MFA NEWS SCAN UPDATE NOVEMBER 24, 2014
- Wednesday, November 26, 2014
FDA ISSUES MENU LABELING FINAL RULE - INCLUDES SOME FOOD STORES
According to the Food Marketing Institute (FMI) and the National Grocers Association (NGA), on Tuesday morning November 25, the FDA issued its final rule on the FDA Chain Restaurant Menu Labeling, which can be found at http://ofr.gov/OFRUpload/OFRData/2014-27833_PI.pdf.
NGA and FMI have prepared an initial analysis of the 350+ page final rule, and are urging companies to determine the impact on their individual operations. They anticipate that they will update their documents as necessary and as additional information becomes available. FDA is expected to issue guidance documents over the coming year as well. The two documents are also attached for your review along with their information on the MFA website.
The final rule seeks to impose food labeling; nutrition labeling of standard menu items in restaurants and similar retail food establishments, including those that are part of a chain with 20 or more locations doing business under the same name and offering for sale substantially the same menu items, effective December 1, 2015, one year from the date of publishing on December 1, 2014 in the Federal Register.
If you have any questions or need additional information please contact NGA, FMI or MFA. For those questions that they aren’t able to answer they will submit to FDA.
REMINDER FOR IMPORTANT INDUSTRY EFFECTIVE DATES
Minimum wage increase - Effective January 1, 2015, the MA minimum wage rises from $8.00/hour to $9.00/hour, according to Chapter 144 of the Acts of 2014;
Unemployment Insurance changes - Effective January 1, 2015, the taxable wage base rises from $14,000 to $15,000, along with a freeze of the experience rating at Schedule “C” for years 2015 - 2017, (presently at “E”), along with other adjustments as contained also in Chapter 144 cited above;
Domestic Violence leave – Already in effect and continuing into 2015 is the law requiring employers with 50 or more employees to provide up to 15 days of leave in any 12-month period to victims of abusive behavior and their family members. The law, Chapter 260 of ’14, also required employers to notify all employees of their rights and responsibilities under this law, which carries stiff penalties for violations. There is no requirement that the leave be paid, and the law specifically provides that employees must exhaust all available leave, such as vacation leave, personal leave, or sick leave, before utilizing the leave provided under this statute unless the employer waives this requirement.
FRAMINGHAM MA BANS TOBACCO SALES UNDER 21
On Monday, November 24 the Framingham, MA Board of Health voted raise the legal age for tobacco purchases to 21. The ordinance goes into effect July 1, 2015. Framingham joins over 30 cities and towns that have now instituted an age increase in the purchase of tobacco products. Please contact the office if you have any questions.
BELOW ARE THE LATEST DOCUMENTS FROM FMI & NGA ON FDA’S PROPOSED RULES CALLING FOR NUTRITION LABELING IN CERTAIN FOOD STORES
November 25, 2014
FDA Releases Final Menu Labeling Regulations
On November 25, the Food and Drug Administration (FDA) released the final rule implementing “Nutrition Labeling of Standard Menu Items at Chain Restaurants,” included as Sec. 4205 of the Affordable Care Act. FMI’s statement may be found here. The rule will be published on December 1, 2014 in the Federal Register and will be effective one-year from that date. The rule does effectively regulate supermarkets as well as supercenters, general merchandise, convenience stores and other non-restaurant establishments under the menu labeling regulations and provides additional guidance on the scope of foods covered, what is considered a “standard menu item” and how calorie information may be displayed for foods that are covered under the rule.
Scope of Covered Establishments: Covered establishment is defined as a restaurant or similar retail food establishment that is a part of a chain with 20 or more locations, doing business under the same name (cooperatives and marketing alliances are not covered) and offering for sale substantially the same menu item. The new labeling requirements only apply to restaurants and similar retail food establishments that offer for sale restaurant-type food. However, there is no percentage threshold, so any establishment with 20 or more locations that sells “restaurant-type” food is regulated under the FDA menu labeling rule. FDA has defined “restaurant type-food” as food that is:
(a) Usually eaten on the premises, while walking away, or soon after arriving at another location; and
a. Served in restaurants or other establishments in which food is served for immediate human consumption or which is sold for sale or use in such establishments; or
b. Processed and prepared primarily in a retail establishment, ready for human consumption, and offered for sale to consumers but not for immediate human consumption in such establishment and which is not offered for sale outside such establishment.
FDA has indicated that cut fruit and vegetables as well as items in the deli case would not be considered “restaurant-type food” because they are generally eaten over a period of time and often require further preparation. Foods that could be eaten over several eating occasions or stored for later use (e.g., loaves of bread, bags or boxes of dinner rolls, whole cakes, and bags or boxes of candy or cookies); foods sold by weight that are not self-serve and are not intended solely for individual consumption (e.g., deli salads sold by unit of weight such as potato salad, chicken salad), either pre-packed or packed upon consumer request; and foods that are usually further prepared before consuming (e.g., deli meats and cheeses) would similarly not be considered “restaurant-type food” and would not be covered under the rule.
Criteria for “Standard Menu Item”: Whether a food item is regulated under the menu labeling law also depends on whether FDA considers it a “standard menu item.” Standard menu item means a restaurant-type food that is routinely included on a menu or menu board or routinely offered as a self-service food or food on display. Seasonal menu items offered for sale as temporary menu items (appears on a menu or menu board for less than a total of 60 days per calendar year), daily specials and condiments for general use typically available on a counter or table are exempt from the labeling requirements.
Establishments selling standard menu items for restaurant-type food or foods on display intended for immediate consumption will be required: (1) to disclose calorie information on menus and menu boards for standard menu items; (2) post a succinct statement concerning suggested daily caloric intake on menus and menu boards; and (3) post on menus and menu boards a statement that written nutrition information is available upon request. Calorie information must be declared on signs adjacent to foods on display and self-serve foods that are standard menu items. There are also very prescriptive requirements related to the posting of calorie information and how information should be displayed depending on the serving size, etc.
FMI will continue reviewing the rule for more details and guidance for FMI members. We will be requesting a meeting with FDA and other Obama Administration officials regarding several aspects and outstanding concerns of the final menu labeling regulations.
As background, FDA released its Proposed Menu Labeling Regulations in April 2011 and sought to have the rule finalized and effective by July 2012. Since that time FMI submitted several detailed sets of comments to FDA and the Obama Administration regarding the extraordinary financial impact and associated operational complexities of menu labeling on the supermarket industry. Members of Congress, led by Rep. Jack Kingston (R-GA), Rep. Cathy McMorris-Rodgers (R-WA), Senator Roy Blunt (R-MO), Senator Angus King (I-ME), and Rep. Loretta Sanchez (D-CA) repeatedly urged FDA to not expand menu labeling to mainstream grocery stores.
We will continue to work with the bipartisan, bicameral co-sponsors of the Common Sense Nutrition Disclosure Act (H.R. 1249/S. 1756). We encourage you—and your store managers—to contact your Members of Congress to voice your concerns with FDA’s menu labeling rule.
For more information please contact FMI’s Regulatory Counsel, Stephanie Barnes at email@example.com or 202-220-0614.
Disclaimer: This guidance is provided by the Food Marketing Institute as a service to its members and does not constitute legal advice. As legal advice must be tailored to the specific circumstances of each case and laws and regulations are frequently changing, nothing provided herein should be used as a substitute for the advice of competent counsel.
Stephanie K. Barnes
FOOD MARKETING INSTITUTE
2345 Crystal Drive, Suite 800
Arlington, VA 22202
Updated: Nov. 25 12:00 PM ET
NOVEMBER 25, 2014 – ARLINGTON, VA – FMI President and CEO Leslie G. Sarasin today released the following statement on the U.S. Food and Drug Administration’s (FDA) decision to include supermarkets in its chain restaurant menu labeling rule:
“FDA used a five-word clause in the 3,000-page Affordable Care Act to expand chain restaurant menu labeling rules to grocery stores.
“Grocery stores already provide an abundance of nutritional information well beyond calories and have done so for decades. They should not be pulled into a menu labeling law and regulation designed for a different industry. In fact, a typical grocery store has 95 percent of food items already labeled with Nutrition Facts, disclosing much more nutritional information beyond calories, and supermarkets have been exemplified through the years as venues where consumers are informed of their nutritional choices. By contrast, a restaurant is not considered ‘similar’ to a food retailer for the myriad of other regulatory requirements imposed on food retailers, including country-of-origin, bioterrorism, and allergen labeling as well as those associated with the Food Safety Modernization Act.
“Members of Congress have repeatedly urged FDA not to expand menu labeling to mainstream grocery stores. FMI supports the bipartisan efforts led by Reps. Cathy McMorris-Rodgers (R-WA), Jack Kingston (R-GA), and Loretta Sanchez (D-CA) and Senators Roy Blunt (R-MO) and Angus King (I-ME) and approximately 100 co-sponsors of the Common Sense Nutrition Disclosure Act (H.R. 1249/S. 1756) to return the menu labeling regulations to the original intent of the law.
Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org.
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FDA Chain Restaurant Menu Labeling
Initial Analysis of Final Rule
November 25, 2014
This is an initial analysis of FDA’s Final Rule that was released on 11/25/2014. The full document of the final rule can be viewed at http://ofr.gov/OFRUpload/OFRData/2014-27833_PI.pdf
Effective December 1, 2015
The FDA has primary enforcement authority under the Food Drug and Cosmetic (FD&C) Act. Failure to comply with the rule will render the food misbranded under sections 201(n), 403(a), 403(f), or 403(q) of the FD&C Act (76 FR 19192 at 19219).
The FDA will make decisions regarding enforcement actions on a case-by-case basis depending on specific facts and circumstances. In the past, FDA has held franchisors or licensors liable for food that is misbranded. If an infraction occurs, FDA will determine if the parent organization sought out and remedied violations and if measures were in place to insure violations do not occur. The FDA will look for documentation of the basis of a covered establishment’s nutrient content disclosures, including recipe and ingredient information. Penalties are assessed on a tiered basis depending on the severity of the violation.
FDA Excerpt "covered establishment [defined] as a restaurant or similar retail food establishment that is a part of a chain with 20 or more locations doing business under the same name (regardless of the type of ownership, e.g., individual franchises) and offering for sale substantially the same menu items, as well as a restaurant or similar retail food establishment that is registered to be covered under section 403(q)(5)(H)(ix) of the FD&C Act. (Emphasis added)”
FDA expanded the covered entities beyond those listed in the proposed rule to now include chain hotel restaurants, movie theaters, and bowling alleys as well as amusement parks and superstores. The final rule now also covers alcohol listed on menus or menu boards.
Co-Ops / Marketing Banners or Groups:
FDA Excerpt: “To be subject to the rule, a cooperative must satisfy all the criteria in the definition of "covered establishment." In other words, to be subject to the rule a cooperative must be a restaurant or similar retail food establishment that sells restaurant-type food and is a part of a chain with 20 or more locations doing business under the same name (regardless of the type of ownership, e.g., individual franchises) and offering for sale substantially the same menu items. As we explain in section VI.D., we are not defining the term "chain" in this rulemaking. In addition, for the reasons we provide in section VI.E., we continue to define doing business under the same name to include names that are slight variations of each other. Independent businesses that are cooperatives, even those that are similarly named, are not covered establishments if, for example, they are only connected insofar as they take advantage of economies of scale when procuring goods and services, or for marketing and advertising purposes, but are not "offering for sale substantially the same menu items."
NGA Analysis: To be covered under this final rule entities must operate 20 or more locations under the same name (regardless of ownership) and offer for sale substantially the same menu items. FDA notes that locations that may have a slight variation in the name (i.e. Smith’s Supermarket or Smith’s Express) , but offer for sale “substantially the same menu items” (in the hot deli or bakery, for example) would still be covered. Slight variations in menu items would still be covered. For example, if a covered chain makes collard greens with smoked turkey at one store, but makes it with smoked pork at another, they would still be covered.
It’s appears from the final rule that FDA has given some flexibility to co-ops, which could also be interpreted as giving flexibility to non-franchise marketing & banner groups (IGA, Harvest Foods, Piggly Wiggly, etc.), which do not offer for sale substantially the same menu items. It’s unclear how this may impact those items which may be offered for sale at all / most locations (i.e. olive bar items, etc.).
Excerpt from Final Rule: “Independent businesses that are cooperatives, even those that are similarly named, are not covered establishments if, for example, they are only connected insofar as they take advantage of economies of scale when procuring goods and services, or for marketing and advertising purposes, but are not "offering for sale substantially the same menu items."
Items Covered Under Final Rule
Final Rule covers items that are like restaurant type foods. FDA identifies covered items as those that will be expected to be eaten on premise, consumed while walking away, or taken to another location for immediate consumption. Items considered for use at a later time would not be covered under the final rule. Certain foods bought from bulk bins or cases (e.g., dried fruit, nuts) and foods sold by weight that are not self-serve and are not intended solely for individual consumption are also not included.
Examples of covered items may include: Hot buffet items, salad bars or full service salad stations, soups, sandwiches (either self-service or full-service / on display), bagels (likely individually sold as opposed to a 6pk of bagels), donuts, or rolls (for individual sale).
The final rule would exclude: condiments, daily specials, temporary menu items, custom orders, foods offered for sale for less than 60 days per calendar year or items for consumer testing available for sale less than 90 days.
FDA Excerpt: “Foods that we therefore would not consider to be within the meaning of "restaurant-type food" include foods to be eaten over several eating occasions or stored for later use (e.g., loaves of bread, bags or boxes of dinner rolls, whole cakes, and bags or boxes of candy or cookies); foods sold by weight that are not self-serve and are not intended solely for individual consumption (e.g., deli salads sold by unit of weight such as potato salad, chicken salad), either pre-packed or packed upon consumer request; and foods that are usually further prepared before consuming (e.g., deli meats and cheeses).”
For covered chain stores the final rule would capture those items which are offered for more than 60 calendar days and include selections offered on your hot buffets, salad bars, custom made or pre-made sandwiches, bakery items such as self-service, individual, bagels, rolls, and donuts. Loaves of bread, whole cakes, boxes of dinner rolls, and bags or boxes of candy or cookies would not be covered. Luncheon meat from a deli is not covered under the final rule as it would be considered foods that would require further preparation. Additionally, foods that are sold by weight and are not self-service, such as full-service deli salads (pre-packaged or prepared upon customer request), would not be covered under the final rule.
Items such as customer requested custom cakes would not be covered nor would those items that may only be available for less than 60 calendar days. This could include special holiday menu items or holiday / special event bakery items.
Conducting Nutritional Analysis
FDA Excerpt: “Regarding costs related to determining nutrition information for standard menu items, we note that this rule also provides flexibility in order to minimize such costs. As discussed in section XVIII, section 403(q)(5)(H)(iv) of the FD&C Act provides that a restaurant or similar retail food establishment must have a reasonable basis for its nutrient content disclosures. As also discussed in section XVIII, this rule provides that a covered establishment can satisfy the requirements of 403(q)(5)(H)(iv) of the FD&C Act by various means, including use of nutrient databases, cookbooks, laboratory methods, and other reasonable means, including the use of Nutrition Facts on labels on packaged foods that comply with the nutrition labeling requirements of section 403(q)(1) of the FD&C Act and § 101.9, FDA nutrient values for raw fruits and 87 vegetables in Appendix C of part 101 (21 CFR part 101), or FDA nutrient values for cooked fish in Appendix D of part 101 (see § 101.11(c)(1)). In addition, this rule provides that a covered establishment can satisfy the requirements of 403(q)(5)(H)(iv) of the FD&C Act by relying on nutrition information for a standard menu item determined by the establishment’s corporate headquarters or parent entity (see § 101.11(c)(3)(i)(F), (c)(3)(iii)(D), and (c)(3)(iv)(D)). In some cases, a corporate headquarters or parent entity could decide to maintain a nutrient database and use it to determine nutrition information for specialty standard menu items offered for sale by one or a few individual establishments in the chain. Therefore, this rule provides flexibility for covered establishments in order to minimize costs while also helping to ensure that calorie and other nutrition information is made available to consumers in a direct and accessible manner to enable consumers to make informed and healthful dietary choices.”
NGA Analysis: NGA had raised with FDA and OMB the cost to conduct nutritional analysis of covered items. FDA appears to provide covered entities some flexibility when determining nutritional analysis to include use of nutrient databases, cookbooks, or nutrition labels on packed foods, among other things. It’s unclear whether this flexibility can be realistically implemented or whether covered entities will still opt to conduct costly chemical analysis of items to ensure regulatory compliance.
Display of Nutrition Information to Consumers
FDA Excerpt: “Some comments may have misinterpreted the proposed rule. We did not propose to require that covered establishments post or otherwise have menu boards. Rather, within this context, we proposed to define the terms "menu" and "menu board," based on the statutory definition at section 403(q)(5)(H)(xi) of the FD&C Act, and to provide direction regarding what information must be disclosed on menus and menu boards for covered establishments that have menus and menu boards. That proposed definition relies on the concept of a primary writing. If an electronic display is the primary writing of the covered establishment from which a customer makes an order selection, it would satisfy our definition of a menu or menu board. As such, electronic menus may be used by covered establishments, and we have retained electronic menus as an example of menus in the definition of menu or menu board in§ 101.11(a).”
NGA Analysis: Regarding the posting of nutritional information for covered entities FDA references the term “primary writing…from which a customer makes an order selection”. This would likely mean that if the customer is making their selection on a hot buffet the caloric information would need to be on the product tag that is identifying the item. Similarly, if available sandwiches are displayed on a menu board the information would need to be provided on that board or if the customer makes their selection electronically the information could be displayed there.
Additional NGA Information and Resources http://www.nationalgrocers.org/industry-issues/food-labeling/fda-menu-labeling
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