On July 14, 2016, the House of Representatives passed S.764 creating a National Bioengineered Food Standard. Importantly for food manufacturers and distributors, the law – expected to be signed by President Obama – will preempt all state laws “relating to the labeling or disclosure of whether a food is bioengineered or was developed or produced using bioengineering” if that standard is not identical to the mandatory disclosure under the new federal standard. Once enacted, the law will preempt the Vermont GMO labeling Act that went into effect July 1, 2016.
So what does the new law do? One thing it does not do is amend the Federal Food Drug and Cosmetic Act (“FFDCA”). It is, instead, an amendment to the Agricultural Marketing Act of 1946, 7 U.S.C. 1621, et seq. It does apply to products regulated as foods subject to the FFDCA, as well as meat, egg and poultry products regulated by the United States Department of Agriculture (“USDA”), but only if the most predominant ingredient in the food would be independently subject to the FFDCA labeling requirements or, if a liquid, the second most predominant food would be so subject. It does require a “labeling” disclosure, discussed below, if a food product is bioengineered. It does not apply to “food served in a restaurant or similar retail establishment” nor to “very small food manufacturers”.
The law is not self-implementing. Under the law, the Secretary of USDA has two (2) years to establish a national bioengineered food disclosure standard, and procedures and requirements relating thereto. So the labeling requirement will not go into effect until USDA publishes a final rule containing the standard; however, the preemption of state laws will have immediate effect.
So what foods are subject to the rule? What is a bioengineered food? As noted, it applies to all foods regulated by FDA, including dietary supplements, and food products whose labeling is regulated by USDA. The law will require disclosure that a food product is bioengineered, which means that it:
“(A) that contains genetic material that has been modified through in vitro recombinant deoxyribonucleic acid (DNA) techniques; and
(B) for which the modification could not otherwise be obtained through conventional breeding or found in nature.”
Section 291(1). The law specifies that a food derived from an animal shall not be considered a “bioengineered food” solely because the animal consumed feed produced from, containing, or consisting of a bioengineered substance.” Section 293(b)(2). It also provides that a food may not be considered to be “not bioengineered” or non-GMO solely because it is not subject to the disclosure standard. See Section 294(c). What remains unclear is whether refined products like soy oil, sugar from beets, high fructose corn syrup and other ingredients sourced from GMO crops, but which do not contain genetically modified DNA, proteins or the like will be considered bioengineered or not.
The mandatory disclosure does not require a “labeling” statement. There will not be an actual labeling statement with a disclosure; the information is not required to be on the label or package of the food product itself. Instead, it will require use of a QR or SQUARE code on the label package, scannable by a smartphone electronic or other electronic link by stating only “See here for more food information”. For small manufacturers, the standard is to allow for placing the information on an internet site or making it available by telephone. The information is to appear on the landing page/first product information page in a clear and conspicuous manner, which shall not include marketing or promotional information.
What are penalties/enforcement for non-compliance? The law does give the Secretary of USDA authority to recall a food on the basis of whether the food bears a disclosure that the food is bioengineered. See Section 293(g)(4). It also provides that it will be a prohibited act not to “knowingly fail to make a disclosure” required under the standard. Furthermore, it requires companies to maintain records to establish compliance that are available for inspection and audit.
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We shall advise of further updates on this issue. For any questions, please contact Peter S. Reichertz at preichertz@sheppardmullin.com, 202-747-2933.