Food and Beverage News and Trends - May 3, 2024

This regular publication by DLA Piper lawyers focuses on helping clients navigate the ever-changing business, legal, and regulatory landscape.

AG Garland recommends rescheduling marijuana. On April 30, the US Drug Enforcement Administration (DEA) announced that Attorney General Merrick Garland has recommended reclassifying marijuana from Schedule I to Schedule III. This action follows FDA’s medical and scientific review of marijuana under what is known as the eight-factor analysis. That analysis, among other things, considers a drug’s abuse liability, which includes its abuse potential (including its history of abuse), pharmacological effect, and overall risk to public health. In September 2023, FDA made a recommendation to the DEA to reclassify cannabis from Schedule I to Schedule III. If the White House agrees with this recommendation, DEA will publish a Federal Register notice and solicit public comment before finalizing the reclassification. Once it is final, there would be implications for the cannabis industry, including fewer restrictions on medical research and the availability of tax deductions. The impact on banking is less clear, but could pave the way for passage of additional legislation that could provide access to institutional banking and capital markets. However, without legislative changes to the Federal Food, Drug, and Cosmetic Act, there are still legal barriers to putting cannabis in products regulated by the FDA, such as foods, dietary supplements, and drugs.

FDA publishes long awaited final rule on agricultural water. On May 2, FDA published the final rule on agricultural water to further enhance the safety of produce. This rule replaces the controversial pre-harvest agricultural water requirements for covered produce (other than sprouts) under the FSMA Produce Safety Rule issued in 2015, which industry said were not feasible to implement. This final rule requires systems-based agricultural water assessments to determine and guide appropriate measures to minimize potential risks associated with pre-harvest agricultural water. Specifically, this rule:

• Establishes requirements for agricultural water assessments that evaluate a variety of factors that are key determinants of contamination risks associated with pre-harvest agricultural water. This includes an evaluation of the water system, water use practices, crop characteristics, environmental conditions, potential impacts on water from adjacent and nearby land, and other relevant factors.
• Includes testing pre-harvest agricultural water as part of an assessment in certain circumstances.
• Requires farms to implement effective mitigation measures within specific timeframes based on findings from their assessments. Hazards related to certain activities associated with adjacent and nearby land uses are subject to expedited mitigation.
• Adds new options for mitigation measures, providing farms with additional flexibility in responding to findings from their pre-harvest agricultural water assessments.

Farms are required to conduct assessments of their pre-harvest agricultural water annually, and whenever a significant change occurs, to identify any conditions likely to introduce known or reasonably foreseeable hazards into or onto covered produce or food contact surfaces. This rule does not alter the agricultural water standards used in sprout production, which are already in effect.

The rule has a staggered compliance date as follows:

• For very small farms: 2 years, 9 months after the effective date of the final rule
• For small farms: 1 year, 9 months after the effective date of the final rule
• For all other farms: 9 months after the effective date of the final rule

As with other FSMA rules, the agency is taking an “educate before and while we regulate” approach to support compliance.

Salmonella declared an adulterant in raw breaded stuffed chicken products. The USDA’s Food Safety and Inspection Service has announced its final determination to declare Salmonella an adulterant in raw breaded stuffed chicken products when the contaminant exceeds a specific threshold. That threshold has been set at 1 colony forming unit (CFU) per gram or higher. The determination is part of the larger FSIS effort to reduce Salmonella illnesses associated with the raw poultry supply. FSIS notes that raw breaded stuffed chicken products make up less than .15 percent of the total domestic chicken supply, but from 1988 to 2020 have been linked to about 5 percent of all chicken-associated Salmonella outbreaks. FSIS will carry out verification procedures, including sampling and testing of the raw incoming chicken component of these products prior to stuffing and breading, to ensure producing establishments control Salmonella in these products. If the chicken component in these products does not meet this standard, the product lot represented by the sampled component would not be permitted to be used to produce raw breaded stuffed chicken products. The determination, including FSIS’ sampling and verification testing, will be effective 12 months after its publication in the Federal Register. FSIS aims to address Salmonella contamination in other raw poultry products later this year.

CFIA updates Safe Food for Canadians License. The Canadian Food Inspection Agency (CFIA) has made updates to the application process for obtaining the Safe Food for Canadians License (SFC License). Applications for an SFC License now require disclosure related to licensable activities on certain foods including specialty mushrooms, supplemented beverages, leafy greens, and berries. Food businesses that need to amend their license may do so through their online CFIA account.

Fluorinated polyethylene petition. FDA issued a Federal Register notice on April 26, announcing the agency has filed a petition submitted by the Environmental Defense Fund, Breast Cancer Prevention Partners, Center for Food Safety, and Environmental Working Group, among others, to remove fluorinated polyethylene as an approved food additive. More specifically, the petitioners argue that fluorinated polyethylene manufactured consistent with FDA’s current food additive regulation (21 CFR § 177.1615) can produce polymeric per- and poly-fluorinated alkyl substances that can migrate to food and, therefore, is not safe pursuant to section 409(c)(5) of the FD&C Act. Comments on the petition can be submitted to FDA by June 25, 2024.

Avian flu update. The H5N1 outbreak among US dairy cattle continues to evolve.

Genomic data. Analysis of genomic data released by the USDA to a public repository indicates that the HPAI outbreak among US cattle probably began with a single introduction from wild birds in late December or early January – meaning it likely has been silently spreading among US cattle since then. At this writing, the virus has been detected in 34 dairy operations in eight US states. Scientists have expressed strong concerns that the USDA scrubbed critical date and location information from the data which would shed light on the outbreak’s origins and evolution. The data, they also note, was not released until almost four weeks after the outbreak was announced. Martha Nelson, a genomic epidemiologist at the National Center for Biotechnology Information, stated, “In an outbreak response, the faster you get data, the sooner you can act. Whether we’re not too late, to me, that’s kind of the million-dollar question.”

US dairy cattle to be tested for bird flu before interstate shipping. On April 24, the USDA ordered that all dairy cattle must test negative for bird flu before being shipped in interstate commerce. The department said it “has determined that good cause exists to impose these requirements without notice and comment, as further delay would threaten to hasten the spread of the disease, multiplying the potential harm to livestock, poultry, the dairy industry, and, potentially, human health.”

Dairy samples. The FDA reported last week that one in five samples of grocery store milk it tested contained fragments of the H5N1 virus. Results were higher in areas with outbreaks among dairy cattle. The FDA stated that the fragments are not viable and do not pose a threat to human health and that pasteurized milk is safe to drink. On May 1, the FDA announced that a second round of testing of retail dairy products, such as sour creams, cottage cheeses, and milk, as well as tests of powdered formulas for infants and toddlers, did not detect any viral fragments, and reiterated that pasteurization is protecting consumers.

Raw milk. FDA also issued a warning to consumer urging them not to drink raw milk. the interstate sale of raw milk is illegal, but a few states allow it within their borders – among them Texas, Idaho, and New Mexico, which each are experiencing bird flu outbreaks among dairy herds. Some scientists are now calling for raw milk sales to be totally banned in light of the potential for human infection.

Raw beef. On April 29 the USDA said it will begin testing ground beef samples from grocery stores in states with dairy herd outbreaks. It will also test ground beef known to be infected with the virus and cooked at different temperatures to determine its safety for human consumption.

Canada: Concerns rise over bird flu outbreaks. In Canada, while the H5N1 virus has already become widespread among poultry operations – with more than 11 million farmed birds being culled to date – the CFIA reports that it has not yet been detected in any Canadian livestock. Canada requires dairy producers to monitor all farm animals for signs of avian flu infection, follow biosecurity measures, and contact their local CFIA office if there is a “high degree of suspicion” of the disease. But concerns are rising among Canadian farmers about the potential spread of the virus among their herds. In part this is due to the interconnectedness of the beef market – cattle are routinely shipped between the US and Canada and, as of this writing, the World Organisation of Animal Health “does not recommend restrictions on the movement of healthy cattle and their products at this time.” CFIA announced this week that it will being requiring testing for avian flu in lactating dairy cattle imported from the US. The CFIA is also encouraging veterinarians to watch for signs of avian influenza in dairy cattle. On April 25, 2024, the CFIA stated on social media that it was not yet “testing raw or pasteurized milk”. Meanwhile, Canadian scientists are calling for more aggressive biosecurity measures and warning of risks of the current limited surveillance in Canada.

FSIS webinar on voluntary US-origin claims. Establishments choosing to include voluntary US-origin claims (like “Product of USA”) on the labels of FSIS-regulated products will need to comply with new regulatory requirements – set out in the “Voluntary Labeling of FSIS-Regulated Products with US-Origin Claims” final rule – by January 1, 2026. On May 15, FSIS will host the next webinar discussing the rule and providing information about the related guidance. Pre-registration is not required. The webinar will be held on Microsoft Teams from 1:00 - 2:15 pm ET. To access it, visit the events page on the FSIS website.

House Committee on Oversight and Accountability holds hearing on FDA. On April 18, FDA Commissioner Dr Robert M. Califf testified before the House Committee on Oversight and Accountability regarding all FDA-regulated product areas. In his opening statement, Dr. Califf addressed several food issues, including the importance of nutrition initiatives to public health, supply chain challenges, and the reorganization of the Human Foods Program and the field component in FDA. He also noted the agency’s limited budget and personnel to address the many challenges facing the agency and attributed FDA’s successes to the dedication of the FDA workforce. Several members criticized the agency for failing to provide adequate oversight in several areas, including infant formula, contaminants in seafood, and heavy metals in foods for young children, including cinnamon applesauce. Califf urged Congress to pass legislation mandating that food manufacturers test for lead in products imported into the US, pointing out that this is how drug manufacturing already works: “The manufacturers of drugs have to test every batch“ for possible contamination. Members also asked questions about sesame labeling and the adequacy of FDA’s authorities to address issues of concern. Several members expressed support for new authorities in the food areas. 

USDA proposes final rule for content of school meals. On April 24, the USDA announced a final rule that represents its attempt to reduce added sugars and further reduce the amount of sodium in school meals served across the nation. The agency is planning to put into place a two-phase approach to lowering the levels of added sugars. Phase 1 will target the added sugar content of specific products, and phase 2 will establish weekly limits. For the first time, added sugars will be limited in school meals nationwide, with small changes happening by fall 2025 and full implementation by fall 2027. The USDA said that it had heard concerns from parents and teachers about excessive amounts of added sugars in some foods, which factored into this new limit. In addition, schools may continue to offer flavored and unflavored milk, which provide essential nutrients that children need, such as calcium, vitamin D, and potassium. By fall 2025, there will be a new limit on added sugars in flavored milk served at school breakfasts and lunches.

Phosphatidylserine (soy) authorized as supplementary ingredient. A safety assessment of phosphatidylserine (soy) by Health Canada’s Food Directorate has resulted in phosphatidylserine (soy) being added to Part IV of the government of Canada’s List of Permitted Supplemental Ingredients. The maximum amount of phosphatidylserine (soy) cannot exceed 300 mg per day. Use of phosphatidylserine (soy) as a supplemental ingredient must comply with the compositional and labelling requirements found in Part IV of the government of Canada’s List of Permitted Supplemental Ingredients.

FSIS issues alert for ground beef that may be contaminated with E. coli. On April 20, the USDA’s Food Safety and Inspection Service issued a public health alert for ground beef products produced by the Greater Omaha Packing Company that may be contaminated with E. coli. The problem was discovered by the company, which notified FSIS that it had advertently used a portion of the contaminated beef in products that were subsequently shipped to food service institutions and retail outlets across the US. There have been no confirmed reports of illness resulting from consumption of these products.

US senators introduce bill to ban junk food advertising to kids. On April 19, US Senators Bernie Sanders and Peter Welch (both D-VT) and Cory Booker (D-NJ) introduced the Childhood Diabetes Reduction Act, which would establish a new federal ban on junk food advertising direct the National Institutes of Health to investigate the dangers posed by ultraprocessed foods; and develop a national education campaign for children and caregivers through the Centers for Disease Control and Prevention. “The future of our nation depends on a continued investment in the health and well-being of our children,” said Booker. “More and more of our children are developing diabetes and obesity primarily because a handful of corporate food giants push addictive, ultraprocessed foods to drive up their profits.”

FDA official says more funding is needed for food safety oversight. In an April 5 webinar sponsored by the Alliance for a Stronger FDA, FDA Deputy Commissioner for Human Foods Jim Jones said that an increase in agency funding would be necessary for the FDA to tackle such issues as supply chain resiliency, food safety, and modernization of its work. He specifically commented on state-level legislation barring the use of certain food additives. The FDA still considers these additives to be safe. Jones stated during the webinar that with additional funding, the FDA could conduct necessary reviews about these additives, potentially leading to future federal-level regulation. “The year ahead,” he said, “will also be one where we invest in food chemical safety, in particular the development and implementation of post-market reassessment of chemicals, both additives and contaminants, which occur in foods.”

Illinois Senate moves to ban four food additives. On April 18, the Illinois state Senate passed Illinois SB 2637, which would ban four food additives that are found in common products including candy, soda, and baked goods. The bill, known as the Illinois Food Safety Act, passed on a 37-15 bipartisan vote and now heads to the state House. the bill, which would ban brominated vegetable oil, red dye No. 3, propylparaben and potassium bromate, goes further than California’s first-in-the-nation ban on food additives. Like the California law, the Illinois bill would not go into effect until 2027. Legislature sin other states are also considering similar bills. One New York measure would ban seven food additives – azodicarbonamide, brominated vegetable oil, butylated hydroxyanisole, potassium bromate, propylparaben, Red Dye No. 3, and titanium dioxide.

Calgary food establishments shut down by Alberta Health Services. The Alberta Health Services (AHS) has ordered the closure of five food establishments in Calgary due to the purchase and resale of uninspected meat. The closure orders were issued after evidence was found of uninspected meat being sold at these establishments. In Canada, any meat offered for sale must be federally or provincially inspected to ensure it is free of disease. The orders pertained to four grocery stores and one warehouse and distribution centre. AHS is warning consumers about potential health risks associated with eating such meat, emphasizing the importance of purchasing meat from inspected sources to ensure safety and quality standards are met.

California’s next step in implementing landmark plastic pollution law focuses on single-use plastic packaging. California has unveiled draft regulations aimed at curbing single-use plastic waste within the state. The regulations would place significant and specific requirements on plastic packaging producers to enhance design and create end markets for recycled material, with penalties for noncompliance. As incentives, the regulations would offer $55 million in grants for companies pursuing these aims. See our alert.

No more dry towns in New York? Today, every municipality in New York state has the right to prohibit the sale of alcohol within its borders – a local option dating back to the end of Prohibition in 1934. New York legislators are considering major revisions to the state's nearly 100-year-old alcoholic beverage control law that could change this. In addition to addressing such issues as licensing, hours of operation, and temporary permits for craft beverages, the bills before the state Senate and Assembly would prohibit all municipalities from banning alcohol sales, now and in the future. Seven New York towns currently have total bans on the sale of alcohol – the largest of these is Caneadea (pop. 7,000), which has been dry since Prohibition. The Senate bill advanced out of committee early this month and is on the chamber’s calendar.

Court permits suit on new supplement law to proceed. Citing the Dormant Commerce Clause of the US Constitution, the US District Court for the Eastern District of New York will allow the Natural Products Association (NPA) to pursue a motion for a preliminary injunction against a new New York state law. The court was ruling on April 23 on the NPA’s challenge to a new law that bans the sale of over-the-counter weight loss and muscle building supplements to consumers under the age of 18. Governor Kathy Hochul signed the law, AB 5610, in October, and it went into effect on April 22.

CSPI report on safety of certain “natural flavors” in food, including isoeugenol. The Center for Science in the Public Interest (CPSI) published a report in March entitled “Hidden Ingredients: What are 'Flavors' and 'Spices,' and are they Safe?” The report focuses on safety and labeling issues with regard to flavors and spices in food products, highlighting the potential risks of isoeugenol and other natural constituents of certain plants used as food flavoring. Citing data IARC 2B “possibly carcinogenic” classifications and animal studies, CSPI urges FDA to take strong measures against the use of isoeugenol and other natural substances in food products. CSPI previously filed a citizen petition urging FDA to remove Red 3 from the list of approved color additives.

Are microplastics in the diet a hidden danger to health? An April 22 article for CNN noted that microplastics – tiny fragments of plastics that can range from 5 millimeters to one micrometer in size – can be found in a vast number of foods. If the bit of plastic is small enough, for example, fruits and vegetables can absorb a microplastic through their root systems and transfer chemical bits to the plant’s stems, leaves, seeds, and fruit. Salt and sugar can also be packed with plastic, according to recent studies. Although there is no definite scientific knowledge on the health impact of these tiny amounts of plastic, the article said, a March 2024 study found that people with microplastics or nanoplastics in arteries in their necks were twice as likely to have a heart attack or stroke or to die from any cause over the next three years than people who had none.