Category: Food & Hospitality

Grocery Manufacturers of America (GMA) and Vermont Agree to Drop GMO Lawsuit

GMO LawsuitThe food industry, led by the Grocery Manufacturers of America (GMA), and Vermont have agreed to dismiss a federal lawsuit that challenged a state law requiring the labeling of certain foods made with genetically modified organisms.

Vermont’s labeling requirements for genetically modified (GM) foods have been preempted by the recent enactment of federal GM labeling legislation which establishes a “National Bioengineered Food Disclosure Standard” and calls for the U.S. Department of Agriculture (USDA) to “establish a national mandatory bioengineered food disclosure standard”.  On August 11, 2016, Vermont’s Attorney General (AG) issued a formal memo stating that the AG’s office will no longer enforce the state’s requirements.  Still pending on appeal to the 2nd U.S. Circuit Court of Appeals in New York, however, was a federal court case filed by food industry groups against the state of Vermont challenging the state GMO labeling law.

Earlier this week, the parties to the lawsuit agreed the suit was no longer warranted because a new federal law preempted the Vermont law that took effect July 1, 2016.

The dismissal of the legal challenge to Vermont’s GMO labeling law represents the formal conclusion of a particularly controversial chapter in the GM labeling debate that involved sparring over the potential development of a patchwork of conflicting labeling requirements across the 50 states.  With the conclusion of the Vermont GMO labeling law saga, industry can now work with USDA to develop uniform federal regulation for labeling GMO foods.

ARTICLE BY Food and Drug Law at Keller and Heckman of Keller and Heckman LLP
© 2016 Keller and Heckman LLP

Congress Passes GE Labeling Standard

GE Labeling Standard Genetically Engineered DNAOn July 14, 2016, the U.S. House of Representatives passed a genetically engineered (GE) labeling standard with bipartisan support. The bill is identical to S. 764, which passed the Senate last week, and represents a compromise brokered by Sens. Debbie Stabenow and Pat Roberts. The White House has indicated that President Obama will sign the legislation into law.

Significantly, the legislation sets a national standard that preempts current and future attempts by states to require labeling of foods containing genetically modified ingredients, including Vermont’s mandatory labeling standard that went into effect July 1.

The legislation establishes a mandatory disclosure standard that applies to all food products intended for human consumption containing bioengineered ingredients. Food companies may satisfy the disclosure requirement through text, a symbol, or by use of certain embedded electronic or digital links, such as a QR Code.

Animal-based products such as beef, pork, poultry, eggs and milk are prohibited from being considered bioengineered foods solely because the animal consumed feeds containing GE ingredients. The legislation does not require animal feed to comply with the disclosure requirement.

Under the legislation, the Secretary of Agriculture is required to promulgate rules that implement the national standard within two years. The legislation requires the Secretary to provide additional flexibility for small food manufacturers in the regulations, including additional disclosure options and more time to comply with the standard. Some very small food manufacturers will be exempt under the regulations.

White House press officials indicated that the administration was pleased with the Roberts–Stabenow compromise effort. “While there is broad consensus that foods from genetically engineered crops are safe, we appreciate the bipartisan effort to address consumers’ interest in knowing more about their food, including whether it includes ingredients from genetically engineered crops,” spokeswoman Katie Hill told reporters in an e-mail.

The federal standard comes just days after Vermont’s standard, passed in 2014, went into effect and follows failed attempts to mandate labeling in states such as Colorado, Oregon, and California. Food manufacturers expressed concern that a patchwork of state laws would make compliance difficult and potentially reduce consumer choice if manufacturers elected to pull products off store shelves rather than implement costly labeling requirements. After being signed into law, the focus will quickly turn to the U.S. Department of Agriculture’s implementation of the legislation and how the agency will define key terms that directly impact applicability (for example, the definition of “small” and “very small” food manufacturers).

ARTICLE BY Seth A. Mailhot & Leah Hurtgen Ziemba of Michael Best & Friedrich LLP

© MICHAEL BEST & FRIEDRICH LLP

“KIND” of Nutritious—FDA Permits “Healthy” Label and Agrees to Rethink Its Definition of “Healthy” Foods

kind bar healthyThe Food and Drug Administration has kindly permitted Kind LLC to use the term “healthy” on its snack bars again, but with the caveat that the term must only be used in text clearly presented as part of Kind’s corporate philosophy, and not as a claim about the products’ nutrient content.

In March 2015, the FDA issued a warning letter to Kind, concerning four of Kind’s snack bars which the FDA said were misbranded as “healthy.” According to the FDA, the Kind snack bars at issue, which contain fruits and nuts among other things, contain more fat and saturated fat than the FDA’s definition of “healthy” allows.  Moreover, the FDA said, the product labels claimed the bars were rich in antioxidants, had no trans fats, and were good sources of fiber without including certain necessary disclosures. The FDA says that after receiving this warning, Kind took corrective actions, including removing and amending certain nutritional content claims on its packaging and labeling. Kind then returned to the FDA to confirm that it was not barred from using the phrase “healthy and tasty” in text “clearly presented as its corporate philosophy, where it isn’t represented as a nutrient content claim, and does not appear on the same display panel as nutrient content claims or nutrition information.”  The FDA agreed not only to this proposal, but also to reconsider how the agency defines “healthy” more generally in response to a citizen petition initiated by Kind in December 2015.

Kind’s citizen petition points out that the FDA’s definition of “healthy” is over 20 years old and excludes foods such as nuts, avocados, olives, and salmon, while embracing fat-free chocolate pudding and some sugary cereals. According to Kind, these outdated food labeling regulations focus on specific nutrient levels of proteins and fats rather than on the nutritional value of the whole foods. Kind therefore asked the FDA to update its existing food labeling requirements to be consistent with the 2010 Dietary Guidelines for Americans and the Scientific Report of the 2015 Dietary Guidelines Advisory Committee, and to amend the definition of “healthy” to emphasize the importance of overall nutrition quality of foods in their whole form rather than specific nutrient levels.  The FDA evidently did not think Kind’s arguments were entirely nutty and, in response, has indicated that it will soon be reexamining how it defines “healthy” food in light of evolving nutrition research, and will be seeking public comment on this issue.

For now, companies may be able to market their food products as part of a “healthy” corporate philosophy in the same manner that the FDA has sanctioned for Kind. But watch this space for more developments as the FDA rethinks what it means to eat healthy.

ARTICLE BY Jennifer Yang & Evelyn Pang of Proskauer Rose LLP

© 2016 Proskauer Rose LLP.

Food Packaging: FSANZ Reports on Nanotechnology in Food Packaging Find No Health Risks

food packagingA review of scientific literature on exposure to nanoscale silicon dioxide, titanium dioxide, and silver in food, including from sources of food packaging, did not find any significant health risks, according to the results of a study which was recently commissioned by Food Standards Australia New Zealand (FSANZ).  The results of the study were published in two reports: Nanotechnologies in Food Packaging: an Exploratory Appraisal of Safety and Regulation and Potential Health Risks Associated with Nanotechnologies in Existing Food Additives.

The report on nanotechnologies in food packaging noted that current applications of nanomaterials in food packaging include:

  • Enhancement of barrier properties through the incorporation of nano-fillers (e.g., nano-clay)

  • “Active” food packaging, with controlled release of active substances such as antimicrobials to improve the shelf-life of food (e.g., nanosilver)

  • Improvement of physical characteristics to make the packaging more tensile, durable, or thermally stable (e.g., nano-titanium dioxide, titanium nitride)

The food packaging report states that no evidence was found in the literature review to indicate that nano-clay is likely to cause adverse effects on health when used in food packaging.  Further, the majority of migration studies on nanosilver have shown levels of migration of ionic silver into foods and food simulants below thresholds set by well-established scientific and regulatory bodies, such as the European Food Safety Authority’s (EFSA) specific migration limit (SML) of 0.05 mg Ag/kg food. Overall, the data reviewed for most of the studied nanomaterials in food packaging indicate that migration of intact nanoparticles from food packaging into food simulants is negligible, implying consumer exposure to these materials is likely to be low. The authors conclude that this suggests “there is low potential for safety issues related to the ‘nano-ness’ of the materials incorporated into food packaging.”

The report points out that the majority of the existing patents for nanomaterials originate in the United States.  No patents for nanomaterials in food packaging were identified in Australia and New Zealand, implying that domestically-sourced nanomaterials may not presently be used in food packaging applications in Australia or New Zealand; however, the report suggests that food and packaging materials incorporating imported nanomaterials may be used in Australia and New Zealand.

While neither report identified any health concerns from any of the nanotechnologies described, FSANZ did note that nanotechnology is a rapidly evolving field, and that the conclusions set forth in the reports may need to be revisited as the sophistication and application of nanotechnologies to food and food packaging continues to advance.

ARTICLE BY Packaging Law at Keller and Heckman

© 2016 Keller and Heckman LLP

Biomass Research And Development Initiative Provides Seven Projects With Up To $10 Million In Funding

On May 9, 2016, the U.S. Department of Energy (DOE), the U.S. Department of Agriculture (USDA), and the National Institute of Food and Agriculture (NIFA) announced the recipients of up to $10 million in funding through the Biomass Research and Development Initiative (BRDI). BRDI is a joint program through DOE and USDA that helps develop sustainable sources of biomass and increase the availability of biobased fuels and products. DOE selected two of the grant winners to receive between $1 million and $2 million: the Ohio State University (OSU) project is “Biomass Gasification for Chemicals Production Using Chemical Looping Techniques,” and the Massachusetts Institute of Technology (MIT) project is “Improving Tolerance of Yeast to Lignocellulose-derived Feedstocks and Products.”

USDA then selected five grant winners to receive a total of $7.3 million in funding:

  • University of California-Riverside, to convert poplar to ethanol and polyurethane via pretreatment and lignin polymer synthesis;

  • University of Montana, to quantify ecological and economic opportunities of various forest types and to quantify benefits of replacing fossil fuel with forest-based bioenergy;

  • North Carolina Biotechnology Center, to optimize production of educational resources on biomass sorghum production in the Mid-Atlantic region;

  • Dartmouth College, to overcome the lignocellulosic recalcitrance barrier; and

  • State University of New York College of Environmental Science and Forestry, to provide life cycle understanding for the production of willow and forest biomass to mitigate investment risk.

Article By Kathleen M. Roberts of Bergeson & Campbell, P.C.

©2016 Bergeson & Campbell, P.C.

FDA Issues Menu Labeling Final Guidance

Tomato labelThe enforcement date will likely begin in May 2017.

The US Food and Drug Administration (FDA) issued its final guidance on April 29 on Menu Labeling (Final Guidance).[1],[2] Importantly, the FDA intends to begin enforcing the Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments Final Rule (Menu Labeling Final Rule)[3] one year from the date that the Final Guidance’s Notice of Availability (NOA) is published in the Federal Register. The NOA for the Final Guidance is expected to be published in early May 2016. Thus, enforcement of the Menu Labeling Final Rule will likely begin in May 2017.

The 58-page Final Guidance is largely a reprint of the previous draft guidance of the same name. The Final Guidance contains many nonsubstantive changes from the draft guidance and provides additional examples (as well as several new, revised, and/or reformatted questions and answers on topics such as covered establishments, alcoholic beverages, catered events, mobile vendors, grab-and-go items, and record-keeping requirements).
The more notable changes in the Final Guidance include the following:

  • The inclusion of examples for temporary menu items (e.g., jack o’lantern cookies or holiday gift tins of popcorn).

  • Exemptions for private off-site catering events from menu labeling, even where the catered items are standard menu items.

  • Mobile vendors who walk through entertainment venues (such as baseball parks) and sell food and beverages are not considered covered establishments, and thus are not required to comply with the Menu Labeling Final Rule.

  • Additional information provided to explain a menu board, where a “menu board” can include multiple forms of written material. The crucial factor of what constitutes a menu board is whether the written material is or is a part of the primary writing from which a customer makes an order selection.

  • Standalone coupons that can be used to place an order (i.e., the coupon contains the name of the standard menu item, the price, and the phone number/website) must provide calorie declaration. However, if a coupon does not include a web address or phone number for placing orders, then it is not considered a menu, and a calorie declaration is not required.

  • An additional description for the inclusion of sauce(s) nutrition information served in multiserving standard menu items.

  • Confirmation that the calorie declaration requirements for electronic menus and menus on the Internet are the same as the requirements for printed menus.

  • Clarification that standard menu items in different sizes are not considered variable menu items unless they come in different flavors, varieties, or combinations and are listed as a single menu item.

  • Additional examples of declarations of calories in combination meal products when a meal comes in multiple sizes with multiple choices of sides.

  • Clarification that, if a covered establishment has multiple digital menu boards with rotating displays, then the disclosure statements should appear on each rotating display of each digital menu board to help ensure that the statements are clear and conspicuous to the consumer and posted prominently.

  • Calorie declarations directly on the package of grab-and-go items should declare the calories for the entire package as they are usually prepared and offered for sale (rather than based on reference amounts customarily consumed (RACCs)).

  • Any substantiation records for nutrient values should be maintained either at the covered establishment or the corporate headquarters for the duration of the time that the standard menu items are offered for sale at the covered establishment. FDA also recognizes that it is not necessary to maintain information on nutrient values for foods that are no longer standard menu items and are no longer offered for sale at a covered establishment, because this information is no longer beneficial for consumers if they cannot purchase those items.

  • Further explanation of when FDA-required statements from responsible individuals employed at covered establishments for nutrient determinations are required, along with sample statement language.

  • Additional guidelines for alcohol—

    • For caloric declaration of multiple beers that have the same calorie amounts, a single calorie declaration can be used, provided that the declaration specifies that the calorie amount listed represents the calorie amounts for each individual beer variety.

    • Clarification that, to the extent that beers on tap are not self-serve, they are exempt from the requirements for calorie declarations of standard menu items.

    • Further explanation regarding the acceptability of covered establishments’ reliance on calorie information and nutrition information on alcohol beverage labels consistent with Alcohol and Tobacco Tax and Trade determinations.

    • Discussion about the inclusion of calorie information for “suggested” alcohol pairings.

    • The applicability of the Menu Labeling Final Rule to covered establishments that sell only one type of standard menu item (e.g., beer).

As previously stated, the Menu Labeling Final Rule and Final Guidance provide that the categories of covered establishments include not only restaurants and similar retail food establishments, but also movie theaters, amusement parks, bowling alleys, sports arenas, other entertainment venues, food service vendors, food takeout and delivery establishments, quick service restaurants, table service restaurants, convenience stores, coffee shops, bakeries, delis, grocery stores, supercenters, and fitness clubs.
However, the Common Sense Nutrition Disclosure Act of 2015, which passed in the US House of Representatives and is pending in the US Senate, would

  • direct the secretary of the US Department of Health and Human Services to issue new rules that allow a food establishment to post nutritional information exclusively on its website if the majority of its orders are placed online,

  • clarify that advertisements are not necessarily considered menus, and

  • aim to protect establishments from being sued for human error.[4]

We will continue to monitor congressional and FDA menu labeling activities.

Article By Robert G. Hibbert, Kathleen M. Sanzo, Christine Forgues Schlenker & Hilary L. Lewis of Morgan, Lewis & Bockius LLP
Copyright © 2016 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

[1] FDA CFSAN Constituent Update, FDA Issues Final Guidance on Menu Labeling (Apr. 29, 2016), available here.

[2] A Labeling Guide for Restaurants and Retail Establishments Selling Away From-Home Foods – Part II (Menu Labeling Requirements in Accordance with 21 C.F.R. 101.11): Guidance for Industry (Apr. 2016), available here.

[3] Food Labeling; Nutrition Labeling of Standard Menu Items in Restaurants and Similar Retail Food Establishments; Calorie Labeling of Articles of Food in Vending Machines; Final Rule. 79 Fed. Reg. 71156 (Dec. 1, 2014), available here.

[4] See Text of the Common Sense Nutrition Disclosure Act of 2015, H.R. 2017 (Referred to Senate Committee Feb. 22, 2016), available here.

Hotels and Hospitality in Cuba: OFAC and Obama Paving the Way

cuba_800_11429With more flights, relaxing regulations, a historic presidential trip to Cuba, and news of hospitality services expanding into Cuba, the pathway into Cuba for hotels and hospitality companies seems smooth.  But businesses should look out for the potential hurdles and compliance risks.  Don’t fret – we can help you welcome your guests.

Reserve Your Room: Regulatory Background. Since President Obama announced the intent to improve our country’s relationship with Cuba and its people a year and a half ago, several revisions to the sanctions regime have focused on easing restrictions related to travel between the two nations.  In February 2016, Cuba and the United States agreed to reestablish commercial air travel between the two countries.  According to media reports, this agreement means the potential for 110 daily round-trip flights in and out of Cuba, including 20 daily flights to Havana.

Soon after the agreement was announced, major U.S. airlines submitted applications to fly commercial flights to Cuba.  Though tourist travel is still prohibited, twelve fairly broad categories of travel are authorized, including family visits, travel for government work, journalism, professional research, humanitarian work and educational activities, and “people-to-people” educational travel.

In mid-March of this year, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) again revised the Cuban Asset Control Regulations (CACR), permitting more travel-related transactions.  According to OFAC, the steps “expand opportunities for economic engagement between the Cuban people and the American business community.”  The agency announced the changes in preparation for President Obama’s historic trip to Cuba.

  • People-to-people educational travel. Previously, the general authorization for educational travel required that trips took place under the sponsorship of an organization and required that a representative from the organization accompany the travelers. The regulations no longer require booking through an authorized organization when going to Cuba under the people-to-people educational travel general license. This means that U.S. persons can freely travel to Cuba to engage in educational exchange activities that enhance contact with the Cuban people, support civil society in Cuba, or promote Cubans’ independence from their government, as long as they keep records of the travel transactions and full-time schedule of activities.

  • Financial Transactions. The regulations enable U.S. banks to process U.S. dollars and travelers’ checks from Cuban banks, to conduct U-turn transactions in which Cubans have an interest, and to allow Cuban nationals to open bank accounts to receive payments in the U.S.

  • Business Presence. In addition, the regulations allow certain carrier and travel services providers to maintain a business presence in Cuba under a general license.  This means that travel-service providers are authorized to establish and maintain subsidiaries, branches, offices, joint ventures, franchises, and other business relationships with any Cuban national, and enter into all necessary agreements or arrangements with such entity or individual.

These changes encourage much more travel between Cuba and the United States, ease restrictions that affect the ability to operate hotels and hospitality services in Cuba, and demonstrate a policy shift in favor of facilitating business, particularly in the travel sector, in Cuba.

Checking In: President Obama’s Historic Visit.  In late March 2016, President Obama visited Cuba as the first sitting U.S. president to visit Cuba since Calvin Coolidge visited in 1928.  Not only was President Obama’s visit a diplomatic feat as he quoted Cuban independence poet Jose Marti’s line: “Cultivo una rosa blanca” (“Cultivate a white rose”) in a live address on Cuban television, but it was also a marked invitation for more American business involvement in the island nation.  Notably, Marriott CEO Arne Sorenson accompanied President Obama on his visit.  According to media reports, Marriott is pursuing business opportunities to run or develop hotels on the island, and to provide training and opportunities for Cuban nationals to supply hotel needs.

Enjoy Your Stay: A Suite of Opportunities.  As a result of the steady changes in the travel regulations, many hotels and hospitality companies are eager to take advantage of the opportunities that await in Cuba.  Even before the most recent updates announced this year, Airbnb announced its presence in Cuba to provide bookings for U.S. travelers in the authorized travel categories.  More recently, the company announced it has received permission from OFAC to open its doors to non-U.S. travelers as well.  Starwood has reportedly signed three deals to open properties in Havana, apparently being the first hospitality company to obtain specific authorization from OFAC to operate hotels in Cuba.  We think this signals OFAC’s willingness to use its licensing authority favorably for hotel and hospitality companies looking to develop in Cuba.

Earlier this month, a trade fair in Havana hosted a hall full of companies in the construction industry eager to get in on the ground floor of real estate and hotel projects that seem to be on the horizon.  U.S. travel to Cuba reportedly increased between 77 percent in 2015, and this upward trend is expected to continue as a result of the recent regulatory changes.  As the travel restrictions ease, travel-related businesses may gain greater latitude to develop the infrastructure to support such travelers and provide economic benefits to the Cuban people.

Check All Your Belongings: Compliance Challenges to Consider

  • Working under General Licenses. Though there is a general license authorizing certain travel services, providing lodging services is still prohibited unless specifically licensed by OFAC. Tourist travel is still prohibited by statute. Businesses that wish to operate under the general licenses must put together procedures that comply with these restrictions.

  • Getting Authorization. In order to effectively negotiate and finalize agreements with Cuban counterparties for the provision of services outside the general licenses, U.S. companies must receive authorization from OFAC.  This makes doing business difficult because putting in the resources and time to apply and receive authorization may not make business sense unless companies have concrete opportunities.  OFAC is currently inundated with applications and Cuba questions.  Hotel and hospitality companies looking to expand in Cuba should plan as early as possible and be prepared for the license application process and approval to take several months.

  • Restrictions on Property and Development. The inability to own property outright under Cuban law is an obstacle for many hotel companies that seek to invest in facilities that will maintain and build their brands.  It is a challenge to find an existing property to develop or property on which to build. It can be an even greater challenge to import the materials needed to develop and maintain the property.  Even if a company acquires authorization to build and develop a hotel, there will be a plethora of suppliers who may also need to seek authorization.  S. businesses must plan accordingly when seeking authority to develop properties.

  • Dealing with the Cuban Government. S. businesses will have to learn quickly about negotiating with the Cuban government and getting government approvals because most potential counterparties are state-owned, and each step in the development process will likely include government involvement. This also raises corruption risks (Don’t forget the FCPA!) as companies wine and dine potential counterparties and work toward getting permits.

  • Employee Base. For foreign companies seeking to establish a brand in the market, restrictions on hiring may pose extreme challenges.  Employment in Cuba is not left to market dynamics. Hiring Cuban employees involves working with the Cuban government and hiring the personnel designated by the government.  Generally the employer is required to pay the Cuban government directly, and the government pays the employees.  Complying with such Cuban laws may fly directly in the face of a company’s business model and may compound the U.S. law compliance challenges.

  • Cuban Law. Having counsel who understand the Cuban legal landscape and regulatory challenges will be crucial for U.S. companies.  Structuring deals in Cuba that comply with Cuban law can be tricky.  The legal infrastructure in Cuba for foreign investment is not well developed, so U.S. companies will face a steep learning curve to successfully finalize and implement deals in Cuba.  Moreover, Cuban lawyers have very different ethical obligations than U.S. clients may be used to (including a virtual complete lack of attorney-client privilege).

Even with the host of challenges, exploring the Cuban market presents an intriguing opportunity for hotel and hospitality companies.  With the right compliance strategy and the right team, U.S. businesses could enjoy their stay in Cuba for years to come.

Article By Fatema K. Merchant & Lisa C. Mays of Sheppard, Mullin, Richter & Hampton LLP

© 2016, Sheppard Mullin Richter & Hampton LLP.

Lawsuit Challenges FDA Approval of Genetically Engineered Salmon

BullmonLast November, we posted that the Food and Drug Administration (FDA) had approved a genetically engineered (GE) salmon: AquaBounty Techonologies’ AquAdvantage Salmon. This approval marked the first time that the FDA authorized selling a genetically engineered animal for human consumption.

Immediate backlash followed the FDA’s November 19, 2015 announcement from environmental and consumer advocacy groups. On March 31, 2016, environmental and food safety groups, as well as fisherman trade associations, sued the FDA and related agencies in federal court in California. The suit seeks to reverse the FDA’s approval of the fish for human consumption.

The complaint alleges that the FDA failed in its statutory duty to take a “hard look” at how GE salmon will impact the environment. The plaintiffs warn that the FDA did not appreciate the risk that the farmed salmon would inevitably escape, “interbreed with wild endangered salmon, compete with them for food and space, or pass on infectious disease . . . .”

The plaintiffs also take aim at the FDA’s authority to regulate GE animals under the Federal Food, Drug, and Cosmetic Act (FFDCA), arguing that, back in 1938, Congress did not expect the FDA to regulate genetically engineered animals for human consumption: “GE animals present enormously different risks and impacts than drugs, requiring different expertise, analyses, and regulation than were contemplated when Congress enacted the FFDCA.”

Whether additional lawsuits will follow this one remains to be seen. In our November post, we predicted that consumers could sue to challenge the labeling of the GE fish. Although the FDA initially determined that AquaBounty would not need to label its salmon as GE, a provision in December’s 2016 Omnibus Appropriations Bill required the FDA to ban GE salmon imports until it published labeling guidelines for the fish. In February, the FDA issued that ban and announced its plans to establish labeling guidelines.

Even if AquaBounty puts FDA-approved labeling on its product, consumers still may sue under failure to warn and related legal theories. The food industry has had some success defending state law food labeling claims based on federal preemption. But the federal Nutrition Labeling and Education Act exempts claims based on the adequacy of safety warnings unless the FDA has actually considered a risk and determined that no warning is necessary. So, the key question in any consumer personal injury suit involving GE salmon likely will be whether the FDA considered the risk of the alleged harm in implementing its new labeling guidelines.

Article By Amy M. Rubenstein & Katia Asche of Schiff Hardin LLP

© 2016 Schiff Hardin LLP

Solazyme Becomes TerraVia, Shifts Focus To Food And Specialty Ingredients

On March 11, 2016, Solazyme announced a name change to reflect a new focus on food, nutrition, and specialty ingredients instead of biofuels. TerraVia™ (TerraVia), as Solazyme is now known, will create value in plant-based food through a transformational algae innovation platform. TerraVia will focus on developing AlgaVia® Whole Algae ingredients (lipid rich powder and protein) and AlgaWise™ Algae Oils, as well as consumer food products that currently include Thrive® Culinary Algae Oil. The Company will also focus on animal nutrition ingredients and personal care ingredients, including AlgaPur Oils. The fuels, industrial oils, and Encapso™ business previously run by Solazyme have been moved to a unit called Solazyme Industrials, which is likely to be sold off. This shift towards high-value, low volume product areas is not surprising given the current low oil prices that are hurting biofuel profits, and is a key component in the continued success of the biobased industry.

Article By Kathleen M. Roberts of Bergeson & Campbell, P.C.
©2016 Bergeson & Campbell, P.C.

Gluten-Free Go-Round re: Food Labeling

CookiesGingerbreadMenFDA extends comment period on proposed rule for gluten-free labeling of fermented or hydrolyzed foods.

  • FDA issued a proposed rule to address the application of “gluten-free” labeling requirements to fermented and hydrolyzed foods and foods that contain fermented and hydrolyzed ingredients.  The underlying issue is that uncertainty prevails in interpreting the results of current test methods for detecting gluten in such foods.

  • On February 12, FDA announced its intent to extend the comment period for this proposed rule.  Although the comment period technically closes on February 16, FDA will be reopening it to extend the timeframe for an additional 60 days (to be counted from the date that a notice reopening the comment period appears in the Federal Register).

  • The proposed rule would affect the labeling of foods and ingredients such as yogurt, hydrolyzed soy protein, distilled vinegar, and FDA-regulated beers (i.e., beers that are not made from malted barley and hops).  The rule also could affect beers regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB), as TTB has indicated that it may revise its own gluten claim policy once FDA has issued a final rule or other guidance.  Interested stakeholders are invited to submit comments via Regulations.gov (Docket Number FDA-2014-N-1021).

Article By Food & Drug at Keller and Heckman LLP

© 2016 Keller and Heckman LLP