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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
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-
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
CBA RECORD
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