ALCOHOL LAW ADVISOR
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
Food Safety and FDA
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FDA’s Delay of the Menu Labeling Rule Challenged

by | Jun 29, 2017 | ,

Two consumer advocacy groups recently sued the Food and Drug Administration (FDA) for delaying the compliance deadline for the agency’s 2014 menu labeling rule for a fourth time. The menu labeling rule requires menu items offered for sale in restaurants with 20 or more locations to disclose nutritional information and the number of calories in each standard menu item. FDA and Congress previously extended or delayed compliance with the menu labeling rule three times in 2015 and 2016. Before the latest delay, the most recent “compliance date” for the menu labeling rule was May 5, 2017.

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Legal, Political and Practical Challenges in Regulating Recreational Marijuana

by | Apr 5, 2017 | , , , , , ,

On March 30, eight bills were introduced by senior members of Congress from both parties to legalize, regulate and tax marijuana. The bills were referred to at least five House Committees, as they address federal criminal law, taxation, banking, transportation, immigration, veterans’ affairs, access to federal benefits and other issues. The legislative activity follows establishment of the Congressional Cannabis Caucus in February. Leaders of the new caucus represent four of the eight states where voters have approved recreational use of marijuana by adults.

In the initial press conference held by Cannabis Caucus members and in statements explaining the new legislation, House and Senate members made frequent reference to laws regulating alcohol beverages. Bills introduced earlier in the current session of Congress also call for state-by-state regulation using language similar to the Section 2 of the Twenty-first Amendment, which authorized each state to regulate the delivery and use of “intoxicating liquors” within its borders.

The failure of national Prohibition of alcohol beverages is often cited as a rationale to legalize recreational marijuana use. Before proceeding toward wider legalization, policymakers should gain a deeper understanding of the history of Prohibition and the regulatory scheme that emerged after repeal. Government regulation is necessary in a complex and pluralistic society of 320 million, but effective marijuana regulation is a tall order.

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Implications of EU Ingredient Labeling Proposal for US Suppliers

by | Mar 21, 2017 | , , , , ,

On March 13, the European Commission approved a report that calls on members of the alcohol beverage industry to develop a comprehensive self-regulatory system of ingredient and nutritional labeling for beer, wine, and distilled spirits. The Commission is composed of representatives of each member nation of the European Union (EU) with a range of administrative responsibilities and authority to develop and propose legislation for consideration by the European Parliament.

The European Commission characterizes access to ingredient and nutrition information as a right of EU consumers, and called on industry members to develop a self-regulatory proposal over the next year. Current EU policy on alcohol beverage labeling is analogous to US policy. The EU regulation on food labeling exempts alcohol beverages containing more than 1.2 percent alcohol-by-volume.

The European Commission proposal warrants careful attention by US alcohol beverage suppliers across all beverage categories. The initial industry response by European suppliers will likely start a lengthy process leading to new ingredient disclosures.

US regulations are largely based on the presumption that consumers have a working knowledge of ingredients in alcohol beverages. Alcohol & Tobacco Tax & Trade Bureau (TTB) and its predecessor agency considered and rejected mandatory ingredient labeling proposals several times since 1970s. TTB’s most recent assessment of ingredient and nutritional labeling of alcohol beverages was an advance notice of proposed rulemaking published in 2005 soliciting public input on the existing TTB policy. No further rulemaking activity followed the TTB inquiry.

Existing TTB regulations focus on disclosures of certain ingredients that pose unique health risks or allergic reactions. Industry members are permitted to disclose ingredients on a voluntary basis.  A few alcohol beverages are subject to US Food and Drug Administration (FDA) regulations, which require comprehensive ingredient and nutritional labeling.

Many US products are exported for consumption in the EU. If a new system is adopted in the EU, producers in the US must provide ingredient and nutritional information to their customers overseas with no corresponding requirements in their home markets. EU suppliers are major players in the US market and may decide to voluntarily provide the same information to their American customers that they will ultimately have to provide in their home markets.

These dynamics will likely reinvigorate calls by consumer advocacy organizations and government agencies (e.g., Federal Trade Commission, Food and Drug Administration, and National Institutes of Health) in support of ingredient labeling of alcohol beverages in the US. In the current era of dwindling government resources, the European Commission’s call for an industry self-regulatory initiative provides an opening for a similar initiative in the US. Industry members and associations should monitor developments in the EU and consider appropriate responses directly to the EU initiative and to analogous proposals in the US.

An English version of the European Commission proposals is available here.



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President Trump Issues Executive Order Aimed at Reducing Regulation and Controlling Regulatory Costs

by | Feb 13, 2017 | , , , , , ,

On January 30, 2017, President Trump issued Executive Order No. 13771, entitled “Reducing Regulation and Controlling Regulatory Costs.” A link to Executive Oder 13771 appears here.  The Order provides:

  1. For Fiscal Year 2017 (which ends September 30, 2017):
    1. For each new “regulation” published for notice and comment “or otherwise promulgated,” the agency in question must “identify” two existing regulations to be repealed. Notably, the Order does not require the repeal to be concurrent with the publication or promulgation of the new regulation.
    2. For Fiscal Year 2017, each agency must ensure that the total incremental costs of all new and repealed regulations shall not exceed zero, unless otherwise required by law or as consistent with the advice of the Office of Management and Budget (OMB). The Order does not specify whether the costs in question represent costs to the agency, costs to the government or total societal costs. It also does not provide any guidance on how to calculate such costs.
    3. To the extent permitted by law, the costs of any new regulations shall be offset by the elimination of costs associated with at least two existing regulations. Once again, the Order provides no guidance on what constitute costs of a regulation or how to calculate such costs.
    4. The OMB is directed to provide agencies with guidance on how to implement the Order.
  2. Beginning with Fiscal Year 2018 (which begins October 1, 2017):
    1. The semi-annual Unified Regulatory Agenda for each agency must: (i) identify for each new regulation “that increases incremental cost,” two offsetting regulations; and (ii) provide an approximation of the total costs or savings for each new and repealed regulation.
    2. Each regulation approved by the OMB shall be included in the Unified Regulatory Agenda.
    3. Unless otherwise required by law, agencies may not issue new regulations that were not listed in the most recent Unified Regulatory Agenda.
    4. During the budgeting process, the OMB shall notify agencies of the total costs per agency that will be allowed in issuing and repealing new regulations for the upcoming fiscal year.
    5. The OMB shall provide agencies with guidance on implementing the Order’s requirements.

Executive Oder 13771 applies to each “executive department or agency,” but leaves a number of government regulatory functions outside of its scope. These include agencies involved in military, national security, and foreign affairs functions, as well as any government organization arising from the Legislative or Judicial branches. Nevertheless, the Order applies to a vast swath of the federal bureaucracy.

On its face, Executive Order 13771 could have a significant impact on the pace of federal rulemaking during the Trump Administration. The “two-for-one” requirement, in particular, appears to be a blunt instrument aimed at shrinking the Code of Federal Regulations. Moreover, the explicit requirement for cost estimates and “zero” total costs flowing from the rulemaking process plainly seeks to halt the growth and costs of the federal administrative state.

But the jury remains out on the practical impact of Executive Order 13771. Longstanding observers of the federal bureaucracy will, no [...]

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FDA to Redefine “Healthy” Claim for Food Labeling

by | Oct 3, 2016 |

The Food and Drug Administration (FDA) recently took two actions involving the use of the claim “healthy” on food labels. First, FDA opened a docket to solicit comments on whether, and if so how, to revise the criteria that must be meet in order for a food to bear the claim “healthy.” This reflects changes in public health recommendations for various nutrients since FDA first published the criteria for making “healthy” food labeling claims in 1993. For example, FDA’s view of healthy dietary patterns now focuses on food groups and the type of fat rather than the total amount of fat in a food. Food manufacturers can continue to use the term “healthy” on foods that meet the current regulations while FDA further considers any comments submitted.

Second, FDA issued Guidance announcing that it does not intend to enforce certain regulatory requirements for products that use the term “healthy.” Specifically, FDA says it will not take enforcement action against a food that bears the claim “healthy” but which does not meet the regulatory definition of low fat provided that: (1) The amounts of mono- and polyunsaturated fats in the food are declared on the label; and (2) the sums of mono- and polyunsaturated fats are greater than the total saturated fat content of the food. Similarly, FDA will not take enforcement action with respect to the current regulatory requirement that any food bearing a “healthy” claim contain at least 10 percent of the Daily Value (DV) of vitamin A, vitamin C, calcium, iron, protein, or fiber if, instead, the food contains at least 10 percent of the DV of potassium or vitamin D. These two changes reflect the most-recent dietary guidance.  For fat, the recommendations have shifted from limiting total fat intake to encouraging consumption of mono- and polyunsaturated fats. For mineral and vitamin content, potassium and vitamin D are now nutrients of public health concern, while vitamins A and C are no longer nutrients of public health concern.

A copy of FDA’s “Healthy” Guidance is attached here.



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FDA Issues Final Rule on Food Ingredients that May Be Generally Recognized as Safe (GRAS)

by | Aug 17, 2016 |

The US Food and Drug Administration (FDA) has issued this final rule detailing the criteria for concluding that the use of a substance in human or animal food is “generally recognized as safe” (GRAS).  By way of background, if an ingredient is GRAS, food additive petition is not required and FDA does not have to approve the ingredient before it can be used in foods.  FDA has been studying the existing process that currently results in a company conducting the GRAS assessment via a panel of experts and then either proceeding to immediately use the ingredient in foods, or submitting a GRAS affirmation petition to FDA before the ingredient is used in a food.

FDA’s new regulation provides the information FDA believes a company should have to make a GRAS determination or conclusion.  Manufacturers remain free to conduct their own GRAS evaluations and then proceed to incorporate the substance into food.  FDA’s final rule changes what had been a voluntary GRAS affirmation process into a voluntary “notification” process. Under this new process, if a company decides to use the notification process, the company conducts the requisite safety assessment and then prepares a notification submission to the FDA.  The contents of the notification submission are detailed in the regulation.  Once the voluntary notification had been submitted to FDA, the agency is supposed to respond within 180 days, though that can be extended for an additional 90 days (for a total of 270 days) before the substance can be included in a food, assuming FDA does not question the basis for the notifier’s GRAS conclusion.



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DEA Declines to Change Stance on Marijuana but Opens Door to Federally Sanctioned Marijuana Research

by and | Aug 11, 2016 |

On August 11, 2016, the Drug Enforcement Administration (DEA) formally declined to change its position on the medical or recreational use of marijuana, denying two petitions urging the federal government to change marijuana’s drug classification under the Controlled Substances Act. The petitions, filed in 2009 and 2011, urged the DEA to change marijuana’s status as a Schedule I drug—a drug without any accepted medical uses—to a Schedule II drug—a drug with potential medical value but high potential for abuse—or to a drug “in any schedule other than [S]chedule I.” Despite a trend towards decriminalization and legalization on the state level, the DEA’s denial of these petitions indicates the Obama administration has not changed its stance on marijuana.

Twenty-five states currently allow some form of marijuana to be used for medical purposes.  Four state—Alaska, Washington, Oregon, and Colorado—and the District of Columbia allow the recreational use of marijuana for adults. Nevertheless, the DEA, citing an evaluation and scheduling recommendation from the Department of Health and Human Services (HHS), concluded that marijuana “has no accepted medical use in the United States, and lacks an acceptable level of safety for use even under medical supervision.” The Agency ultimately declined to remove marijuana from Schedule I because of its “high potential for abuse,” lack of “currently accepted medical use in treatment in the United States,” and lack of “accepted safety for use under medical supervision.”

The DEA’s Thursday announcements were not uniformly anti-marijuana. Most notably, the Agency also published a policy statement designed to increase the number of entities registered to grow marijuana to supply researchers in the United States. Currently the only registered facility is at the University of Mississippi, which has been the single grower registered to supply medical marijuana research for nearly 50 years. In its policy statement, the DEA gave its full support to expanding research into the “potential medical utility of marijuana.” Based on its discussions with the National Institute of Drug Abuse (NIDA) and the Food and Drug Administration (FDA), the DEA concluded that “the best way to satisfy the current researcher demand” of marijuana “is to increase the number of federally authorized marijuana growers.”  This new policy will allow more people to register with the DEA as marijuana growers.

The DEA on Thursday also signed onto a Statement of Principles on Industrial Hemp published by the Department of Agriculture and the FDA. The Agricultural Act of 2014 legalized the growing and cultivating of industrial hemp for research purposes in states where such activities are legal under state law. Growing and cultivation is limited to institutions of higher education or state departments of agriculture for purposes of agricultural or other academic research. The three federal agencies published the Statement of Principles “to inform the public regarding how Federal law applies to activities involving industrial hemp” so that those hoping to participate in industrial hemp agricultural pilot programs can do so in accordance with federal law.



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FDA Brewery Inspections

by and | Jul 27, 2016 |

Most breweries have numerous deal­ings with the Alcohol and Tobacco Tax and Trade Bureau (TTB) and un­derstand the need to comply with TTB regulations; this includes preparation for TTB audits and inspections. But the TTB is not the only federal agency with the authority to con­duct a brewery inspection.

The Food and Drug Administration (FDA) also inspects food facilities, including breweries, to ensure they comply with FDA regulatory require­ments. The FDA may conduct inspections as the result of routine surveillance, product quality is­sues, consumer complaints, or recalls. The agen­cy also may conduct inspections to follow up on a previous inspection or an FDA enforcement ac­tion. The FDA also contracts with state and local food protection programs to conduct inspections and provide certification and training.

Read the full article, originally published in the July/August 2016 issue of The New Brewer.



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FDA to Hold Public Workshops Addressing Menu Labeling Final Rule

by | Jun 14, 2016 |

The US Food and Drug Administration (FDA) has announced a series of public workshops about menu labeling to help the industry comply with requirements to provide calorie and other nutrition information to consumers. The workshops will address the menu labeling final rule, which require certain chain restaurants and similar retail food establishments to give consumers nutrition information on standard menu items. The compliance date for these requirements is May 5, 2017.

These workshops are to continue FDA’s dialogue with the industry about implementation of the menu labeling final rule and provide additional clarity on the requirements. Interested parties will have the opportunity to discuss specific menu labeling questions and concerns directly with FDA subject matter experts through pre-scheduled one-on-one sessions. (more…)



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FDA Releases Final Guidance Regarding the Food Labeling Term “Evaporated Cane Juice”

by | May 31, 2016 |

The US Food and Drug Administration (FDA) has released final guidance stating its view that sweeteners derived from sugar cane should not be declared in the statement of ingredients as “evaporated cane juice.”  FDA’s view is that the term “evaporated cane juice” is false or misleading because it suggests that the sweetener is fruit or vegetable juice or is made from fruit or vegetable juice, and does not reveal that the ingredient’s basic nature and characterizing properties are those of a sugar.

FDA’s guidance recommends that ingredients currently labeled as “evaporated cane juice” be relabeled to use the term “sugar,” optionally accompanied by a truthful, non-misleading descriptor to distinguish the ingredient from other cane-based sweeteners.  Such a descriptor could be a coined term, and can be used to distinguish the ingredient from white sugar and other sugars by describing characteristics such as source, color, flavor or crystal size.  FDA would expect such a descriptor to appear before the common or usual ingredient name “sugar.”



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