Food and Beverage News and Trends - June 28, 2024

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

APHIS avocado and mango inspections in Michoacán to resume. On June 22, US ambassador to Mexico Ken Salazar announced that inspections of avocados and mangoes in Michoacán state will gradually resume. On June 14, the USDA announced it was temporarily halting inspections of these fruits in Michoacán, effectively stopping all shipments. The USDA statement referred to concerns about the safety of its locally based Animal and Plant Health Inspection Service (APHIS) inspectors; Mexican media reported that two APHIS inspectors had been illegally detained and assaulted in Paracho. APHIS inspectors “will gradually begin to return to the packing plants following recent aggression against them,” Salazar said, while expressing concern about inspectors’ safety. “In fact,” he stated, “more work still needs to be done so that the inspectors are safe and can resume inspections.” Michoacán is the primary source of the world’s avocados – about 80 percent of its $3 billion avocado crop is exported to the US, and 50 percent of the world’s avocados come from that state. APHIS inspectors work in Mexico to ensure exported avocados and mangoes don’t carry diseases that could hurt US farms. A February 2022 ban on Michoacán avocado shipments, arising from threats made to an APHIS inspector, was lifted after a week, once the state government implemented a security plan.

Health Canada proposes to remove brominated vegetable oil from permitted food additives list. After completing an updated safety assessment of brominated vegetable oil (BVO), Health Canada reports that it has not been able to establish an acceptable daily intake for BVO as a food additive based on the available safety data. It has concluded that BVO should not continue to be permitted to be used as a food additive and has proposed to remove BVO from the “List of permitted food additives with other accepted uses.” Health Canada is considering providing a one-year transition period to allow impacted beverages to be reformulated and relabelled. Industry stakeholders are invited to offer feedback until July 30, 2024.

FSIS updates Guideline for Residue Prevention. The USDA’s Food Safety and Inspection Service (FSIS) has announced revisions to its FSIS Guideline for Residue Prevention, which addresses the prevention of violative residues in meat and poultry slaughter establishments. The guideline is part of the US National Residue Program (NRP) through which FSIS aims to keep domestic and imported meat, poultry, and egg products that are adulterated because of illegal residues out of commerce. Comments regarding the guideline may be submitted through August 26, 2024. See the updated guideline here.

FDA proposes to exempt cottage cheese from traceability rule. On June 14 the FDA issued a proposed exemption for certain cottage cheese products from the requirements of the Food Traceability Rule. The Food Traceability Rule establishes additional recordkeeping requirements, beyond those in existing regulations, for companies that manufacture, process, pack, or hold foods the agency has designated for inclusion on the Food Traceability List. In the proposed rule, the FDA announced its intention to consider exempting cottage cheese regulated under the Grade A Pasteurized Milk Ordinance (PMO) from the rule’s requirements. Much of the cottage cheese produced in the nation is regulated through the National Conference on Interstate Milk Shipments (NCIMS), which relies on the PMO. The FDA and the NCIMS have together developed a cooperative federal-state program to ensure the sanitary quality of milk and milk products shipped interstate. For more information on the Food Traceability Rule, read here.

Canada: Federal government announces 2024 Livestock Tax Deferral Program updates. On June 14, 2024, Canada’s federal government announced that livestock producers in drought-affected areas will receive an early Livestock Tax Deferral (LTD) for the 2024 season. Livestock producers in designated areas who are forced to sell part or all of their breeding herd due to drought, flooding, or excess moisture may be able to defer a portion of their income to the following tax year. This helps reduce the tax burden of the sale and offsets the cost of rebuilding herds. To defer income under the LTD provision, the breeding herd must be reduced by at least 15 percent. This year, the process for identifying Livestock Tax Deferral regions has been streamlined and now includes a buffer zone to assist producers whose operations are on the edge of affected areas. The program this year encompasses areas in Saskatchewan and Manitoba, with most of Alberta also included.

FSIS to implement digital signatures for export certificates for China: Beginning on July 1, 2024, export certificates for meat and poultry products (excluding casings and egg products) exported to the People’s Republic of China will be digitally signed in the FSIS Public Health Information System (PHIS) and printed on plain paper, including a watermark, by industry personnel with PHIS access. FSIS inspection program personnel will print only upon request when industry does not have a functional printer or PHIS access. For additional information, see the FSIS website.

Company in lead-poisoning recall files for bankruptcy. WanaBana, a manufacturer of fruit pouches, has filed for Chapter 7 bankruptcy. In October 2023, a significant recall of the company’s fruit pouches was initiated after the FDA discovered elevated lead levels in WanaBana Apple Cinnamon Fruit Purée pouches samples, as well as in similar products marketed under other labels. The products, primarily sold in dollar stores across the US, were found to contain more than 2,000 times the legal limit for lead in food. More than 400 people across 44 states have been diagnosed with lead poisoning linked to the tainted cinnamon applesauce pouches; their average age is 1. A growing number of lawsuits have been filed in the US against WanaBana. Chapter 7, the so-called liquidation process, terminates a company’s operations and takes the company completely out of business. See some of our earlier coverage of the tainted applesauce story here and here.

Ag groups agree with EPA in a Clean Water Act lawsuit. On June 6, the National Pork Producers Council, the American Farm Bureau Federation, the US Poultry & Egg Association, and the United Egg Producers filed a brief in support of the EPA’s position in a lawsuit in the US Court of Appeals for the Ninth Circuit. In the case, Food & Water Watch and 12 other organizations are seeking to expand and strengthen the regulation of factory farm pollution under the Clean Water Act. The industry groups’ brief supports the EPA’s decision not to make changes in its factory farm water pollution program. Oral arguments in the case are expected to be scheduled for Fall 2024.

Study finds xylitol is associated with increased risk of heart attack and stroke. On June 6, Science Daily reported that in a recent study, researchers at the Cleveland Clinic found that higher amounts of the sugar substitute xylitol are associated with an increased risk of cardiovascular events such as heart attack and stroke. Xylitol is a sweetener used in sugar-free candy, gums, baked goods, and oral products like toothpaste. Last year, the same research team found a similar link between erythritol and cardiovascular risk. Xylitol is not as prevalent as erythritol in keto or sugar-free food products in the US but is commonly used in other countries. Dr. Stanley Hazen Chair of Cardiovascular and Metabolic Sciences at Cleveland Clinic's Lerner Research Institute and Co-Section Head of Preventive Cardiology in the Heart, Vascular & Thoracic Institute, who led the study, stated, “This study again shows the immediate need for investigating sugar alcohols and artificial sweeteners, especially as they continue to be recommended in combatting conditions like obesity or diabetes." The study included a large-scale patient analysis, preclinical research models, and a clinical intervention study.

Avian flu update. As of June 21, the USDA has confirmed H5N1 infections in 116 dairy herds in 12 states; after those figures were announced, Iowa and Colorado each announced infections in additional herds that are not yet included in those statistics.

• In an op-ed in Agri-Pulse published on June 22, Department of Agriculture Secretary Tom Vilsack urged dairy producers and state and local governments to take steps to improve biosecurity, staving off the further spread of H5N1. “The more we learn about H5N1, the more we understand that good biosecurity is a critically important path to containing the virus,” he wrote. “I am calling on producers to use our resources to enhance their biosecurity measures and states and producers to opt into our support programs and herd monitoring programs, which are designed to limit the spread of this disease in dairy cattle” The USDA and other federal and state agencies are offering an array of resources, but many dairy operators have not taken them up. For instance, only four herds’ owners have enrolled in a USDA voluntary testing pilot launched on June 3.


• Michigan has reported the highest number of dairy farm cases to date. A USDA report on H5N1 transmission on dairy and poultry farms in Michigan, released June 21, states that, based on the epidemiological findings, “the majority of links between affected dairy premises, and between dairy and poultry premises, are indirect” – that the virus is likely being carried among farms by farmworkers, visitors, and vehicles that transport animals and are not cleaned between uses, and that cows are likely being infected when their udders come in contact with the virus. On June 21, Arnold Monto, co-director of the Michigan Center for Respiratory Virus Research and Response, said, “I think one of the reasons why we think we have so much in Michigan is that we’re testing more than most other states.” In fact, he stated, “We don’t know how more widespread it is” across the country.


• The dairy show at the annual Shiawassee County Fair, in central Michigan, has been cancelled. County fair organizers said they had arrived at the decision after “much deliberation” and consultation with State Veterinarian Dr. Nora Wineland. “This decision is out of an abundance of caution and for the safety and well-being of our county’s dairy herds,” they said. Wisconsin, Michigan, and Iowa have released new testing requirements for handlers of lactating dairy cows hoping to show animals at fairs, including a negative test for bird flu and a certificate documenting a veterinarian's inspection within a week before arriving at the fair. In Colorado, the Department of Agriculture has released guidance which asks livestock owners and fair organizers to increase biosecurity practices and monitor animals’ health.


• On June 20, Iowa Governor Kim Reynolds authorized a 30-day disaster proclamation for Sac County following confirmation of an outbreak of H5N1 in a commercial turkey flock. This is Iowa's third outbreak of the virus in a commercial flock this year. The proclamation authorizes state agencies, such as Iowa Homeland Security and the state Department of Agriculture and Land Stewardship, to work with the USDA to “eliminate the disease in the disaster county where it has been found.” The proclamation expires on July 20. Iowa is also ramping up required testing of dairy herds within a 12.5 mile radius of bird flu outbreaks at poultry farms; some dairy operators outside that radius are submitting tests from their herds, which has led to additional detections.


• On June 18, the Canadian Food Inspection Agency, in conjunction with the Public Health Agency of Canada and Health Canada, reported that 600 retail milk samples tested from across Canada contained no evidence of HPAI fragments or disease. They advise that this provides additional reassurance that commercially sold milk and milk products in Canada remain safe to consume due to mandatory pasteurization. In terms of vaccination, Canada, unlike some other countries, has not yet ordered doses of an H5N1 vaccine.


• On June 25, health authorities in Finland announced that, in a world first, preemptive bird flu vaccination will be offered to certain agricultural workers, starting as soon as next week. Finland purchased vaccines for 10,000 people, each consisting of two injections, as part of a European Union procurement of up to 40 million doses. The vaccine will be offered to those seen to be at high risk, such as poultry and fur farm workers.


• “How scared should you be of bird flu?” the New York Times asked on June 17. The feature article opens with a simple flowchart to help readers understand their personal level of risk from the H5N1 virus depending on their occupation and some personal habits. Health officials and, for instance, are told “you should worry” because H5N1 is “a potential pandemic threat. You should be on high alert.” Similarly, agriculture officials should worry because farmworkers are at risk and the virus could harm the agricultural industry and the economy. For those who eat milk and meat, “there’s little need to worry right now” – unless you drink raw milk or eat undercooked meat. That behavior, the flowchart says, is risky. “Raw milk and undercooked meat can carry infectious H5N1 and other pathogens.”


• Meanwhile, in the US sales of raw milk are soaring. NielsenIQ reports that since March 25 weekly sales of raw cow’s milk have risen as much as 65 percent compared with the same period a year ago. In Canada, selling raw milk is illegal through regulations enacted federally in 1991.