Food and Beverage News and Trends - April 2014

by DLA Piper

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

  • Food industry opposes trans fat bar, proposes setting limitations. Major food industry players recently urged FDA to consider alternatives to an outright ban on trans fats, including establishing an allowable level of trans fat and adjusting “rounding rules” for listed trans fat amounts. The food industry submitted over 1,600 comments objecting to FDA’s de-designation of partially hydrogenated oils (the major source of non-animal-derived trans fat in food) as GRAS, in part arguing that FDA lacks scientific support for its position.
  • FDA’s Hamburg: GE foods present no safety risks. At the 3/27/2014 House Budget subcommittee hearing on the FY2015 FDA budget, Commissioner Hamburg reaffirmed FDA’s stance on voluntary labeling of GE foods and reiterated FDA’s position that mandatory labeling is only necessary where there is a risk of misbranding or false labeling. She further stated that FDA will soon re-assert that many credible scientific organizations analyzing the issue have found no evidence of safety risks with GE foods and, from a safety perspective, the FDA does not believe GE modification would constitute a material change to the product.
  • California GMO labeling bill passes Health Committee hurdle. In a 5-2 vote, the California Health Committee recently approved SB1381, which would require labeling of genetically modified foods. The approved bill includes amendments to the original proposed bill that would exempt alcohol from GMO labeling requirements and postpone the effective date until January 1, 2016. The Senate Judiciary and Agriculture committees must also approve the bill before it goes to the full chamber.
  • POM class decertified based on damages, ascertainability. On March 25, a previously certified class of POM Wonderful juice purchases were decertified on both damages and ascertainability grounds. The plaintiffs brought suit against POM alleging false advertising of POM Wonderful juice’s claimed health benefits without scientific support. POM sought decertification in light of the Supreme Court’s Comcast ruling. The plaintiffs in POM had proposed two theories of recovery: full refund, and price premium. The full refund theory was found invalid because it failed to account for the value a consumer received, such as hydration, vitamins and minerals. The plaintiffs’ price premium theory also failed as it relied on a fraud-on-the-market theory, which the court questioned and rejected in the context of a false advertising case. Finally, the court found the plaintiffs’ proposed class unascertainable if there is no reliable way to determine who purchased the products and where few class members saved any receipts and likely purchased the product for various reasons. See In re: POM Wonderful LLC Marketing and Sales Practices Litigation, No. ML 10-02199 (C.D. Cal. Mar. 25, 2014).
  • N.D. Cal. stays another ECJ case (Reese v. Odwalla Inc., No. 13-00947). The Northern District of California recently stayed a class action alleging false advertising of the term “evaporated cane juice,” due in part to FDA reopening the comment period for its 2009 draft guidance on ECJ. Judge Yvonne Gonzalez Rogers previously dismissed a similar case challenging ECJ on primary jurisdiction grounds (Hood v. Wholesoy, No. 12-05550 (N.D. Cal.)) and found primary jurisdiction even more applicable now in light of FDA reopening the comment period on the ECJ draft guidance. According to Judge Rogers, FDA’s position on ECJ is “not settled” and “also under active consideration by the FDA.” Several other courts in the Northern District of California have rejected primary jurisdiction arguments for ECJ, creating a divide within the district.
  • FSMA may slow grocery store recalls. The Food Marketing Institute has warned FDA that the steps it proposes in a recently issued advanced notice of proposed rulemaking may actually slow grocery stores’ ability to remove dangerous items from their shelves. In its advanced notice, FDA seeks comments regarding a proposed requirement for food manufacturers, retailers, and “responsible part[ies]” to submit certain information to FDA on contaminated products. Based on this submission, FDA would prepare and publish a 1-page summary that stores would be required to prominently display within 24 hours to remain posted for 14 days. FMI has commented that retailers primarily receive recall notification requests directly from suppliers or manufacturers, before information is provided by FDA or via the reportable food registry. Direct supplier/manufacturer recall requests allow grocery chains to notify customers and remove food from shelves in a matter of hours. Adding a consumer notification requirement to the reportable food registry system could significantly slow the recall process. FDA did note that under its proposal, grocery stores would not be precluded from posting their own recall notices before receiving the 1-page summary for FDA. However, regardless of a store’s actions prior to FDA’s publication, the proposed notification requirements would still apply. FDA is seeking input on its notice until June 9.
  • FDA likely to stand firm on labeling added sugars. Industry label experts question FDA’s proposal to list added sugars on the revised Nutrition Facts Panel before receiving approval to study how consumers would respond to such labeling, and whether labeling added sugars can be done if there is no validated laboratory test for verifying added sugar levels as compared to natural sugars. Critics also warn that FDA lacks the resources necessary to check sugar records to ensure accuracy of labeled sugar levels. However, the general consensus is that FDA is unlikely to back down from the controversial labeling requirement.

Global Roundtable for Sustainable Beef promotes definition of “sustainable beef.” The Global Roundtable for Sustainable Beef, a combined group of players from the beef industry and environmental groups, is attempting to define what constitutes “sustainable beef” in an effort to promote environmentally friendly beef production. The group recently released a draft of proposed principles and criteria that sets out general goals for a sustainable production system, such as minimizing greenhouse gas emissions and damage to ecosystems. Because beef production differs by country, different countries have different sustainability goals. The group indicates that the process for determining “sustainability” in this context could take up to 20 years, though pilot projects are expected to begin in 2016.

Organic Consumers Association urges GMO labeling with Nutrition Facts changes. With the recent proposed changes to the Nutrition Facts Panel, the Organic Consumers Association has issued a statement calling on the First Lady to require GMO labeling as part of the Nutrition Fact changes. According to the Association, GMO labeling is “conspicuously absent” from the proposed changes, despite President Obama’s pledge to require GMO labeling while he was running for president.

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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