Tag: food labeling

FDA Steps Up Enforcement of Label Violations for Food Imports

Posted on by Patrick Morin

I previously posted an article discussing the importance of accurate labeling, especially for food importers. Labeling errors are one of the most common reasons products shipped to the United States are refused entry. If a product is found to contain a labeling violation, the FDA may deem the product “misbranded,” making it a prohibited act to distribute the product in the U.S. Once the FDA identifies one mistake on a businesses’ labels, the agency is more likely to stop this businesses’ products at the border in the future.

In March 2018, the FDA refused entry to over 150 food products attempting to enter the U.S. These food products from various countries throughout the world now cannot be sold in the U.S. in their current form due to labeling violations, so now importers are faced with a difficult business decision.

There are three things importers can do with the refused products. First, they may re-label each item with FDA compliant labels. This would require the importer to design, print and affix new labels to each item refused entry within 15 days’ of receiving the refusal notice. The tight time-frame to accomplish these tasks is very difficult for smaller single-item shipments and almost impossible for larger multi-item shipments due to the manpower it would take to complete the labeling, in addition to the cost a labeling specialist will charge to expedite revised labels.

Another option is to export the products back to their port of origin or another suitable country (e.g., Canada, Mexico). While the importer would retain ownership of the products, the additional shipping cost may exceed the value of the underlying products. The last option, and usually the option of last resort, is to destroy the products while under FDA supervision. This usually occurs when the cost to re-label or export exceeds the value of the products refused entry.

FDA previously announced their intention to focus on import violations, as demonstrated by the March refusal list and their commitment to enforcing labeling laws. In order to avoid the high costs and delays resulting from a labeling violation, it is best to have food labels reviewed for FDA compliance prior to shipping the products to the U.S. The cost of such reviews are minimal in comparison to the cost of fighting to get your seized products released or exported due to a labeling violation.

If your business is unsure whether a product label is in compliance with, or need assistance in adapting your label to meet, FDA regulations Morsel Law can help. Order your flat-free label review to make sure your food label is in compliance.

FDA Label Review to Prevent Food Import Refusal

Posted on by Patrick Morin

Labeling violations are one of the leading causes of food import refusals to the United States. In fact, more than 7,000 labeling violations for food products were cited by the U.S. Food and Drug Administration (FDA) in 2017 alone.

If an imported food product is stopped by the FDA for a labeling violation they have three choices: detention, seizure or refusal of admission. None of these are good options for food importers. Know what to avoid to make sure this doesn’t happen to your business.

Below is a list of the top five labeling violations for food imports.

Nutrition information

 

More than 1,000 import refusals in 2017 were due to missing nutritional information. The FDA requires that most food and beverages are labeled with a specifically formatted nutrition facts panel. However, often import food labels include a nutrition facts panel from a foreign country. Unfortunately for the importer these panels don’t meet the FDA requirements and are therefore deemed misbranded under the law.

This will be even more important now that FDA has changed the Nutrition Facts panel to a new format. It is important to make sure you utilize the new format going forward to avoid potential labeling errors.

Ingredients

FDA requires that every ingredient included in a food or beverage be disclosed on the label in descending order of the prominence by weight. The FDA will not only review labels, but will sample products to ensure the labels are what they say they are, which is why it’s important to follow the rules when listing ingredients.

FDA regulations also require ingredients to be listed by specific  names. Imported food products, which often contain ingredients know by different names in their home country, frequently fail to list certain ingredients by the required name under FDA regulations.

Labeling in English

FDA requires that all information on labels appear in English. Labels may include other languages as well, but if a foreign language is used all of the information on the label must appear in that language as well.

Net Quantity

FDA requires a statement that provides the amount of food in a container or package. This statement must include both the U.S. and metric measurement and must be listed in the front of the package.

 

Manufacturer Name

The name and address of the manufacturer, packer or distributor must be listed on a food label. If the importer is not the manufacturer, or if the product is made for the importer, the name and address of the importer may be preceded by “Manufactured for” or “Imported by” if applicable.

 

If the FDA discovers that your food product has one of these labeling violations, the FDA will refuse entry or detain your product. This will end up costing you a lot of money and could potentially damage your relationships with buyers.

FDA is now also required to increase the number of routine inspections overseas at foreign food facilities. If a non-compliant label is found during an inspection, FDA can charge you to reinspect the facility to ensure the labels have been brought into compliance at a rate of $305 USD per hour.

Morsel Law can help assure your labels are FDA compliant through our label review service. Our experts will review and markup your labels to make sure they meet FDA regulations. Order your FDA import label review today and keep your import business running smoothly!

Label Reviews Are Critical For Food Importers

Posted on by Patrick Morin

I previously posted a similar article discussing the importance of label reviews for domestic produced products here. But a recent event reminded me to reiterate the importance of accurate labeling, especially for food importers. Non-compliant labels can cost you time, money and even your relationship with customers.

A few weeks ago, JFC International Inc. issued a voluntary recall for rice seasoning products shipped to the United States. Apparently, the recall was initiated after the company discovered the product was not labeled in English, which is required under U.S. law. Also, because the label was not in English, it is deemed to have failed to disclose allergens contained in the ingredients. Important to point out is that this isn’t JFC International Inc.’s first time being involved with a recall event; they issued a similar recall in 2016 for failing to label in English and undeclared allergens.

This event is an important illustration of how important it is to review your labels prior to shipping your products to the United States. First, one of the most common misbranding mistakes for imports is failure to label in English. This seems like a simple fix, but you would be surprised how often this occurs. Importers should require the shipper to forward a copy of the label prior to shipping to confirm compliance with U.S. law. Now this won’t stop mistakes by workers at the warehouse who load the EU labeled products onto a pallet instead of the U.S. bound product, but if you include language in your contract that makes the shipper responsible for all costs to correct the misbranding in the event the wrong product labels are attached, they will quickly change their quality control practices. This is especially true for shippers who have had to foot the bill after a container is stopped by U.S. Customs.

Second, does a voluntary recall trigger coverage under your product recall insurance policy? Generally, coverage isn’t triggered unless there is an “actual” contamination, which is usually proved by product testing or other evidence. For JCF International, if the recall was initiated for misbranding due to failure to label their products in English, the coverage would be denied. However, because the product contained “actual” allergens, then coverage would probably be triggered. But if the product didn’t contain allergens, then coverage would be denied. Even if the product didn’t contain allergens the company would still need to recall the product because it is still considered misbranded and in violation of the FDC Act, but the recall would potentially result is significant non-reimbursable expenses.

Most food label misbranding violations can be prevented through quality control measures. Importers should, if they have not already, institute best practices to minimize the risk of a potential violation that result in having to respond to FDA Notice of Action letter. These practices should also address who bears the cost and burden to deal with a misbranding violation. Prior planning can help ensure your business identifies and minimizes potential risks commonly associated with the food import industry.

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

President Signs Mandatory GMO Labeling Law: What You Need to Know

Posted on by Patrick Morin

Last week President Obama signed the National Bioengineered Food Disclosure Standard into federal law. The law mandates disclosure of genetically modified organisms (“GMO”) on food labels. The law directs the U.S. Department of Agriculture (“USDA”) to establish, within two years, a nationwide mandatory disclosure standard for bioengineered foods and the labeling procedures. This means that the law itself does not define the standard, but instead gives the USDA significant discretion to define and implement the required disclosure.

Below are some things manufacturers should know about the law:

  • Preemption of State Laws. The new law specifically preempts all state and local labeling requirements applicable to genetically engineered (“GE”) foods that do not mirror the language in the law. This would even apply to state laws already passed, including Vermont where mandatory GMO labeling went into effect in July.
  • Defining Bioengineered Food. The law defines bioengineered food as food that contains genetic material “that has been modified through in vitro recombinant deoxyribonucleic acid (DNA) techniques” and “for which the modification could not otherwise be obtained through conventional breeding or found in nature.” This definition could be interpreted as quite restrictive, so it will be important to watch the rule-making process to see how the law is interpreted.
  • Labeling Requirements. The law does not specify GMO labeling standards, this is left up to the USDA to determine. However, the law does state the methods to disclose GMOs in food, such as text on the packaging, a USDA-created symbol, or an electronic or digital link (such as a QR code) selected by the manufacturer. Small food manufacturers are provided the additional flexibility to disclose GMO ingredients either by listing a toll free number or link to website containing the disclosure on their labels. The purpose of the law was to disclose GMO ingredients on food labels so consumers searching grocery store aisles could make informed decisions, but law effectively fails to achieve its purpose because “disclosure” can be a link to somewhere else, not on the label itself.
  • You Aren’t What You Eat. Meat from animals that consume bioengineered food are exempt from disclosure. Specifically, the law prohibits the USDA from considering any food primarily derived from an animal because “the animal consumed feed produced from, containing, or consisting of a bioengineered substance.” So, for example, you go into a store to buy some beef for a family barbecue and, because of your concern about the safety of GE foods, you want to purchase a GMO free product. You’re aware that most cows slated for consumption are fed a diet containing mostly corn, a majority of which is bioengineered. The label doesn’t disclose GMO ingredients, so you think you’re safe. Think again. Even if the cow eats nothing else but bioengineered corn its entire life, the meat is not considered GE under the new law. Thus, Congress is betting that consumers will be uniformed about the provisions in the law and think their meat is non-GMO, even if its arguably not.

KIND Petitions FDA: Should Investors Lose Confidence in General Counsel?

Posted on by Patrick Morin

In a previous article I discussed how important it is for food businesses to conduct an in-depth label review prior to launching new products. Specifically, I addressed the FDA Warning Letter issued to KIND LLC and pointed out how costly labeling mistakes can be, especially when the risk could have easily been mitigated. In their response to FDA, KIND agreed to correct most of the technical errors noted in the letter; however, when it comes to changing their view of what foods are allowed to label themselves as “healthy” they don’t agree with what they refer to as “outdated” regulations.

In a citizen petition letter (“Petition Letter”) sent to FDA last week, KIND’s general counsel, Justin Mervis, notes that under current regulations “whether or not a food can be labeled “healthy” is based on specific nutrient levels in the food rather than its overall nutrition quality.” KIND then goes on to claim that new scientific evidence no longer supports this view and that, accordingly, FDA amend 21 C.F.R. 101.65(d)(2) in regards to nutritional content claims so that manufacturers may use the term “healthy” without regard to the total fat or saturated fat, if the source of such fat comes from fruits, vegetables, nuts, seeds, legumes, whole grains or seafood, provided that “such foods are used in their whole form or have been processed in such a way that did not materially degrade their nutritional value.”

While the Petition Letter makes several other recommendations, the majority of the Petition Letter is devoted to the argument that there is a disconnect between the Dietary Guidelines and what claims manufacturers are permitted to state on their labels. KIND argues that manufacturers should be permitted to make claims on their products labels (e.g., “nuts are part of a healthy diet”) that are consistent with federal dietary recommendations and current scientific evidence. As such, KIND goes on to request the FDA “undertake rulemaking to define a “dietary guidance statement” as a statement in food labeling about the usefulness of a food, or a category of foods, in maintaining healthy dietary practices.” The requested rule would permit claims on food labels to communicate that certain foods are useful in creating a diet that is consistent with current dietary recommendations, so long as those claims are not misleading.

While it isn’t a secret that food regulations, in some part, have become “outdated”, what makes KIND’s petition interesting is it comes after being caught violating the same regulations they are petitioning to amend. The real question is whether KIND knew their product labels were non-compliant when released into the marketplace or did they make a business decision to move forward with non-compliant labels in order to promote their “healthy” marketing campaign. While the saying “it’s better to ask for forgiveness then to ask for permission” may apply in certain situations, it’s probably not the best strategy when it comes to breaking federal law.

The role of the general counsel is to advise executive leaders on the state of the law, how certain laws affect their business and to provide pertinent information and/or legal advice to such leaders so they have the ability to make informed decisions. The general counsel is not required to be an expert in the industry in which their client operates (although it certainly helps); however, they should know the limits of their expertise and, when appropriate, bring in outside assistance with such expertise. If they don’t know their limits, or can’t identify potential legal issues outside their expertise, then their departure should be swift. After all what good is legal counsel if leaders are not able to rely on their advice?

It isn’t clear whether KIND made the decision to market their products with non-compliant labels, but if they did the general counsel shouldn’t take the blame. However, it took KIND six months to file their Petition Letter which leads me to believe the labeling violations occurred not because of a strategic business decision, but due to the lack of regulatory expertise and oversight from the general counsel’s office. If my presumption is correct, investors should demand answers and push for changes in the executive suite. These violations have resulted in significant expense revising labels, advertising and websites, in addition to substantial legal fees incurred responding to the Warning Letter and submitting the Petition Letter, and most recently defending consumer lawsuits. While attorneys play a significant role in advising businesses, legal fees cannot be entirely avoided; however, they can be efficiently managed. It is up to KIND’s investors to decide whether their capital in this situation was well-spent.