Food and Beverage News and Trends - September 20, 2024

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

FDA invites public to take part in meeting about its emerging systematic process for post-market assessment of chemicals in food. The FDA is developing a systematic process for conducting post-market assessments of chemicals in food, such as color additives, food contact substances, additives, and GRAS ingredients. On September 25, the agency will hold a public meeting from 12:30 PM – 4:30 PM ET to talk about its process and to hear stakeholder perspectives on this work so far. The meeting will be hybrid, with limited in-person capacity. Submit advance comments and register for the meeting here.

China announces anti-dumping investigation into Canadian canola imports. China, the world’s biggest importer of oilseeds, has announced it is opening an anti-dumping investigation into canola oil imports from Canada. In 2023, China imported CAD$3.8 billion of canola and related rapeseed products – 94 percent of the total volume of such imports. The investigation – which alleges that China’s domestic rapeseed industry has been harmed by unfair Canadian competition – commences immediately, covering a dumping investigation period from January 1, 2023 to December 31, 2023 and an industry injury investigation period from January 1, 2021 to December 31, 2023. China’s domestic rapeseed meal futures rose 6 percent following the announcement of the investigation.

SEC fines Keurig. Keurig Dr Pepper Inc., manufacturer of single-serve coffee systems, will pay the SEC a $1.5 million civil penalty to settle SEC charges that the company made misleading claims about the recyclability of its plastic K-Cup pods in its annual reports on Form 10-K. The pods “can be effectively recycled,” Keurig said in its 2019 and 2020 filings. However, in its September 10 press release, the SEC stated that “Keurig did not disclose that two of the largest recycling companies in the United States had expressed significant concerns to Keurig regarding the commercial feasibility of curbside recycling of K-Cup pods at that time and indicated that they did not presently intend to accept them for recycling.” Since 2020, Keurig has disclosed that its pods, now made of #5 plastic, have been fully recyclable; a note on its packaging, however, explains that the pods are “not recycled in many communities.” While the amount of the fine is small, it signals that financial regulators may be increasingly focusing on disclosures relating to a company’s environmental and sustainability claims that may have an impact on shareholder value. Keurig has agreed to pay the fine without admitting or denying the agency’s findings.

Virtual NIH-FDA Nutrition Regulatory Science workshop coming in December. The National Institutes of Health and FDA will hold a two-day workshop in December to discuss how nutrition science can generate data to inform food-related policy and regulatory decision, and to foster closer collaboration between NIH and FDA in research that addresses priority nutrition research gaps. The public is invited to attend this virtual workshop, taking place December 17-18. Find out more about the workshop here and register here.

Canada announces restrictions on the Temporary Foreign Worker Program. Canada’s Temporary Foreign Worker (TFW) Program was created to fill vacancies in jobs that cannot be filled by Canadians – but, at a time when the Canadian unemployment rate has risen to 6.4 percent, the Government of Canada has concluded that the program is being used to circumvent hiring qualified Canadians. To reduce the reliance of Canadian employers on the TFW Program, the government announced that, starting September 26, it will no longer process Labour Market Impact Assessments (LMIAs) for workers in the Low-Wage Stream in census metropolitan areas with an unemployment rate of 6 percent or higher. Additionally, employers will only be allowed to hire no more than 10 percent of their total workforce through the TFW Program, and the maximum duration of employment for workers hired through the Low-Wage Stream will be reduced to one year. Exceptions to the above new rules will be granted for seasonal and non-seasonal jobs in food security sectors (including primary agriculture, food processing, and fish processing), as well as in construction and healthcare. Randy Boissonnault, Minister of Employment, Workforce Development and Official Languages, stated, “The Temporary Foreign Worker program was designed to address labour market shortages when qualified Canadians were not able to fill those roles. Right now, we know that there are more Canadians qualified to fill open positions. The changes we are making today will prioritize Canadians workers and ensure Canadians can trust the program is meeting the needs of our economy.” 

FDA says it is working closely with industry on traceability rule. In a September 4 constituent update, FDA updated the food industry and the public on its recent actions to implement the Food Traceability Rule, a key component of the Food Safety Modernization Act. The rule, when fully implemented, will greatly enhance public health by facilitating faster identification and rapid removal of potentially contaminated food from the market. The FDA said that while it has heard broad support for the rule and its benefits, “we have also heard a number of concerns from industry about how we get there.” The agency said that it has worked with the Reagan-Udall Foundation to host three roundtable discussions on the rule. The participants were carefully chosen through interviews with major trade associations and firms that have been actively implementing the rule, ensuring a diverse representation of commodity types, firm sizes, and roles within the supply chain, the FDA said.

Health Canada provides additional information for specific ingredients in food and supplemented foods. Prior to the July 2022 Regulations amending the Food and Drug Regulations (referred to as the Supplemented Food Regulations), Health Canada could issue temporary marketing authorizations for certain individual products that weren’t approved under the existing provisions. These authorizations allowed sales of such products based on product-specific assessments that considered the use of ingredients in accordance with established conditions or existing provisions in the Food and Drug Regulations. Health Canada has now published a Table setting out information to clarify the general use of those ingredients that were only permitted on a product-specific basis. The Table considers the use of these ingredients as conventional food ingredients, including in supplemented foods, and as food additives or flavorings. It also explains any data gaps that exist to establish certain ingredients’ safety as a supplemental ingredient by referring to the relevant published decision by Health Canada’s Food and Nutrition Directorate.

Congress members seek USDA delay on proposed rule regarding salmonella in raw poultry. On September 3, Representatives Steve Womack (R-AR) and Jim Costa (D-CA), co-chairs of the Congressional Chicken Caucus – a formal group whose mission is to educate other senators and staff about issues facing the US chicken industry – sent a letter to the USDA seeking a 180-day extension for the agency’s proposed new rule on salmonella in raw poultry products. “Given the complexity and length of the proposed rule and the fact that nearly all chicken marketed in the United States will be impacted, we believe it is essential to provide affected integrators and producers with additional time to offer thorough and meaningful feedback,” the letter said. Under the proposed rule, issued July 29, raw chicken and turkey products containing certain salmonella serotypes and levels would be considered adulterated within the meaning of the Poultry Products Inspection Act. See our earlier coverage of this story here.

Factory was “imminent threat” to health. USDA inspectors were warning at least two years ago that the Boar’s Head plant in Jarrett, Virginia posted an “imminent threat” to health, the New York Times reported on September 10. That plant is now regarded as the source of a listeria outbreak that has led to at least 57 hospitalizations and nine deaths in 18 states since the CSC initially reported it on July 19. Inspection reports variously detailed such problems as rusted equipment, product buildup, live insects, green mold, and dripping condensation. The company was informed of these problems and told to take corrective action, the Times reported, but made no changes. In late July this year, the USDA suspended the Virginia factory’s operation. On September 13, Boar’s Head announced it will “indefinitely” close the Virginia plant and will permanently discontinue sales of its liverwurst, which investigators say is implicated in the listeria contamination. Boar’s Head announced it will implement a food safety program, bring on board a new food safety officer, and create an advisory food safety council composed of independent industry experts, among them former FDA and USDA officials. At this writing, the company faces at least seven lawsuits following the August recall of millions of pounds of its deli meat.

EPA moves to dismiss a PFAS case. The EPA has filed a motion to dismiss a lawsuit brought by a group of Texas farmers and ranchers who want the agency to identify and regulate several per- and polyfluouroalkyl (PFAS) chemicals in biosolids – popularly nicknamed sludge – under its Clean Water Act authority. The plaintiffs allege that their health, land, and livestock have been substantially harmed by PFAS-contaminated sludge. They hope to compel the agency to add 18 PFAS chemicals to its biannual list of pollutants of concern in sewage sludge and to require it to place limits on the presence of 11 PFAS chemicals in such biosolids. In its September 9 motion to dismiss, the EPA argued that its duties in this area are discretionary – it is not required to add any newly identified chemicals to its biannual list, nor to set limits on the listed pollutants. The case is James Farmer et al v. EPA.

Probe of Diamond Shruumz products continues. On September 5, the CDC issued its latest findings in the investigations into microdosing edibles bearing the Diamond Shruumz label. Diamond Shruumz brand infused cones, chocolate bars, and gummies were recalled in early June, and the FDA warned in July that many of these products were still on shelves of smoke shops and vape shops across the country. The CDC report, Severe Illness Potentially Associated with Consuming Diamond Shruumz Brand Chocolate Bars, Cones, and Gummies, notes that as of August 30, 158 total illnesses, including 63 hospitalizations, have been linked to consumption of Diamond Shruumz products in 32 US states. FDA has reported that the edibles have been linked to an array of symptoms, such as seizures, nausea, abnormal heart rates, and respiratory failure and that “multiple children” are among those who fell ill after consuming the brand’s microdosing edibles. The CDC also notes two “potentially associated” deaths. The FDA has identified a number of psychoactives and other substances in various Diamond Shuumz product – most recently, two chemicals derived from Amanita muscaria mushrooms – ibotenic acid and muscimol – as well as Pregabalin, a prescription drug used to treat nerve pain.

New York City mayor signs Sweet Truth Act. On September 13, New York City Mayor Eric Adams signed into law the Sweet Truth Act, a first-in-the-nation law requiring restaurants with 15 or more locations nationwide to display clear, visible "added sugar" warnings for food and drinks that contain at least 50 grams of added sugar. The act, which goes into effect next month, mandates that establishments display a factual warning statement about the sugar content of such products, as well as a small spoon-shaped icon, on menus, menu boards, at the register, and in self-service food areas such as soda dispensers. The Sweet Truth Act joins earlier New York City laws banning use of trans fats in all city-wide restaurants, forbidding smoking in bars, restaurants, and most workplaces, and requiring sodium warning labels on some restaurant menus.

New Jersey restricts sales of hemp products. On September 13, New Jersey Governor Phil Murphy signed SB 252, a law that makes it illegal to sell products with any detectable amount of THC to anyone younger than 21. It also temporarily bans New Jersey businesses without a cannabis license from selling beverages and other products containing hemp. The law was passed amid rising concern in New Jersey that children can easily purchase products – and in particular, beverages, which are widely sold in outlets such as gas stations and convenience stores – that are openly advertised as containing THC, one of the intoxicants in cannabis. Under SB 235, hemp products will be overseen by the state’s Cannabis Regulatory Commission (CRC), which already regulates New Jersey’s recreational and medicinal marijuana markets. Governor Murphy described SB 252 as “flawed,” but said it had become necessary because “the status quo poses an immediate risk to health and safety, as these unregulated intoxicating hemp products are widely available to minors.” With the bill’s signing, New Jersey businesses without cannabis licenses have 30 days to remove hemp products from their shelves until the CRC has set out new rules for their sales.

Canadian Grain Commission compensates producer claims for unpaid deliveries to Zeghers Seed Inc. The Canadian Grain Commission recently announced that grain producers who were not paid for grain delivered to Zeghers Seed Inc. this year will be fully compensated for their eligible claims through the Safeguards for Grain Farmers Program. In March, the Commission revoked the grain dealer and primary elevator license of Manitoba grain company Zeghers Seed Inc., when the company was unable to maintain the required security to backstop its operations. The Safeguards for Grains Program uses a company’s security to pay grain farmers when a licensed grain company fails to pay them if the claim is eligible. The Commission has issued $1.2 million in compensation for 27 eligible claims from grain producers from the $3 million in Zeghers’ posted security.

CSPI argues for folic acid fortification in corn masa flour. In a September 12 statement, the nonprofit Center for Science in the Public Interest called on the FDA to require the addition of folic acid to corn masa flour. The consumption of folic acid during pregnancy reduces the chance of having a baby with certain birth defects, and the CSPI calls folic acid fortification “one of the greatest public health achievements of our time” that has prevented many babies from being born with birth defects. The FDA has traditionally used staple foods like wheat flour, bread, and pasta to boost folic acid intakes, and, in 1996, added folic acid to the list of substances that companies must add to “enriched” bread, pasta, rice, grits, flour, and more. However, it has only permitted, rather than required, folic acid to be added to corn masa flour. The CSPI said that since rates of these birth defects are still higher in the Latino community, a fortification requirement could save lives.

Avian flu update.

• On September 6, the CDC reported another human case of H5N1 avian influenza – but, this time, it is not yet clear how the patient, a resident of Missouri, contracted the virus. The 13 other human cases of H5N1 all were farmworkers who had been exposed to infected poultry or dairy cows. On September 13, CDC stated that one close contact of the patient, living in the same household, “was also ill at the same time, was not tested, and has since recovered.” Missouri health officials’ investigation into a possible source of infection is ongoing.


• The avian flu has spread to three more California dairy operations in the Central Valley, the USDA said on September 16. The virus has now been detected in eight herds in the Central Valley. The most recent statistics from the CDC report that 206 dairy herds in 14 states have been infected with the virus.


• The price of eggs is once again becoming volatile as H5N1 ravages ever more egg-laying operations across the US. In August, a dozen Grade A large eggs cost an average of $3.20, according to the US Bureau of Labor Statistics – 4.8 percent higher than in July this year and 28.1 percent higher than in August 2023. Between March 2016 and February 2022, when H5N1 began to wreak havoc on US flocks, the average price of a dozen eggs typically remained under $2. According to the CDC, more than 100 million birds, most of them chickens, have been culled since then.