FDA Delays Menu Labeling Rule

As mentioned in another article in December, the Food and Drug Administration ("FDA") issued a final rule on food labeling (the "Rule"), as required under the Affordable Care Act, which provides for nutrition labeling of "standard" menu items for chain restaurants with 20 or more locations and "similar retail food establishments." Initially the Rule was to be implemented on December 1, 2015; however, since the Rule was issued numerous chain restaurants, grocery stores, and other covered establishments complained that they may not be able to comply within such time period.  Thus, on July 9, 2015 the FDA responded by announcing that it was extending the compliance date for the Rule to December 1, 2016. 

This is welcome news to the food industry as many businesses have struggled to implement procedures to comply with the Rule. Food businesses will now be afforded additional time to train staff, design new menus, and develop new information systems to assist in efficiently complying with the Rule. The FDA also announced it intends to publish a guide to assist covered establishments in complying with the Rule which is expected to be issued in August 2015.

While the menu labeling rule implementation has been delayed for one more year, it’s important for businesses to start planning for the implementation. If your food or beverage business needs assistance with implementing or interpreting the menu labeling rule, please feel free to contact our attorneys at Morsel Law.

Michigan Craft Brewers Beware: FDA Rule May Impact Your Business

Over the past two years Michigan business owners spent considerable time implementing procedures to comply with the health care requirements under the Affordable Care Act (the “Act”). Just when business owners thought they could turn their attention back to doing what they do best (i.e., running their business), regulators issue new requirements, this time targeting the food and beverage industry.

The FDA’s final rule on food labeling (the “Rule”), as required under the Act, provides for nutrition labeling of “standard” menu items for chain restaurants with 20 or more locations and “similar retail food establishments”. Unlike earlier drafts, the final Rule requires chains to also issue caloric information for alcoholic beverages. While the Rule does not specifically apply to breweries, there may be unintended consequences that impact craft brewers, especially those brewers that sell to chain restaurants. Michigan craft breweries should take notice.

Michigan, ranked fifth in the nation, is home to more than 150 craft breweries. Consumer demand for craft brews continues to grow and many national chain restaurants operating in Michigan already carry local craft beers on their menus. Many restaurants rotate their offerings regularly and list the current beer selection on menu boards. While restaurants are ultimately responsible to collect nutritional information on the items they serve, it is unclear whether restaurants would instead place this burden on brewers.

The FDA has noted that restaurants can utilize nutritional databases in order to determine calorie content on the beers they offer, such as the USDA National Nutrient Database for Standard Reference. According to the database, the calorie count for a “typical beer” is 153 calories per 12 oz. serving. But the problem is craft beers are not “typical”. They are full-flavored concoctions which ingredients vary greatly from one brewery to another. Thus, labeling all craft beers 153-calories would clearly be inaccurate.

Under the Rule, businesses must provide an inspector with information substantiating nutrient values, including the method and data used to derive these nutrient levels. A "responsible individual" for the business must certify that the information contained in the nutrient analysis is complete and accurate. So if a restaurant lists a 350 calorie beer as having that 153-calorie count, they run the risk of violating the Rule, especially if they cannot demonstrate they took reasonable steps to ensure the brewery adhered to the 153-calorie count. Failure to comply with the Rule, or if you don't get it right, the menu item will be deemed "misbranded" which is a misdemeanor under the Food Drug and Cosmetic Act. The FDA retains the discretion to hold those "responsible individuals" who certify the menu labeling, criminally liable for a misbranding violation.

Knowing the risk of a potential misbranding violation could lead to restaurants not accepting the standard reference calorie count, forcing brewers to supply nutritional information. Thus, craft brewers may be faced with a choice: either supply calorie counts or take their products elsewhere. But with rumors circulating that the Alcohol Tax & Trade Bureau (the “TTB”) — which is responsible for approving alcohol labels — could look at its own labeling policies and enforce stricter regulations in the near future, even possibly requiring nutritional information on beer labels, craft brewers may need to consider analyzing their beers now. So in the event the TTB follows the FDA’s lead and implements new labeling requirements, brewers will be prepared and know the caloric content of their products.

Craft brewers have long stressed a “drink better, not more” philosophy, unlike the mass-produced beers who have offered low-calorie light brews for decades, so hopefully consumers won’t be deterred by the calorie counts. It may slow cross-over growth, but it won’t stop the momentum. My prediction: calories or not, craft beers are here to stay.

FDA Releases Menu Labeling Guide for Small Businesses

On December 1, 2014, the Food and Drug Administration (“FDA”) issued a final rule on food labeling, as required under the Affordable Care Act, which provides for nutrition labeling of "standard" menu items for chain restaurants with 20 or more locations and "similar retail food establishments." If you are a restaurant owner the menu labeling rule will most certainly impact on your bottom line. The rule is expected to cost the food industry some $315 million to implement and about $44 million per year after that, according to the FDA’s original cost-benefit analysis. In addition to restaurants, the rule applies to food facilities in entertainment venues, such as movie theaters and amusement parks, take-out food establishments, bakeries, convenience stores, grocery stores and supermarkets.

Several months have now past since the rule was finalized and business owners continue to show frustration with the hundreds of pages of legalese they are forced to navigate in order to prepare their companies for its implementation. Thus, in response to this frustration, the FDA has released a Small Entity Compliance Guide, which is intended to restate the rule's requirements in plain language.

The guide provides detailed guidance on many topics, including: types of establishments covered; how to label menus with nutritional information; how to determine calorie content of foods; and the consequences of misbranding. Most importantly, the guide provides visual examples on how to calculate calories when to toppings change on particular menu items, such as ice cream sundaes and pizza. The guide also discusses the food labeling requirements in great detail, including: labeling requirements for standard menu items; formatting requirements for declaring calories; nutritional information; and requirements for food that is self-service or on display.

The rule is scheduled to go into effect on December 1, 2015, therefore it’s important for businesses to start planning for the implementation. Although the guide was meant to make it easier for small businesses to comply, the rule's requirements for determining caloric content and labeling menus are highly detailed and complicated. Therefore, if your small businesses needs assistance in complying with the rule, please contact us at Morsel Law.

Calories Are Now Criminal

Over the past two years small business owners spent considerable time implementing procedures to comply with the health care requirements under the Affordable Care Act, also known as Obamacare.  Just when these business owners thought they could turn their attention back to doing what they do best, running their business, regulators issue new compliance requirements, this time targeting the food and beverage industry.

The Food and Drug Administration (“FDA”) recently issued a final rule on food labeling, as required under the Affordable Care Act, which provides for nutrition labeling of "standard" menu items for chain restaurants with 20 or more locations and "similar retail food establishments."  If you are a restaurant owner the menu labeling rule will most certainly impact on your bottom line.  The rule is expected to cost the food industry some $315 million to implement and about $44 million per year after that, according to the FDA’s original cost-benefit analysis.  In addition to restaurants, the rule applies to food facilities in entertainment venues, such as movie theaters and amusement parks, take-out food establishments, bakeries, convenience stores, grocery stores and supermarkets.

So what’s required?  Calories must be displayed clearly and conspicuously on menus and menu boards next to the name or price of the item.  Menus and menu boards must also display "2,000 calories a day is used for general nutrition advice, but calorie needs vary." Businesses must provide, upon consumer request, written nutritional information for each menu item.  The rule applies to "standard menu items", including food on display and self-service food, but not daily specials, temporary menu items and condiments for general use typically available on a counter or table.  It is important to note that certain alcoholic beverages listed on menus or menu boards are also included under the rule.

While the cost of compliance will vary for each establishment, non-compliance is criminal.  Criminal you say?  How?  Well, businesses that fail to comply, or don't get it right, will have affected menu items deemed "misbranded" which is a misdemeanor under the Food Drug and Cosmetic Act.  The FDA retains the discretion to hold those with supervisory responsibility, including those who are "responsible individuals" who certify the menu labeling, criminally liable for a misbranding violation.

While the menu labeling rule will most certainly face legal challenges, it’s important for businesses to start planning for the implementation as rule goes into effect on December 1, 2015.  If you need assistance in determining if the menu labeling rule affects your business, please contact our attorneys at Morsel Law.

Calories...Ready or Not, Here They Are!

On Tuesday, the FDA announced sweeping rules that will require chain restaurants, movies theaters, pizza parlors, vending machines, amusement parks, convenience stores, bakeries and the prepared foods sold inside many grocery stores across the country to post calorie counts on their menus. The menu labeling final rules go into effect one year from now and applies to restaurants and retail food establishments if they are part of a chain of 20 or more locations, doing business under the same name and offering for sale substantially the same menu items.

If you are a small business owner these new rules will have a significant impact on your operations. What it means is that calorie counts will have to be displayed for popcorn at a theater, food from a salad bar, hot dogs from a convenience store and takeout pizza. In addition, vending-machine operators with at least 20 locations also will be required to post calorie counts.

Calorie information also will be required for some alcoholic beverages served in bars and restaurants. This would apply to beverages listed on menus and menu boards, however, this would not apply to mixed drinks ordered at the bar. Craft brewers should take notice. Even if the rules may not directly affect beer manufacturers, those that sell their brews to chain retailers may be forced to supply calorie counts or take their products elsewhere.

While the purpose behind these rules are to combat obesity in America, where over one-third of meals are consumed outside the home, the effect is to burden retailers with significant compliance costs. Retailers are now faced with the choice of passing this additional cost onto the consumer or eliminating certain products from their menus. While not an easy decision for businesses to make, non-compliance can lead to legal action by the FDA.

If you need assistance to determine the affect of the FDA rules on your business, please feel free to contact our attorneys at Morsel Law.