CBA Record

Beverage Industry Faces Strict Labeling Regulations By Rikkisha Candler, CBA Food Law Committee H ave you ever wondered about the accuracy of that “All Natural/Non- GMO” claim on the label of your

rent trends in food and beverage labeling claims litigation. Leading the list of trends are lawsuits based on claims that a food or beverage is “All-Natural or “Non-GMO.” Also common are suits based on manu- facturing process claims (“handmade” or “craft beer”), country of origin claims (“made in the USA”), and environmental and “green” claims. Suits based on claims that a product is “gluten-free” are prevalent and can create a greater level of risk for businesses in the beer industry. Panelist Jim Ebel, co-founder of Two Brothers Brewing, provided business perspective by describing his company’s process to ensure compli- ance with applicable court decisions and regulations on gluten-free label claims. The resulting product has an undetectable level of gluten, and is lawfully labeled “crafted to remove gluten.” Hudson also discussed the Federal Trade Commission’s legal review of label- ing claims. The FTC is one of the federal

agencies that has jurisdiction to regulate advertising in the food and beverage indus- try. The FTC has set basic principles for claims substantiation, including a require- ment that advertisers have a reasonable basis for all express and implied claims. Specifically, the reasonable basis must be present for all reasonable interpretations of an advertising claim before the claim is dis- seminated. What constitutes a reasonable basis depends on several factors, including: (1) the type of claim; (2) the product or service being advertised; (3) the conse- quences of a false claim; (4) the benefits of a truthful claim; (5) the cost of developing substantiation for the claim; and (6) the amount of substantiation experts in the field that believe the claim is reasonable. The Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau and the Food and Drug Administration also have overlapping jurisdiction with respect

craft beer? How about the “Made in the USA” claim? Recent growth in the number of class action lawsuits regarding food and beverage related labeling matters indicates similar concerns by other consumers. Recently, the CBA YLS Intellectual Prop- erty Law Committee and the CBA Intel- lectual Property Law Committee hosted a panel discussion onWine, Beer, Spirits and the Law. The discussion provided insight into the legal processes for review and approval of such claims on beverage labels. The panel, which included small business owners and in-house and outside counsel, provided an in-depth review of marketing, advertising and general intellectual prop- erty issues faced by business owners in the beverage industry. Caroline Hudson, attorney at Winston and Strawn, provided an overview of cur-

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