Category: food label claims

Update: Avoiding Costly Mistakes For Your Food Business

Posted on by Patrick Morin

In an article I published last fall, the maker of Hellman’s mayonnaise sued Hampton Creek Inc., the maker of Just Mayo, accusing the company of false advertising for calling its eggless spread “mayo”. But due to the negative publicity Unilever received which painted it as a corporate bully, they eventually dropped the suit. However, Hampton Creek’s worries have not disappeared as they are now facing another legal challenge.

Earlier this month, a class-action lawsuit was filed in Florida state court again stating, among other things, that Just Mayo is misleading and therefore “misbranded” in violation of federal law. Unlike the previous suit, these plaintiffs are also asserting that Hampton Creek violated the Florida Deceptive and Unfair Trade Practices Act, which have more flexible standards than the federal Latham Act (the act under which the previous suit was filed). Considering many legal experts at the time thought Unilever has a strong case, Hampton Creek could be in a bit of trouble this time around. There is no multi-national corporation to launch a campaign against, only consumers who claim they were misled into thinking Just Mayo’s product was actually mayonnaise. Although I’m sure they are working diligently to come up with a strategy to combat their new foes.

The FDA regulations state that “mayonnaise” must contain at least 65% oil by weight, vinegar, and egg or egg yolks. However, Just Mayo doesn’t include eggs, instead it gets its emulsification from vegan pea protein. Hampton Creek states that it calls its spread “mayo”, not “mayonnaise”, and therefore argues that it doesn’t need to comply with the “mayonnaise” definition.

The plaintiffs’ claim that Just Mayo misleads customers who think they are buying actual mayonnaise, not an egg-free spread. Under Federal law products are “misbranded” if their “labeling is false or misleading in any particular” (see 21 U.S.C. 343). The plaintiffs’ claim, as one of many reasons, Just Mayo is misleading because the label for features an egg with a plant growing over it and it refers to its product as “mayo” and “mayonnaise” in its marketing materials. Again, this is up for the court to decide and so only time will demonstrate whether this argument is a correct interpretation of the law.

Food manufacturers should ensure they thoroughly understand FDA regulations before labeling their products. This is not only to avoid a false advertising lawsuit, but also to avoid misbranding. It’s a prohibited act to distribute misbranded products and manufacturers can be subject to FDA enforcement and/or private party lawsuits. Whether the lawsuit could have been avoided, would be difficult to determine. However, food companies may minimize the chances of their products facing a legal challenge by consulting with an attorney familiar with FDA regulations.

If you need assistance navigating or complying with the laws affecting your food or beverage businesses, please feel free to contact our attorneys at Morsel Law.

New York Passes GMO Labeling Bill

Posted on by Patrick Morin

On March 3, 2015, the New York State Assembly Committee on Consumer Affairs and Protection voted to pass bill which would require all food made with genetically modified organisms (“GMOs”) to state the presence of GMOs on their label.

The bill would require labeling for raw agricultural commodities, processed foods, seed and seed stock produced with genetic engineering.   Under this proposed law, any food for human consumption, seed or seed stock offered for retail sale in New York is misbranded if it is entirely genetically engineered or partially produced with genetic engineering and that fact is not clearly and conspicuously disclosed on the product’s packaging.  Fines for misbranding are a civil penalty of not more than $1000 per day, per product.

Any person, firm, corporation, or other legal entity may be held responsible for false labels and misrepresentations, but retailers are not subject to penalties unless: (a) the retailer is the manufacturer of the GMO raw agricultural commodity, processed food, seed, or seed stock and sells the GMO product under a brand it owns; or (b) the retailer’s failure to label was knowing and willful.

However, there are various exemptions for misbranding built into the bill.  For example, food consisting entirely of, or derived entirely from, an animal that has not itself been produced with genetic engineering does not need to be labeled as GMO, regardless of whether the animal was fed with any food produced with genetic engineering.

Other exemptions include:  products that were grown, raised, produced, or derived without the knowing and intentional use of GMO seed or food if the manufacturer provides a written statement in support of this lack of knowledge and intent; alcoholic beverages that are subject to regulation by the Alcoholic Beverage Control Law; food that has been lawfully certified to be labeled, marketed, and offered for sale as “organic”; and food that is served, sold, or otherwise provided in any restaurant, food facility, or food retailer that is engaged in the sale of food prepared and intended for immediate human consumption.

This proposed statute bears a striking similarity to the statewide GMO labeling bill rejected by California lawmakers in 2014, with nearly identical definitions and safe harbor exemptions.  Unlike the proposed California law, however, New York would enforce the law through civil penalties issued by the State Department of Agriculture and markets rather than through an injunction sought by the state Attorney General to stop continued violations of the law.  Further, unlike Connecticut and Maine’s GMO-labeling laws, New York’s proposed law does not have a triggering requirement based on when a certain number of states approve related legislation.

If passed, New York’s GMO labeling law would take effect twenty-four months after it becomes law. New York would be the fourth state to approve a GMO-labeling law, which would then trigger Connecticut and Maine’s related laws.  New York’s GMO labeling law, however, will likely face legal challenges similar to the lawsuit filed by the Grocery Manufacturers Association seeking to rescind Vermont’s GMO-labeling statute.

Stay turned for further updates as the bill makes it way through the New York state assembly.

Nature Valley Isn’t Natural Anymore

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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.

Avoiding Costly Mistakes For Your Food Business

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Just Mayo labeling violation

Unilever PLC, the maker of Hellman’s mayonnaise, has sued California startup Hampton Creek Inc. accusing the company of false advertising for calling its eggless spread “mayo”.  The consumer products giant is demanding that the maker of Just Mayo change its label and is also seeking compensation for unspecified damages.  The question for food companies is could this costly lawsuit have been avoided?

The FDA regulations state that “mayonnaise” must contain at least 65% oil by weight, vinegar, and egg or egg yolks.  However, Just Mayo doesn’t include eggs, instead it gets its emulsification from vegan pea protein.  Hampton Creek states that it calls its spread “mayo”, not “mayonnaise”, and therefore argues that it doesn’t need to comply with the “mayonnaise” definition.

Unilever also claims that Just Mayo misleads customers who think they are buying actual mayonnaise, not an egg-free spread.  Whether this is true or not will be determined by the courts, however, under Federal law products are “misbranded” if their “labeling is false or misleading in any particular”. See 21 U.S.C. 343.  So how is Just Mayo misleading?  Well, for one, the label for Just Mayo features an egg with a plant growing over it and it refers to its product as “mayo” and mayonnaise” in its marketing materials.  We aren’t saying that Just Mayo is “misbranded”, again that is for the courts to decide, but food manufacturers should watch this case closely as it may have an impact their business going forward.

Food manufacturers should ensure they thoroughly understand FDA regulations before labeling their products.  This is not only to avoid a false advertising lawsuit, but also to avoid misbranding.  It’s a prohibited act to distribute misbranded products and manufacturers can be subject to FDA enforcement and/or private party lawsuits.  So to address the initial question posed above, whether the lawsuit could have been avoided, would be difficult to determine.  However, food companies may minimize the chances of their products facing a legal challenge by consulting with an attorney familiar with FDA regulations.

If you need assistance navigating or complying with the laws affecting your food or beverage businesses, please feel free to contact our attorneys at Morsel Law.

Is My Product Organic or Natural?

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As the natural and organic market continues to gain strength, with sales topping $81 billion in 2012, businesses are striving to meet consumer demand.  However, for businesses that are entering this sector in hopes of capturing some of the market share, understanding the difference between labeling your product as “organic” and “natural” is essential to ensure you don’t run afoul of federal regulators.

All agriculture products sold, labeled or represented as organic need to be in compliance with the Organic Foods Production Act of 1990 (Act).  Pursuant to the regulations promulgated by the Act, organic growers and handlers (including food processors and distributors) must be certified by state or private agencies/organizations under the uniform standards developed by the USDA; however, farmers and handlers who sell less than $5,000 of organic products per year, and retail food establishments that sell organic products but do not process them, are exempt from certification.  In order to label your product as “organic” at least 95% of the contents need to be certified organic.  Products labeled as “made with organic” ingredients must contain at least 70% organically produced ingredients.  Obviously, if you label your product “100% organic” it must be true.  The USDA organic seal may be used only on products that are “100% organic” or “organic”.  Fines of up to $11,000 per violation can be levied against any person who knowingly sells or labels a product as organic that is not produced in accordance with the regulations.

Now labeling your product as”natural” is a whole different story.  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.  Although there has been much litigation concerning natural labeling, there is no clear standard under the FDA regulations.

If you need assistance navigating or complying with the laws affecting your food or beverage businesses, please feel free to contact our attorneys at Morsel Law.

“Gluten-Free” Must Now Be Gluten-Free

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After a year of phasing in compliance, the Food and Drug Administration (FDA) now requires any food labeled “gluten-free,” to contain no more than 20-parts per million of gluten, which is the lowest level detectable in food and one that would generally be acceptable even for those who suffer extreme gluten-intolerance health problems. The rule also holds foods labeled “without gluten,” “free of gluten,” and “no gluten” to the same standard. The rule also brings the United States in line with international labeling standards that are employed across Europe and other parts of the world.

Products must not contain any wheat, barley or hybrids, or be derived from a gluten-containing grain that has not been processed to remove gluten. However, some products that are labeled “gluten-free” that have levels above the defined levels of acceptability for gluten-free products may still be allowed to remain on shelves for the next six months to a year as the ban isn’t retroactive. While the FDA has insisted that companies phase out above-acceptable levels of gluten in their gluten-free products, those with long shelf-lives, like pasta, may remain on shelves.

The FDA will engage in additional rule-making to establish how it will determine compliance for hydrolyzed and fermented foods (e.g., yogurt, sauerkraut, hydrolyzed protein) because the current methods cannot quantify gluten in these foods. In the meantime, hydrolyzed and fermented foods that meet the definition of “gluten-free” may bear a gluten free claim. The FDA will exercise enforcement discretion to beer that currently makes a “gluten-free” claim and that are (a) made from a non-gluten-containing grain or (b) made from a gluten-containing grain, where the beer has been subject to processing that the manufacturer has determined will remove gluten. This enforcement discretion pertains only to beers subject to FDA’s jurisdiction and that were making a “gluten-free” claim as of August 5, 2013. Please note that the FDA regulates non-malt beers (beers made without malted barley or hops).

The effective compliance date of the rule is August 5, 2014. Products labeled prior to the compliance date that bear the claim “gluten-free” will not be subject to regulatory action by FDA. However, any product labeled by the manufacturer on or after August 5, 2014, bearing a “gluten-free” labeling claim that does not comply with the definition will be subject to regulatory action. The “gluten-free” final rule applies only to packaged foods, the FDA expects restaurants that use “gluten-free” on their menus are consistent with the federal definition; however, the final rule does obligate restaurants to be in compliance.

If you need assistance to determine whether your food product is in compliance with the FDA labeling requirements, please contact the attorneys at Morsel Law.