all things labeling: be disclosure, nfp, and more presentation for peanut … · 2019. 2. 8. ·...

February 7, 2019

Martin J. Hahn, PartnerVeronica Colas, Senior Associate

All Things Labeling: BE Disclosure, NFP, and MorePresentation for Peanut and Tree Nut Processors Association

| 2Hogan Lovells

• USDA’s bioengineered food disclosure standard– Scope of the disclosure standard

– Mechanics of disclosure

– Recordkeeping and enforcement

• Managing upcoming compliance dates

• FDA views on social media and websites as labeling

Agenda

Scope of standard

Hogan Lovells | 4

1. Who is responsible for the disclosure?

2. Is the product a “food”?

3. Does the food fall within the scope of the standard?

4. Is the food a “bioengineered” food requiring disclosure?

5. Do any exemptions apply?

How to Determine Whether Disclosure is Needed

Hogan Lovells | 5

• If food is pre-packaged (before receipt by a retailer)– the manufacturer or the importer of

record

• If a retailer packages the food – the retailer

• Bulk foods– retailer is responsible for signage

1. Who is responsible for the disclosure?

Hogan Lovells | 6

• “Food” is defined as a “food (as defined in section 201 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 321)) that is intended for human consumption”– Pet food and animal feed are not covered

– Dietary supplements, processing aids, and enzymes, are all “food”

2. Is the product a “food”?

Hogan Lovells | 7

• Law covers:– Products subject to labeling requirements under the FFDCA– Meat, poultry, and egg products subject to labeling requirements of

the FMIA, PPIA, and EPIA only if:– the most predominant ingredient would be subject to FFDCA;

OR– if the most predominant ingredient is broth, stock, water, or a

similar solution, and the second most predominant ingredient is subject to the FFDCA

• All other meat, poultry, and egg products are excluded• AMS defines “predominance” as the order of ingredients

on the label by weight– “Predominant ingredients are those most abundant by weight in the

product”

3. Does the food fall within the scope of the standard?

Hogan Lovells | 8

• Bioengineered food means—– A food that contains genetic material that has been modified

through in vitro recombinant deoxyribonucleic acid (rDNA) techniques and for which the modification could not otherwise be obtained through conventional breeding or found in nature; provided that

– Such a food does not contain modified genetic material if the genetic material is not detectable pursuant to § 66.9.

• Note, “conventional breeding” and “found in nature” are not defined

4. Is the food a “BE food”?

Hogan Lovells | 9

• For refined foods or ingredients that are derived from BE sources (e.g., corn syrup derived from BE corn), no disclosure is required if the food does not contain detectable modified genetic material

• Final rule sets out how to demonstrate that modified DNA is undetectable1. Records verifying the food is from a non-BE source2. Records showing the food has been subject to a refinement process “validated” to render

modified genetic material undetectable– Once process is validated, additional testing not needed, provided no significant changes to

process3. COAs or other testing records appropriate to the specific food tested that confirm the absence

of modified genetic material

• Rule includes standards of performance for testing• AMS states that if testing methodologies evolve so that the modified DNA in a

food becomes detectable in the future, the food would be subject to disclosure

Treatment of refined ingredients

Hogan Lovells | 10

• Alfalfa• Apple (Arctic™ varieties)• Canola• Corn• Cotton• Eggplant (BARI Bt Begun varieties)• Papaya (ringspot virus-resistant varieties)• Pineapple (pink flesh)• Potato• Salmon (AquAdvantage®)• Soybean• Squash (summer), and • Sugar beet

Bioengineered foods list

Hogan Lovells | 11

• Non-exhaustive!• The list is just a starting point – a “tool” to help regulated entities

– Even if a food is not on the list, companies with actual knowledge that a food they are selling is bioengineered are subject to the disclosure requirements

– AMS example: “enzymes, yeasts, and other similar foods produced in controlled environments”

– Simply because a crop or food is on the list does not necessarily mean it requires disclosure; if, for example, the regulated entity maintains records that they are using a non-bioengineered version of the food or the food does not contain

• AMS will maintain more detailed information on its website about each food/crop on the list to help determine whether disclosure is required

Bioengineered foods list

Hogan Lovells | 12

• AMS will review the list of BE foods annually, and update it as needed via rulemaking

• The final rule provides an 18-month compliance period from the effective date of any revisions for regulated entities to revise labels

• “AMS maintains that the products of technology, rather than the technology itself, should determine whether a food meets the BE food definition”

Future revisions to the BE foods list

Hogan Lovells | 13

• The final rule establishes a process for submitting a request or petition to limit the scope of the definition of bioengineered food, based on other “factors or conditions”

• AMS also listed one “factor or condition” in the final rule:– Incidental additives – i.e., those that are present in food at an insignificant level and

that do not have any technical or functional effect in the food – are not considered BE foods.

Do “other factors or conditions” affect the foods BE status?

4. Is the food a BE food?

Hogan Lovells | 14

• If they qualify as incidental additives that are not required to be labeled as ingredients on a food label, then they do not require disclosure as BE foods

• If they do not meet the incidental additive definition, may require disclosure unless they are otherwise exempt (e.g., if the modified DNA is not detectable)

• No categorical exemption for microorganisms or other fermentation products, but such an exemption could be considered through the factors and conditions petition process

Yeasts, enzymes, microorganisms

Hogan Lovells | 15

1. Food served in a restaurant or similar retail food establishment

– AMS suggests in preamble that packaged foods sold by manufacturers to food service establishments are not exempt

– The portions of grocery stores that prepare food for immediate consumption (e.g., deli or prepared food section) are exempt

– AMS suggests in preamble that unpackaged food in the produce section would be subject to disclosure if a BE food

– Foods that are packaged by retailers or sold in bulk require disclosure, although bulk foods may use signage rather than the label

2. Very small food manufacturers– Less than $2.5M in annual receipts

5. Are there any applicable exemptions?

Hogan Lovells | 16

3. A food derived from animals is not considered a BE food solely because the animal consumed feed produced from, containing, or consisting of a BE substance

– Milk, meat, eggs would not be considered “bioengineered” solely because the cow, animal, or chicken consumed BE feed

– Insects are considered animals, so honey is exempt

– Rennet and other enzymes derived from animals are also exempt (but microbial rennet and enzymes are not categorically exempt)

Exemptions, continued

Hogan Lovells | 17

4. Foods certified under the National Organic Program– Covers all NOP certified label categories (‘‘100% Organic,’’ ‘‘Organic,’’ and

‘‘Made with Organic ____’’)

– Does not cover products with less than 70% organic ingredients

– Organic products are also eligible for a “non-GMO” claim (per statute)

Exemptions, continued – organic foods

Hogan Lovells | 18

5. Foods with less than a designated amount of BE substances due to inadvertent presence

– Statute directs AMS to determine the amounts of a “BE substance” that may be present in order for a food to be considered a BE food

– “BE substance” = substance that contains modified genetic material

– e.g., BE soy in wheat flour would be a “BE substance”

– Final rule establishes a threshold for the inadvertent or technically unavoidable presence of BE substances of up to 5% for each ingredient, provided that no ingredients are intentionally used in the food that contain a BE substance

– No threshold for intentionally added BE ingredients unless the ingredient qualifies as an incidental additive

Exemptions, continued – Threshold

Hogan Lovells | 19

• As an example, we interpret the final rule as not requiring disclosure for a food that contains wheat flour as an ingredient, when the wheat flour contains no more than 5% of BE soy and BE corn due to cross contact

• Only customary business records required:

• “AMS will look to the records to determine whether a regulated entity intended to purchase non-BE ingredients and the documentation they have from their suppliers indicating as much”

Threshold

Mechanics of disclosure

Disclosure Options• Disclosure Must Be:

1. A text

2. Symbol

3. An electronic or digital link (can’t use URL), or

4. A text message disclosure

– A new option established by AMS based on the agency’s determination that consumers would not have sufficient access to the disclosure through only digital means under ordinary shopping conditions

Small businesses (at least $2.5M but less than $10M in annual receipts) get two more options:

5. A telephone number and language, or

6. A website URL

Additional flexibility for small and very small packages

21


1. A text disclosure

2. Symbol

3. An electronic or digital link (can’t use URL)


22

What does the text say?• “Bioengineered food”

• If the food is a raw agricultural commodity or a processed food that contains only BE food ingredients

• “Contains a bioengineered food ingredient”

• For a multi-ingredient food that contains one or more BE food ingredients and does not fall into the first category above

“May contain” not permitted!


1. A text

2. Symbol

– Incorporates the word “bioengineered”

– No “contains a bioengineered food ingredient” option

– Black and white or specified color versions may be used

– Symbols found on AMS website

3. An electronic or digital link (can’t use URL)


23

Disclosure Options • Disclosure Must Be:

1. A text

2. Symbol



24

Electronic Disclosure RequirementsOn package:1. Scan here statement. On-package language must appear directly

above or below the link: “Scan here for more food information” or equivalent language that only reflects technological changes

– “Scan anywhere on package for more food information,” “Scan icon for more food information”

2. Link. No specific requirements for how link is to appear (other than general prominence and placement requirements). Disclosure may not collect, analyze, or sell any personally identifiable information about consumers or the devices of consumers.

3. On-package phone number . Must provide access to the disclosure at any time of day. The following must appear in close proximity to the on-package link: “Call 1-____________ for more food information”

Disclosure accessed by link:• Link must provide the disclosure (text or symbol) on the first screen to

appear on the device after the link is accessed• Page must exclude marketing and promotional material

25


1. A text

2. Symbol


4. A text message and “text [command word] to [number] for more bioengineered food information”

– Must include a statement on the package that instructs consumers to “Text [command word] to [number] for bioengineered food information”

– Number would be a telephone number or short code that immediately responds with the disclosure using the disclosure text required under option 1

26


1. A text

2. Symbol



• Small businesses (at least $2.5M but less than $10M in annual receipts) get two more options:


– Number and “Call for more food information”

– Telephone number must provide the disclosure at any time of day

6. A website URL & “Visit [URL] for more food information”

• Additional flexibility for small and very small packages27


1. A text

2. Symbol



• Small businesses (at least $2.5M but less than $10M in annual receipts) get two more options:


6. A website URL & “Visit [URL] for more food information”

• Additional flexibility for small and very small packages– Shortened language on labels: “Call for info”, “Text for info,” “Scan for info”

– For very small packages only may use existing website URL or telephone number to provide disclosure

– Very small package = < 12 sq. in total surface area

– Small package < 40 sq. in total surface area

28

General Prominence and Placement Requirements

• Apply to all disclosure methods

• Prominence– No specific text size requirement

– Sufficient size and clarity to appear prominently and conspicuously on the label, making it likely to be read and understood by the consumer under ordinary shopping conditions

• Placement – 3 options1. Information panel, directly adjacent to the statement identifying the name and location

of the handler, distributor, packer, manufacturer, importer, or any statement disclosing similar information

2. Anywhere on PDP

3. If insufficient space on 1 & 2, on an alternate panel

29

Voluntary disclosure

Voluntary disclosure - scope• The rule is prescriptive with regard to the foods that qualify for the voluntary disclosure• The following foods clearly qualify for the voluntary disclosure

– Foods sold by very small food manufacturers (must use same disclosure as BE foods)

– Foods sold by restaurants and similar institutions (must use same disclosure as BE foods)

– Foods that contain a refined ingredient derived from a listed BE crop but do not contain detectable DNA (must use voluntary disclosure options with distinct language)

• The rule does not authorize a voluntary disclosure for:– Incidental additives that are bioengineered

– Inadvertent BE substances at no more than 5% per ingredient

– An animal product derived from an animal that consumed BE feed

– Being derived from a bioengineered food not on the bioengineered food list

– Certified organic foods

• AMS states that an FSIS-regulated food that does not fall within the scope of the standard may not bear the voluntary disclosure regardless of the other ingredients in the product

31

Voluntary disclosure

• Final rule allows voluntary disclosures that a food is derived from a bioengineered source, including when modified genetic material is not detectable in the food (e.g., refined ingredients)

• Using one of same methods as for mandatory disclosure but using different language– Text: “derived from bioengineering” or “ingredient(s) derived from a

bioengineered source” or “corn syrup derived from a bioengineered source”

– Symbol: AMS has established a unique symbol that can be used on foods derived from BE

– Electronic or Digital Link and phone number

– Text Message must use above language or symbol, as appropriate 32

Voluntary disclosure - scope• If you can’t call them “bioengineered” or “derived

from bioengineering,” what can you say about foods that are not BE foods and that don’t fall under the voluntary disclosure provision?

– “Nothing in this subpart will prohibit regulated entities from making other claims regarding bioengineered foods, provided that such claims are consistent with applicable Federal law.”

– No similar provision for foods that are not BE foods

– First Amendment considerations

33

Recordkeeping and enforcement

Enforcement• Law prohibits:

– Knowingly failing to disclose that a food is bioengineered as required by the standard and USDA’s regulations

– Declaring that a food is bioengineered except in compliance with the federal standard

• Companies must maintain and make available any records required under USDA regulations to establish compliance with the standard

• USDA authorized to conduct audits of records to demonstrate compliance with the standard

• AMS does not have recall authority based on compliance with disclosure standard

• “AMS does not intend to test final food products to determine compliance with the rule”

35

Hogan Lovells | 36

• Must keep “customary or reasonable” records to demonstrate compliance– For example: Supply chain records, bills of lading, invoices, supplier attestations, labels,

contracts, brokers’ statements, third party certifications, laboratory testing results, validated process verifications, and other records generated or maintained by the regulated entity in the normal course of business

• Records must contain sufficient detail as to be readily understood and audited• If a food is on the BE foods list, must keep records regarding the food or

ingredient• If a food bears a disclosure based on actual knowledge and is not on the list,

must maintain records for such food or ingredient• If records demonstrate that a product originates from a country where BE

food is not commercially grown, those records are sufficient to justify lack of disclosure and demonstrate compliance with the NBFDS

Recordkeeping

Hogan Lovells | 37

• May be in paper or electronic form

• May be maintained at a central location

• Must maintain records at least 2 years after the date the food is sold or distributed for retail sale

• Must provide to AMS within 5 days upon request, unless AMS extends the deadline

• AMS would provide at least 3 days notice if the agency needs to access records at the entity’s place of business

Recordkeeping

Hogan Lovells | 38

• Any interested person may file a written statement or complaint with the agency about a possible violation of the disclosure standard

• If AMS determines that reasonable grounds exist for an investigation of the complaint, it may conduct an audit or examination of the records of the entity responsible for the disclosure– After completing the audit or examination, AMS would make its findings available to the

entity audited

– The entity could then request a hearing objecting to the AMS finding

– After the conclusion of the hearing, or after 30 days from the entity’s receipt of the finding, if the entity does not request a hearing, AMS would make public a summary of the final results of the audit or examination

Audits

Hogan Lovells | 39

• No specific exemption for products certified by third parties as “non-GMO”

• Records created through third-party certification programs could be used to support a decision not to disclose, to the extent the records align with the rule

• Statute and final rule do not address “non-GMO” claims, other than:– Certified organic foods may bear a non-GMO claim

– Simply because a food does not require the mandatory disclosure does not mean it automatically qualifies as non-GMO

A note on “non-GMO”

Hogan Lovells | 40

1. Mandatory compliance date = Jan. 1, 2022– “Implementation date” of Jan. 1, 2020 for large food manufacturers; Jan. 1, 2021 for small

manufacturers with ≥ $2.5M and < $10M in annual receipts

2. Refined ingredients/foods not subject to mandatory disclosure, provided they contain no detectable levels of modified DNA

3. Voluntary disclosure permitted for refined ingredients/foods using specific text (“derived from bioengineering”) or symbol, but narrow in scope

4. Threshold = no disclosure required where the food contains no more than 5% per ingredient of inadvertent/technically unavoidable presence of BE substances (No 0.9% threshold for intentionally added BE ingredients)

5. Incidental additives exempt; no other categorical exemptions other than those in statute (e.g., certified organic foods)

6. Disclosure– Text = “bioengineered” or “contains [a] bioengineered food ingredient(s)”

– Symbol uses the term “bioengineered” (see image of symbol to the right)

– Digital/electronic link – must provide on-pack telephone number and disclosure must appear on first screen accessed from link

– Text message disclosure option

Summary: Quick highlights of final rule

Managing upcoming compliance dates

Hogan Lovells | 42

BE Food Disclosure Compliance Date

Jan. 1, 2020

Implementation date for larger manufacturers (≥ $10M annual sales)

Jan. 1, 2021

Implementation date for larger manufacturers (≥ $2.5M and < $10M annual sales)

Jan. 1, 2022

Mandatory compliance date for all regulated entities

Hogan Lovells | 43

• Mandatory compliance date– Beginning Jan. 1, 2022, “all regulated entities must comply with the requirements”

– Applies to date the food “enters commerce”

• Implementation period– “Regulated entities should begin implementing the NBFDS… by

– identifying the foods that will need to bear a BE disclosure,

– the records necessary to meet the recordkeeping requirements,

– and the type of BE disclosure they will use on their products”

– May voluntarily comply early

– May also use now-preempted Vermont GMO labeling language during this period

– Stickering and ink-jetting permitted

– Dates align with compliance dates for FDA’s nutrition labeling rules

• No label runout period

BE Food Disclosure Compliance Date

Hogan Lovells | 44

Compliance dates for NFP and BE food rules – large manufacturers

NowContinue

implementing FDA nutrition labeling

rules

Jan. 1, 2020

All FDA-regulated products labeled

on or after this date must bear the new

NFP

Begin implementing BE

food disclosure rule; may continue using VT language

Jan. 1, 2022

--

Foods entering commerce on or

after this date must comply with the BE food disclosure rule

Hogan Lovells | 45

Compliance dates – small manufacturers ($2.5M to < $10M annually)

NowContinue

implementing FDA nutrition labeling

rules

Jan. 1, 2021

All FDA-regulated products labeled

on or after this date must bear the new

NFP

Begin implementing BE food disclosure rule; may continue using VT language

Jan. 1, 2022

--

Foods entering commerce on or

after this date must comply with the BE food disclosure rule

FDA’s view on social media and websites as labeling

Labeling vs. advertising

• FTC and FDA share jurisdiction over claims made for food products– FDA regulates label and labeling

– FTC regulates advertising

• Both agencies’ laws and regulations prohibit false and misleading labeling or advertising, regardless of the form of communication

47

Labeling – legal definition

• The FFDCA broadly defines the term “labeling”: – “all labels and other written, printed, or graphic matter (1) upon any

article or any of its containers or wrappers, or (2) accompanying such article.” 21 U.S.C. § 321(m)

• FDA’s regulations state: – Labeling includes all written, printed, or graphic matter accompany

an article at any time while such article is in interstate commerce or held for sale after shipment or delivery in interstate commerce. 21 C.F.R. § 1.3(a)

48

Labeling – court interpretation

• The term “labeling” has been broadly interpreted by the courts – The Supreme Court held that no physical

attachment is necessary for labeling to “accompany” an article but, rather, an item is labeling if it supplements or explains the article

– Labeling includes explanatory materials that are part of an “integrated distribution program” Kordelv. United States, 335 U.S. 345 (1948)

• Generally, if a claim is not permitted on a label, it’s not permitted in labeling

49

Hogan Lovells | 50

• There are no FDA laws or regulations that specifically address Internet promotion

• FDA consistently takes the position that websites are subject to regulation as labeling when the product label contains the website address or the company sells products on its website

• The agency’s position is evolving to include statements made in social media, too– Particularly when linked to the product website

Are websites and social media labeling?

Social media

51

• Beginning ~ 2012, FDA Warning Letters have cited the following as labeling: – A comment on a Facebook Timeline post – An instance where the company “liked” a

Facebook post from a customer who said the company’s dietary supplement had helped “keep cancer at bay”

– Claims on a Twitter page – Search terms linked to a company’s website – Blog posts linked from a company’s website

Recent FDA Warning Letters

• FDA Warning Letter to Newton Everett/WR Group Inc. (Sept. 2017)

• All social media accounts linked to company website

• FDA objected to:– Facebook post: "Tea tree oil can destroy airborne pathogens … also an antiseptic agent

and has anti-inflammatory properties"

– Tweet: along with an image of your BIOVEA st.john’s wort, BIOVA maca, and BIOVEA 5-HTP products: "These three #supplements can … help with #depression and #anxiety“

– Instagram post: "Oregano Oil is a natural antibacterial"

52

Recent FDA Warning Letters

• FDA Warning Letter to BrainAlert, LLC (Dec. 2017)

• “… when scientific publications or references are used commercially by the seller of a product to promote the product to consumers, such references may become evidence of the product's intended use. For example, under 21 CFR 101.93(g)(2)(iv)(C), a citation of a publication or reference in the labeling of a product is considered to be a claim about disease treatment or prevention if the citation refers to a disease use and if, in the context of the labeling as a whole, the citation implies treatment or prevention of a disease”

53

Best practices for websites and social media

• Treat as labeling

• Train your marketing and social media teams on FDA and FTC requirements– Disease claims vs. structure-function claims

– Health claims

– Nutrient content claims

– Disclosures of paid connection for endorsements/testimonials

• Stay on top of new labeling and advertising developments

54

Hogan Lovells | 55

Questions?

"Hogan Lovells" or the "firm" is an international legal practice that includes Hogan Lovells International LLP, Hogan LovellsUS LLP and their affiliated businesses.

The word “partner” is used to describe a partner or member of Hogan Lovells International LLP, Hogan Lovells US LLP or any of their affiliated entities or any employee or consultant with equivalent standing.. Certain individuals, who are

designated as partners, but who are not members of Hogan Lovells International LLP, do not hold qualifications equivalent to members.

For more information about Hogan Lovells, the partners and their qualifications, see www.hoganlovells.com.

Where case studies are included, results achieved do not guarantee similar outcomes for other clients. Attorney advertising. Images of people may feature current or former lawyers and employees at Hogan Lovells or models not

connected with the firm.

© Hogan Lovells 2018. All rights reserved

www.hoganlovells.com

all things labeling: be disclosure, nfp, and more presentation for peanut … · 2019. 2. 8. ·...

Documents