LLC, alleging violation of the warranty of merchantability and negligence. The complaint alleges the plaintiff purchased frozen peas at a Kroger store that were adulterated with listeria monocytogenes and that his family members subsequently fell ill. The complaint seeks up to $30 million in damages.
  • Blue Bell and Texas health department reach agreement. In the aftermath of a deadly multistate listeria outbreak, Blue Bell Creameries has arrived at a voluntary agreement with the Texas State Department of Health Services. The unusual agreement requires Blue Bell to pay a fine of $175,000, due 30 days from July 22, the date the agreement was signed by the state; notably, an additional $675,00 is being held "in abeyance" for 18 months. If Blue Bell does not meet an array of food safety requirements within that period, it will have to pay the full amount; if Blue Bell complies, Texas will not make Blue Bell pay that part of the fine. In the agreement, Blue Bell did not admit any wrongdoing. Texas reserved the right to pursue action against the company in future. Some observers are predicting that the states of Oklahoma and Alabama, which also were hit by the outbreak, will take similar steps. In addition, potential criminal charges at both the state and federal levels are still possible. See some of our earlier coverage of this story here.
  • Cheeses recalled. North Carolina-based Chapel Hill Creamery has announced a voluntary recall of all of its cheese products due to the possibility of salmonella infection. Chapel Hill products are distributed through retail stores, farmer’s markets and restaurants in North Carolina, Tennessee, South Carolina, Virginia and Georgia. The company, a small dairy farmstead in central North Carolina, produces award-winning fresh and aged cheeses. In a statement released by the USDA, co-founder Portia McKnight said, "Although there is not yet a definitive link between the CHC cheese and the illnesses, there is enough evidence to implicate the cheese and we are asking customers to not consume these cheeses or use them in food service."
  • Lawsuit accuses Barilla of "slack filling." Four New York consumers are suing the Barilla Pasta company, alleging the company’s packaging is deceptive and misleading, reports the New York Post. Barilla’s familiar packaging is the same size across its product line, but the boxes of its higher-end pastas, such as its extra-protein and gluten-free products, contain less pasta – in the case of the gluten-free pastas, 25 percent less. The lawsuit states that while the "new reduced net weight" of the pasta is indeed shown on the box, customers are otherwise uninformed that the quantity has been reduced "or that the boxes are substantially under-filled" – a practice commonly nicknamed "slack filling." The plaintiffs are seeking class-action status as well as compensatory and punitive damages and legal fees. About 25 percent of the pasta sold in the US is made by Barilla.
  • "Pink slime" defamation lawsuit slated for June 2017. The jury trial in the defamation case BPI v. ABC over the network’s consumer reports on BPI’s ground beef product is tentatively scheduled to begin in June 2017. The trial will take place in the county courthouse in tiny Elk Point, South Dakota, which, Food Safety News reports, is already taking steps to accommodate the high-profile case, including building a roomier new courtroom. BPI’s chief product is called "Lean Fine Textured Beef" and is not approved for direct consumer sale. It was, and is, sold to school systems, packaged food manufacturers, the military and restaurant chains. ABC’s 2012 coverage shone a spotlight on the product; in those reports, it popularized a term actually coined by a USDA inspector: "pink slime." BPI is claiming losses of $400 million as a result of the ABC coverage, alleging it had to close three of its four plants and lay off 700 workers. Under the South Dakota agricultural disparagement law, if BPI wins, it could be awarded triple damages, putting ABC on the hook for as much as $1.2 billion.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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