Regulatory Issues

EU Parliament Clamps Down on Environmental Marketing Claims

Published March 12, 2024

The European Union Parliament has adopted its position on establishing a verification and pre-approval system for environmental marketing claims to protect citizens from misleading ads:

Companies should submit environmental marketing claims like “biodegradable” or “less polluting” for verification before being allowed to use them
Simpler and common types of claims should benefit from easier or faster verification
Penalties include exclusion from procurement processes, confiscation of revenues, and a fine of at least 4% of annual turnover

The green claims directive would oblige companies to submit evidence about their environmental marketing claims before advertising products as “biodegradable”, “less polluting”, “water saving” or having “bio based content”. EU countries would have to assign verifiers to pre-approve the use of such claims, to protect buyers from unfounded and ambiguous advertising.

“Studies show that over 50 percent of environmental claims are vague, misleading or unfounded,” said Internal Market Committee rapporteur Andrus Ansip (Renew, EE) . “We cannot speak about happy consumers if every other green claim is false. We cannot talk about a level playing field for our entrepreneurs while some traders are cheating. I believe the Green Claims Directive adopted today is balanced – it will bring clarity to our consumers and is less burdensome for traders than the claim-by-claim verification.”

“It is time to put an end to greenwashing. Our position ends the proliferation of misleading green claims that have deceived consumers for far too long,” said Environment Committee rapporteur Cyrus Engerer (S&D, MT). “We will ensure businesses have the right tools to embrace genuine sustainability practices. European consumers want to make sustainable choices; all those offering products or services must guarantee their green claims are scientifically verified.”

Parliament wants claims and their evidence to be assessed within 30 days, but simpler claims and products could benefit from quicker or easier verification. Micro enterprises would not be covered by the new rules, and SMEs would have an extra year to be in compliance compared to larger businesses. Companies that break the rules may face penalties, for example they could be temporarily excluded from public procurement tenders, lose their revenues and face fines of at least at 4% of their annual turnover.

Green claims based solely on carbon offsetting schemes will remain banned. Companies could, however, mention offsetting and carbon removal schemes in their ads if they have already reduced their emissions as much as possible and use these schemes for residual emissions only. The carbon credits of the schemes must be certified and be of high integrity, such as those established under the Carbon Removals Certification Framework.

Parliament also decided that green claims about products containing hazardous substances should remain possible for now, but the Commission should assess in the near future whether they should be banned entirely.

Parliament adopted its first reading position with 467 votes to 65 and 74 abstentions. The file will now have to be followed up by the new Parliament after the European elections that will take place in from 6 – 9 June 2024.

In adopting this report, Parliament is responding to citizens’ expectations for the EU to introduce transparent labeling for all products regarding their sustainability and environmental footprint, and to raise awareness among both companies and citizens on how to behave in a more sustainable manner, as expressed in proposals 5(1) and 11(8) of the conclusions of the Conference on the Future of Europe.

For more news of interest to the specialty food industry, subscribe to Gourmet News.

FDA Seeks $7.2B in U.S. Budget for Food Safety, Support Supply Chain

Published March 11, 2024

The U.S. Food and Drug Administration is requesting $7.2 billion as part of the president’s fiscal year 2025 proposed budget. This funding will allow the agency to enhance food safety and nutrition, advance medical product safety, help support supply chain resiliency, strengthen the agency’s public-health and mission-support capacity, and modernize the FDA’s infrastructure and facilities. The request includes an increase of $495 million—or 7.4 percent above the FY 2023 funding level. The FDA’s request reflects the agency’s top priorities in key areas of importance for human and animal health.

“The FDA continues to protect the health and well-being of millions of people,” said FDA Commissioner Robert M. Califf, M.D. “This new funding request will help us build on our accomplishments and also modernize our agency and operations as we plan for the future. Our request for critical investments will help us address our most urgent priorities, strengthen our public health capacity, advance IT capabilities, and improve agency-wide infrastructure. The budget will also support the FDA’s ability to prepare for, build resilience to, and respond to shortages, support the implementation of expanded cosmetics regulation, and protect and promote a safe, nutritious U.S. food supply.”

The FY 2025 request, which covers the period from Oct. 1 through Sept. 30, 2025, includes new efforts for high-priority program areas. Highlights of the agency’s request include:

Enhancing Food Safety and Nutrition

$15 million to protect and promote a safe, nutritious U.S. food supply. Funds for the FDA’s human foods initiatives will modernize the FDA’s capacity to prevent or mitigate foodborne illness outbreaks by investing in necessary tools and processes to strengthen root-cause investigations. The budget request also supports the FDA in addressing the enormous public health burden of diet-related chronic diseases and the goals of the President’s National Strategy for Hunger, Nutrition, and Health.

Shortages and Supply Chain

$12.3 million to address supply-chain disruptions and support supply chain resiliency. Through an agency-wide crosscutting initiative, the FDA will advance its capabilities to help prepare for, build resilience to, and respond to shortages through improved analytics and regulatory approaches. Among other initiatives, the agency will hire additional investigators to fulfill inspectional needs associated with increased supply-chain disruptions and consequent human food and medical product shortages in recent years. The agency will also continue promoting manufacturing quality across the pharmaceutical industry and developing and implementing modernized systems to respond to shortages more quickly.

Infrastructure, Buildings, and Facilities

$43.6 million to ensure optimal functioning of the FDA’s offices and labs. Funding will allow the FDA personnel at facilities across the country to carry out its mission, including to evaluate food safety and medical products, continue to expand laboratory operations supporting inspections at points of entry to reduce the flow of adulterated and illicit imported products, and respond to emergencies. Optimally functioning facilities provide secure, modern, reliable, and cost-effective office and laboratory space that empowers the FDA’s workforce to protect and promote the safety and the public health.

To complement the funding requests, the agency’s budget proposal also includes a package of legislative proposals designed to better support agency efforts to protect American consumers and patients. Notable proposals include efforts to:

Enhance supply-chain resiliency for drugs, medical devices and foods, including with respect to addressing supply disruptions.
Provide new authorities to help ensure the safety of foods, including infant formula, medical foods and foods marketed for infants and young children, which includes new authority to set binding contaminant limits by administrative order, requirements for contaminant testing of final products, more frequent environmental monitoring for pathogens in certain facilities, and mandatory reporting when certain products test positive for pathogens.
Support innovation and competition, such as creating a new regulatory category of animal food additives to facilitate marketing of innovative animal food products, as noted in the agency’s Animal and Veterinary Innovation Agenda.
Provide additional oversight tools, such as expanding authorities for information-sharing with states, broadening authority to request records or other information in advance of or in lieu of inspections to all FDA-regulated commodities, and requiring importers to destroy products that present a significant public health concern.
Provide the FDA with additional authorities to increase oversight of dietary supplements to better protect consumers from dangerous and otherwise illegal products on the market.

For more news of interest to the food and beverage industry, subscribe to Gourmet News.

USDA Finalizes Voluntary ‘Product of USA’ Label Claim

Published March 11, 2024

On March 11, at the National Farmers Union Annual Convention, U.S. Department of Agriculture Secretary Tom Vilsack announced the finalization of a rule to align the voluntary “Product of USA” label claim with consumer understanding of what the claim means. Vilsack also announced USDA is awarding $9.5 million to 42 projects through the Local Meat Capacity grant program to expand processing options for the meat and poultry industry and new actions to ensure transparency and a fair and competitive market in the U.S seed industry.

“Today’s announcement is a vital step toward consumer protection and builds on the Biden-Harris Administration’s work to bolster trust and fairness in the marketplace where smaller processors can compete,” said Vilsack. “This final rule will ensure that when consumers see ‘Product of USA’ they can trust the authenticity of that label and know that every step involved, from birth to processing, was done here in America.”

“In addition, the Local Meat Capacity grants are addressing critical processing infrastructure needs for local and regional livestock and poultry producers, ensuring their products get to market efficiently and cost effectively, which supports local economies, new jobs, and more choices for consumers,” Vilsack added. “USDA is also committed to boosting the farmer’s voice in our seed patent system and enforcing the disclosure laws on the books as we deliver more and better choices for farmers.”

These actions build on President Biden’s Executive Order on Promoting Competition in the American Economy and the Biden-Harris Administration’s Action Plan for a Fairer, More Competitive, and More Resilient Meat and Poultry Supply Chain. They complement a series of other all-encompassing actions by USDA to increase competition in agricultural markets, create a fairer playing field for small- and mid-size farmers, lower grocery costs for consumers, and strengthen local and regional food systems.

“Product of USA” Final Rule

USDA’s final “Product of USA” rule allows the voluntary “Product of USA” or “Made in the USA” label claim to be used on meat, poultry and egg products only when they are derived from animals born, raised, slaughtered and processed in the United States. The rule will prohibit misleading U.S. origin labeling in the market, and help ensure that the information that consumers receive about where their food comes from is truthful.

USDA’s final “Product of USA” rule is supported by petitions, thousands of comments from stakeholders, and data from a nationwide consumer survey.

Under the final rule, the “Product of USA” or “Made in the USA” label claim will continue to be voluntary. It will also remain eligible for generic label approval, meaning it would not need to be pre-approved by USDA’s Food Safety and Inspection Service before it can be used on regulated product, but would require the establishment to maintain documentation on file to support the claim. The final rule also allows the use of other voluntary U.S. origin claims on meat, poultry and egg products sold in the marketplace. These claims will need to include a description on the package of the preparation and processing steps that occurred in the United States upon which the claim is made.

USDA has also published an updated labeling guidance on the use of voluntary U.S.-origin label claims to provide examples of claims and the types of documentation that establishments may maintain to support use of the claims. The guidance will be open for public comment for 60 days after publishing in the Federal Register. Public comments can be submitted at www.regulations.gov.

Establishments voluntarily using a claim subject to the final rule will need to comply with the new regulatory requirements by January 1, 2026, and are encouraged to do so as soon as practicable after the publication of this final rule.

Local Meat Capacity Grant Program

USDA is also awarding $9.5 million to 42 projects through the Local Meat Capacity grant program. This initial set of awards through Local MCap is for Simplified Equipment Only projects.

In April 2023, USDA announced up to $75 million available for Local MCap to fund innovative projects designed to build resilience in the meat and poultry supply chain by providing producers with more local processing options and strengthening their market potential. This is part of a larger, $1 billion commitment to expand independent meat and poultry processing capacity and give farmers additional, local options to obtain fairer prices for the animals they raise and give consumers more options in the marketplace. The Local MCap grant program is targeted to support meat and poultry processors with smaller-scale projects, with a goal to increase processing availability and variety for local and regional livestock producers. The program is administered by the Agricultural Marketing Service with funding from President Biden’s American Rescue Plan.

AMS has entered into a cooperative agreement with the New Hampshire Community Loan Fund to execute and administer Local MCap awards. NHCLF is responsible for making grant awards and administering grant funds.

USDA will announce additional awards for both Equipment and Processing Expansion Local MCap grants at a later date.

USDA is announcing this first set of awards for simplified equipment projects in 27 states and Puerto Rico. This set of awards fund projects from $10,000 to $250,000 to purchase processing equipment such as meat grinders, stuffers, and smokers. For example:

Yoder’s Butcher Barn, a Maryland-based livestock processing business, is owned and operated by third-generation butchers and specializes in livestock slaughter services for its community. They will use Local MCap grant funds to purchase a new smokehouse, linker, mixer-grinder, patty machine, and saws to double their weekly beef and pork capacity. In addition to improving processing efficiency, this project will create three to four new jobs and facilitate livestock sourcing from an additional 28 farmers.
Nordik Meats is a small, independently owned meat processing facility in Southwest Wisconsin. Through Local MCap, Nordik Meats will purchase a grinder, meatball maker, and packaging equipment. This equipment will provide local producers with the ability to create new value-added products for local consumers, maximize the value of their animals, utilize byproducts, and increase animal harvest. Nordik Meats will increase the number of livestock processed annually by 100% over two years, implement new processing technologies, train 12 existing staff, hire four new employees, and benefit 350 local small family farms.

For more information, on Local MCap and to view a complete list of the awarded projects visit the AMS Local MCap webpage.

Farmer Seed Liaison Initiative

USDA is taking new actions to enhance transparency and competition in the U.S. seed industry through its Farmer Seed Liaison Initiative, which aims to elevate the voices of farmers, small- and mid-size seed companies, and independent plant breeders in policy and decision-making processes to improve competition, choice, and fairness in the seed marketplace.

Today, AMS announced it will be launching a nationwide Website Monitoring Program focused on Federal Seed Act brand and variety name compliance. Key to the monitoring efforts, regulatory specialists are conducting in-depth reviews of websites, including links to scanned pamphlets and PDFs, that advertise Federal Seed Act-regulated seeds. AMS will approach these reviews and any subsequent enforcement using a risk-based approach that considers the impact and reach of the violation and the efforts of those responsible for the website to make the information compliant. These efforts are the next steps in USDA’s initiative to boost variety transparency to the farmer at the point of sale and follow on the letters that USDA sent to the executives of the largest seed companies in November. Additionally, USDA will increase outreach efforts, including a webinar to further educate producers about labeling requirements and participation in industry meetings. The agency produced a similar webinar with the American Seed Trade Association.

For more information on the Farmer Seed Liaison Initiative, visit the USDA Seed Liaison webpage.

For more news of interest to the specialty food industry, subscribe to Gourmet News.