Food and Beverage News and Trends - June 14, 2024

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

FDA’s reorganization of Human Foods Program and other modernization efforts have been approved. On May 30, 2024, FDA announced that the reorganization or the Human Foods Program had been approved. The reorganization creates a unified Human Foods Program (HFP) by realigning the functions of the Center for Food Safety and Applied Nutrition (CFSAN), the Office of Food Policy and Response, and key functions from the Office of Regulatory Affair (ORA) under one organizational structure. As a result, ORA will be renamed the Office of Inspections and Investigations (OII) and will focus on its core mission of field operations, which will include imports. The changes to OII will affect all FDA-regulated product centers, beyond foods, by transferring the compliance functions and labs formerly in ORA to the product centers. FDA is targeting implementation of these changes for October 1, 2024. Find out more about the reorganization here.

Canada amends the Competition Act: Implications for the grocery sector. Responding to rising food prices across Canada, in September 2023, the government proposed the Affordable Housing and Groceries Act (Bill C-56) which includes amendments to the Competition Act. Bill C-56 is expected to come into effect on December 16, 2024. Among other things, it will grant the Competition Bureau powers to conduct market studies and compel the production of documents and information, including the examination of executives under oath. The Bill targets market control abuses by prohibiting excessive pricing and curbing arbitrary fees charged to suppliers. Additionally, the Bill is expected to simplify the criteria for identifying abuse of dominant market positions, now requiring the Bureau or private litigants to prove only one of two conditions – either engagement in anti-competitive practices or a likely substantial impact on competition, rather than both. Penalties for violations have been increased to as much as $35 million on a subsequent offence ($25 million for a first offence). Furthermore, the legislation expands the Bureau's authority to prohibit agreements between non-competitors that could substantially prevent or lessen competition, addressing specific concerns about large chains' use of property controls to exclude independent grocers from prime locations.

FDA renews federal efforts to reduce food loss and waste. On May 30, the FDA, USDA, and EPA announced they had signed a formal agreement renewing the Federal Interagency Collaboration to Reduce Food Loss and Waste. FIFLAW was originally created in 2018 and first renewed in 2020. In a significant expansion of the federal collaboration, the US Agency for International Development has joined the collaboration bringing its international reach to the goal of a 50 percent reduction of food loss and waste by 2030. In December 2023, FIFLAW published the "Draft National Strategy for Reducing Food Loss and Waste and Recycling Organics," which aims to prevent the loss and waste of food and increase recycling of organic materials, reduce greenhouse gas emissions, save households and businesses money, and build cleaner communities. Find out more about the Strategy in our bulletin. Also on May 30, USDA announced it is funding a new Center for Research, Behavioral Economics and Extension on Food Loss and Waste and a Pilot Consumer Education Campaign on Food Loss and Waste. Those projects will be led by Purdue University and Ohio State University.

Canada’s Ministry of Health encourages calcium intake. Calcium intake is crucial for maintaining healthy bones, but inadequate consumption in Canada has led to calcium being categorized as a shortfall nutrient. Concerned that front-of-package (FOP) nutrition labeling regulations might negatively impact calcium intake, Canada’s Minister of Health has issued a Marketing Authorization to Permit a Lower Calcium Threshold for Exemptions from the Requirement for Prepackaged Products to Carry a Nutrition Symbol in the Case of Cheese, Yogurt, Kefir and Buttermilk under subsection 30.3(1) of the Food and Drugs Act. This authorization aims to broaden the eligibility for dairy-related exemptions from FOP nutrition labeling requirements by establishing a lower calcium threshold for prepackaged products like cheese, yogurt (including drinkable yogurt), kefir, and buttermilk.

Canada amends Food and Drugs Act. Bill C-368, An Act to amend the Food and Drugs Act (Natural Health Products) had its Second Reading in the House of Commons on May 29, 2024. This enactment amends the Food and Drugs Act to provide that natural health products are not therapeutic products within the meaning of that Act and therefore not subject to the same monitoring regime as other drugs.

FSIS updates guideline for donating foods to nonprofits. FSIS has made changes to and clarified certain aspects of the FSIS Guideline to Assist with the Donation of Eligible Meat, Poultry & Egg Products to Non-Profit Organizations. The Guideline was originally issued in 2020 to help establishments and nonprofits that donate or receive donated meat, poultry, and egg products help reduce food loss and waste and combat food insecurity by addressing common food donation questions. Among the changes, FSIS has specified which products are covered under the guideline; added information on donating egg products to improve understanding of the relevant statutes, regulations, and FSIS policies; added a reference to FDA’s Sanitary Transportation of Human and Animal Food Final Rule to assist stakeholders in keeping products safe during transport; and added a section addressing limited liability protection for donors.

New food safety regulations in effect in Nunavut. The Nunavut government has introduced new food safety regulations, which became effective May 1, 2024, as part of the updated Public Health Act. These regulations aim to ensure the safety, health, and well-being of Nunavummiut by ensuring the safe manufacturing, handling, preparation, distribution, and storage of food. Various food-related establishments, such as restaurants, grocery stores, childcare centers, and institutional kitchens, must now obtain permits to operate under the new rules. These establishments will continue to undergo inspections by Environmental Health Officers. Individuals selling homemade food at community markets, bake sales, or directly to consumers may also be impacted by the regulations, depending on the risk level of the food they sell. The government is providing support to facilitate compliance with the regulations without imposing undue burdens. Additional detail may be found on the Environmental Health webpage or by contacting the regional Environmental Health Officer.

New York state legislature passes Good Food Bill. State and local governments purchase enormous amounts of food to feed such institutions as schools, senior centers, hospitals, shelters, and correctional facilities. But state procurement laws typically require that the “lowest responsible bidder” be chosen – the decision of vendor is largely driven by price. On June 6, the New York state legislature passed the Good Food Bill, which, by allowing municipalities to consider factors other than cost (eg, racial equity, sustainability), would shift governments’ purchasing power to values-based procurement. It would also offer practical tools, technical support, and resources to support public institutions. In addition, the Good Food Bill would hold large vendors accountable for better practices. The bill is now on the desk of Governor Kathy Hochul awaiting signature.

New York council member asks FDA to increase its regulation of chain restaurants. On May 24, New York City Council Member Keith Powers introduced a resolution urging the FDA to require chain restaurants to include added sugars information in the nutrition information that they make available to consumers upon request. The resolution, according to Powers and the Center for Science in the Public Interest, addresses a key challenge to full implementation of the Sweet Truth Act, a New York City law that requires warning icons adjacent to chain restaurant menu items with more than a day’s worth of added sugars, or 50 grams. Because the FDA now only requires added sugars information for prepackaged foods and not restaurant menu items, the New York City rule will at first only apply to prepackaged items as well as to fountain sodas and other menu items with an identical prepackaged version.

Study: Soda taxes have modest effect in reducing childhood obesity. On May 30, Beverage Daily reported on a new academic study that examined whether taxes on sugar-sweetened beverages are an effective tool for tackling childhood obesity. The study from the University of Washington, published in JAMA Network Open, assessed more than 6,000 children between ages 2 and 18 who lived either in Seattle, which has such a tax, or in a nearby urban comparison area that does not have one. It found a modest decrease in a measure of obesity among children living in Seattle compared with the other area. The lead author of the study said, “Taken together with existing US studies, our results suggest sweetened beverage taxes may be an effective policy for improving BMI. Future research should test this association using longitudinal data in other US cities with sweetened beverage taxes.”

Study: Vegan diet + lifestyle changes may reduce cognitive impairment. A small randomized controlled clinical trial has found that significant lifestyle changes, beginning with a plant-based diet, may reduce cognitive impairment in those with early Alzheimer’s disease. The study, led by Dean Ornish, MD, and published on June 7 in in the journal Alzheimer’s Research and Therapy, began with 51 people with early Alzheimer’s or mild cognitive impairment who were randomized into two groups. One group exercised every day, meditated to reduce stress, and ate a vegan diet that was delivered to their homes. The people in the other group maintained their usual habits. At the end of the 20-week trial, most of those who had made the lifestyle changes showed statistically significant improvements; no improvements were found in the control group. Dr. Suzanne Schindler, an associate professor of neurology at Washington University School of Medicine in St. Louis, stated, “I would describe this as a really positive, small pilot study, a starting point for additional research.”

Avian flu update.

• The H5N1 virus has now been found in dairy cows in 12 US states – most recently, Minnesota, Wyoming, and Iowa.


• Exclusive reporting from Reuters found that dozens of US cows infected with H5N1 have either died or been slaughtered in South Dakota, Michigan, Texas, Ohio, and Colorado. A Michigan State University Extension educator told Reuters that one farm in Michigan killed about 10 percent of its 200 infected cows after they failed to recover from the virus. Figures for avian flu-related cow mortality are not yet available.


• Across the world, concerns are growing about the potential spread of the virus to humans. H5N1 does not infect people easily and to date there have been no reports globally of person-to-person transmission. The fear is that its uncontrolled spread in mammals – not only dairy cattle, but animals like cats and farmed minks – could create conditions in which an evolving virus spills over into the human population.


• Particular concerns are being raised in two areas. The first of these: sales in the US of raw milk. It is highly likely that one vector of the spread of avian flu among dairy cattle is aerosolized droplets of raw, infected milk. In an open letter on June 6, the FDA called on state, local, and Tribal entities to do more to protect the public from the risks of raw milk. The agency asked states to conduct more testing of herds that produce raw milk for sale and recommended that states use their regulatory powers to stop the sale of raw milk from dairy herds identified as infected. But in some states, such actions may not be possible. A few states actually block key regulatory oversight of raw milk operations. Iowa's raw milk law, for instance, explicitly bars the Iowa Department of Agriculture and Land Stewardship from licensing and regulating raw milk dairies.


• The second concern: the health of farm workers. Four US farm workers have tested positive for the virus, three of them this year, but to date the CDC has tested only about 40 people. Calling for a more assertive testing program, Helen Chu, an infectious disease specialist at the University of Washington in Seattle, said of the possibility of H5N1 infections in people, “It’s important to know if this is contained on farms, but we have no information because we aren’t looking.” About 150,000 people work on US dairy farms.
  
  
• In an op-ed in Scientific American on June 12, poultry and dairy veterinarians Kay Russo, Michelle Kromm, and Carol Cardona said, “We believe the dairy industry and regulatory agencies need to move quickly to stop H5N1 from seeding a human epidemic.” Much of the necessary work at this point, they emphasized, must be done by the dairy industry, which despite its historic “fierce individualism,” needs to “put aside cultural and operational differences and start the kind of broad-scale influenza testing and reporting that occurs in the poultry and swine industries.“ They hailed recent USDA actions such as $824 million in new emergency funding to help dairy operators deal with the consequences of infected herds.


• The Pan-Canadian Milk Network has published an updated pre-print of its initial paper confirming once again that no Canadian milk samples have tested positive for H5N1 to date. As of June 3, 2024, all 34 retail milk samples from five Canadian provinces have tested negative. Similarly, the CFIA's ongoing testing has also found no positive samples. According to the Pan-Canadian Milk Network, such sample collection and testing will be ongoing for the foreseeable future.


• The European Commission’s Health Emergency Preparedness and Response Authority announced on June 11 that it has purchased 665,000 avian influenza vaccine doses and has optioned the purchase of an additional 40 million doses over the next four years.


• Canadian officials are in discussion with several pharmaceutical companies about potential agreements to produce an avian flu vaccine. While federal health officials acknowledge that this situation could change in the future, there is currently no vaccine available in Canada.


• On June 4, Finland announced it will begin offering avian flu vaccines to people at risk of exposure, among them poultry farmers, veterinarians, scientists who study the virus, and people who work on fur farms where the virus has devastated populations of farmed mink and foxes.