Calories Are Now Criminal

Over the past two years small business owners spent considerable time implementing procedures to comply with the health care requirements under the Affordable Care Act, also known as Obamacare.  Just when these business owners thought they could turn their attention back to doing what they do best, running their business, regulators issue new compliance requirements, this time targeting the food and beverage industry.

The Food and Drug Administration (FDA) recently issued a final rule on food labeling, as required under the Affordable Care Act, which provides for nutrition labeling of “standard” menu items for chain restaurants with 20 or more locations and “similar retail food establishments.”  If you are a restaurant owner the menu labeling rule will most certainly impact on your bottom line.  The rule is expected to cost the food industry some $315 million to implement and about $44 million per year after that, according to the FDA’s original cost-benefit analysis.  In addition to restaurants, the rule applies to food facilities in entertainment venues, such as movie theaters and amusement parks, take-out food establishments, bakeries, convenience stores, grocery stores and supermarkets.

So what’s required?  Calories must be displayed clearly and conspicuously on menus and menu boards next to the name or price of the item.  Menus and menu boards must also display “2,000 calories a day is used for general nutrition advice, but calorie needs vary.” Businesses must provide, upon consumer request, written nutritional information for each menu item.  The rule applies to “standard menu items”, including food on display and self-service food, but not daily specials, temporary menu items and condiments for general use typically available on a counter or table.  It is important to note that certain alcoholic beverages listed on menus or menu boards are also included under the rule.

While the cost of compliance will vary for each establishment, non-compliance is criminal.  Criminal you say?  How?  Well, businesses that fail to comply, or don’t get it right, will have affected menu items deemed “misbranded” which is a misdemeanor under the Food Drug and Cosmetic Act.  The FDA retains the discretion to hold those with supervisory responsibility, including those who are “responsible individuals” who certify the menu labeling, criminally liable for a misbranding violation.

While the menu labeling rule will most certainly face legal challenges, it’s important for businesses to start planning for the implementation as rule goes into effect on December 1, 2015.

If you have questions about menu labeling compliance, please contact our attorneys at Morsel Law.

Nature Valley Isn’t Natural Anymore

General Mills Inc., the maker of Nature Valley, agreed to keep the phrase “100% natural” off of its food products as part of legal settlement with several consumers and advocacy groups. In doing so, General Mills follows a string of other food companies, including Trader Joe’s, Kashi and PepsiCo, that have agreed to settle similar cases without admitting liability to avoid further litigation costs. The real issue here is whether General Mills violated the law? Well, under the current FDA regulations it appears they didn’t.

Up to this point the FDA has refused to define the term “natural”, but has noted on an informal statement support for the policy that “nothing artificial or synthetic is included in, or has been added to, the product that would not be expected to be there.” 58 Fed. Reg. 2302, 2407 (Jan. 6, 1993). The USDA, however, has defined “natural” (when applied to meat, poultry or eggs) as a product containing no artificial ingredient or added color and is only minimally processed. “Minimally processed” means that the product was processed in a manner that does not fundamentally alter the product.

The Food Labeling Modernization Act would prohibit the use of the word “natural” on a food that includes any synthesized ingredient, or any ingredient that has undergone chemical changes such as corn syrup, high-fructose corn syrup, high-maltose corn syrup, maltodextrin, chemically modified food starch, or alkalized cocoa. The bill also calls on the FDA to develop a more encompassing definition of natural.

Here, the plaintiffs accused General Mills of making misleading statements by marketing Nature Valley products as natural when they contained genetically modified and processed ingredients. Under the terms of the settlement, General Mills agreed not to use the “100% natural” claim for products that include processed ingredients, including corn syrup and the food additive maltodextrin. The settlement also prohibits the company from using the phrase on products that contain more than a trace amount of genetically modified ingredients. Interesting to note, new packages for Nature Valley granola bars now have a stamp that claims “made with 100% natural oats”.

Labeling and marketing your food product to comply with state and federal regulations is a difficult and time consuming process. If you need assistance in either of these regulatory areas please contact our attorneys at Morsel Law.