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Product Recalls

Potential product recall situations rank among the most stressful that a producer can face. Things move fast and decisions must be made with less-than-perfect information. While no preparation will render such situations easy or routine, a producer can reduce the stress level and help navigate this “worst-case” scenario by understanding the process and taking certain steps to prepare. The article linked below aims to familiarize producers with the recall processes and situations while suggesting areas where preparation can help.

Read the full article, originally published in the Winter 2015-16 issue of Artisan Spirit Magazine.




Update: FDA Extends Comment Period for Input on Uses of “Natural” in Food and Beverage Labeling

On December 28, 2015, the U.S. Food and Drug Administration (FDA) extended by 90 days the public comment period on the use of the term “natural” in food and beverage labeling.  As discussed in an earlier post, the FDA is interested in receiving comments on the use of the term “natural” for foods that have been genetically engineered or contain ingredients produced using genetic engineering.  In addition to food processing, production and manufacturing methods, the FDA may also consider whether the term “natural” implies any nutritional or health benefit.  The FDA has received over 3,000 comments to date and will accept comments until May 10, 2016.




Raw Materials Compliance

Imagine that you’re waiting for an international hop order to clear customs and you receive a panicked call from your broker. She tells you that the U.S. Food and Drug Administration (FDA) tested the hops for pesticide residues and found some that are not approved for use on hops in the United States. The government will not allow the hops to be imported. What are you to do?

Read the full article, originally published in the November/December 2015 issue of The New Brewer.




FDA Releases Guidance on Voluntary Labeling for Foods Derived from Genetically Engineered Plants

On November 23, 2015, the U.S. Food and Drug Administration (FDA) issued a guidance to assist food and feed manufacturers that would like to label their plant-derived food products or ingredients as produced with or without the use of genetic engineering.  On a voluntary basis, a manufacturer may choose to label its food as produced with or without genetically engineered plants, as long as the labeling is truthful and not misleading.  The FDA identifies acceptable labeling statements including “not bioengineered,” “not genetically engineered,” “our corn growers do not plant bioengineered seeds,” and declarations such as “genetically engineered” or “some of our growers plant soybean seeds that were developed through modern biotechnology to be drought tolerant.”  The guidance contains specific recommendations on the use of the term GMO for genetically modified organism.

The guidance outlines the types of statements that may be false or misleading.  For example, if a label claims that one ingredient was not bioengineered, but is silent as to whether a different ingredient was bioengineered, the label could be misleading.  The FDA may deem misleading claims that no ingredients were genetically engineered, if an ingredient such as salt could not possibly be bioengineered.  If labeling suggests or implies a food is safer, healthier or more nutritious than a food that was not genetically engineered, the FDA will consider such a statement to be false or misleading. Statements about bioengineered ingredients that indicate an ingredient is functionally improved may be misleading if the amount of the ingredient present in the food is not enough to confer the properties claimed on the labeling.

FDA requires substantiation of a manufacturer’s claim that a food or its ingredients is or is not bioengineered.  The guidance lists several methods by which a statement that a food has not been produced using genetic engineering could be substantiated, including documentation of practices and handling procedures or documentation of compliance with U.S. Department of Agriculture organic certification requirements.  Finally, labels of genetically engineered foods must comply with existing FDA requirements on ingredient labeling and misbranding.  For example, if a genetically engineered food has a different nutritional property or contains an allergen that is not present in a non-bioengineered counterpart, the label must disclose the presence of such properties.




FDA Seeks Input on Uses of “Natural” in Food and Beverage Labeling

Earlier this month, the U.S. Food and Drug Administration (FDA) invited public comments on uses of the term “natural” in food and beverage labeling and whether “natural” should apply only to “unprocessed” foods.  The FDA’s definition of “food” includes alcohol beverages.  The FDA’s current policy is not to restrict use of “natural” unless a food has added color, synthetic substances and certain flavors.  The FDA also interprets “natural” to mean that a food does not have anything artificial or synthetic (including colors additives regardless of source) included in, or added to, the food that would not be expected to be in the food.  The U.S. Department of Agriculture (USDA) has a separate policy that defines “natural” with respect to meat and poultry products:  (1) the product does not contain any artificial flavor or flavoring, coloring, ingredient, chemical preservative, or any other artificial or synthetic ingredient and (2) the product and its ingredients are not more than minimally processed.

The agency sought comments in part because the FDA received four citizen petitions on the topic, including one citizen petition requesting consistency across FDA and USDA with respect to the definition of “natural.”  Federal courts also had requested that the agency determine whether food products with certain ingredients–high fructose corn syrup or ingredients produced using genetic engineering–could be labeled “natural.”  The FDA is interested in knowing under what circumstances the use of the term “natural” should be considered false or misleading.  In the notice, the agency indicated it could revise its policy on “natural” to address production practices used in agriculture and food manufacturing processes such as fermenting and pasteurizing.  The FDA has already received over 1,800 comments in less than two weeks.  The docket will remain open until February 10, 2016.




FDA Announces New Menu Labeling Compliance Date

In a Federal Register Final Rule to be published tomorrow (July 10, 2015), the U.S. Food and Drug Administration (FDA) will announce that it has extended by one year (to December 1, 2016) the date by which covered restaurants must comply with FDA’s regulation requiring nutrition labeling of standard menu items.  FDA explains that it took this action in response to several requests for such an extension, and FDA believes it needs additional time to provide the industry with further clarifying guidance to facilitate compliance.

In addition, FDA says it will continue discussions with affected businesses and to answer questions about how the rule applies in particular situations.  To this end, next month FDA plans to issue draft guidance that answers some of the more frequently asked and crosscutting questions that FDA has received.  In accordance with past Agency practice, FDA’s guidance will be a “draft” to reflect FDA’s openness to further public comment and dialogue and to augment the guidance as new questions arise.

FDA also plans to provide educational and technical assistance for affected businesses and for FDA’s state and local regulatory partners to support reasonable and consistent compliance nationwide.  FDA says it is committed to being flexible and to working collaboratively with individual companies making a good faith effort to comply with the menu labeling regulations.




Supreme Court to Decide Important Administrative Law Issue

On December 1, 2014, the United States Supreme Court will hear oral argument in a case that will have significant implications for federal regulatory agencies like the U.S. Food and Drug Administration (FDA) and the Alcohol and Tobacco Tax and Trade Bureau (TTB).

The case is Mortgage Bankers Ass’n v. Harris, 720 F.3d 966 (D.C. Cir. 2013).  In that decision, the United States Court of Appeals for the D.C. Circuit refined a line of cases involving the Administrative Procedures Act (APA).  The APA governs the activities of federal agencies and, among other things, generally requires notice-and-comment rulemaking procedures, including publication in the Federal Register and a period of time for industry and the public to comment on proposed regulations, in order for a federal agency to adopt a new “rule.”  These procedural requirements aim to ensure transparency in governmental operations and a public “vetting” process before an agency adopts new regulatory requirements.

Beginning in the 1990s, the D.C. Circuit – which hears a large percentage of the cases involving challenges to federal agency actions – has held that the notice-and-comment rulemaking requirement extends to agency attempts to change a settled agency interpretation of a regulation.  In other words, once an agency establishes a position on a particular issue, the D.C. Circuit has required that an agency proceed through notice-and-comment procedures to change its earlier position.

In Mortgage Bankers, the D.C. Circuit held that a person challenging an agency change in policy need not show any reliance on that policy in order to claim that an agency had violated that requirement.  The court held that nothing in its prior cases required a showing of reliance.

The Supreme Court has agreed to review the case, see Perez v. Mortgage Bankers Ass’n, No. 13-1041, cert. granted 6/16/14, but on a broader issue than whether a person claiming that an agency changing its interpretation of a regulation must show reliance.  Instead, the court agreed to examine whether a federal agency must engage in notice-and-comment rulemaking before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation.  The court will hear oral argument on December 1, 2014.  Thus, the court may be poised to overrule the entire line of D.C. Circuit cases holding that an agency must engage in notice-and-comment rulemaking before changing definitive but un-codified interpretations of regulations.

A reversal of current D.C. Circuit precedent has troubling implications for the alcohol beverage industry.  Many policies of the federal agencies that regulate the industry become established through informal decisions never reduced to formal regulations.  To take one example, TTB’s policies towards the documentation of exports without payment of tax depart significantly from TTB’s published regulations, and instead rely on well-recognized and followed policies published only in informal Industry Circulars and private letter “variances” from regulations.  Consider, too, the dozens of unpublished “policies” TTB applies in the review of alcohol beverage labels, some of which go back decades and have formed the basis of entire brand propositions by the industry.  Should [...]

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