March 31, 2010
Despite all the publicity over the recently-passed health care legislation, one provision that was “tacked on” received little note but will clearly affect the vast majority of franchise restaurants in the country. Depending on how the FDA interprets the new law, other food outlets such as grocery, convenience stores, vending machine operators and food distributors could be affected as well.
Under the Nutrition Labeling and Education Act amendments enacted in 1990, mandatory nutrition labeling is required for restaurant foods for which nutrition or health related claims are made. The new amendment goes much further by requiring calorie information to be provided for chain restaurant foods, regardless of whether claims are made.
Section 4205 of the Patient Protection and Affordable Care Act amends the Federal Food Drug and Cosmetic Act (FDCA). Specifically, Section 4205 inserts a new subclause (H) into Section 403(q)(5) of the FDCA, 21 U.S.C. § 343(q)(5). Section 403 is titled “Misbranded Food” with clause (q) titled “Nutrition Information.” The new provision requires restaurants and similar retail food establishments with at least 20 or more locations to provide clear and conspicuous information to consumers, including:
- declaring the number of calories each standard menu item provides as it is typically prepared, and
- presenting the required calorie information in terms of suggested caloric intake in the context of an overall diet.
To encourage consumers to consider calories when placing their orders, the new requirement specifies that the caloric information must be adjacent to the name of the standard menu item as it is usually prepared, on the actual menu or menu board, including a drive-through menu board, as well as in written form available on premises upon consumer request. Should the Secretary of Health and Human Services determine that additional disclosures are required in order to keep consumers informed, the new law also allows for the Secretary to require, by regulation, disclosure of additional nutrient information in a written form available on the premises of the restaurant or upon request. Certain food items are excluded from the new provision, including temporary menu items such as seasonal or test market items, daily specials and condiments.
Businesses that own or operate 20 or more vending machines will also be affected. For these businesses, the new law requires that if an article of food sold in a vending machine does not permit a prospective purchaser to examine the Nutrition Facts Panel before purchasing the item or does not otherwise provide visible nutrition information at the point of purchase, the vending machine operator shall provide a sign in close proximity to each article of food or the selection button that includes a clear and conspicuous statement disclosing the number of calories in the article.
Food retailers that have fewer than 20 locations are specifically exempt from the requirements of the new law, however, they can choose to opt in. Businesses not subject to the new requirements can register their location or the location of their vending operations with the Secretary biannually. Within 120 days of enactment, the Secretary is required to publish a Federal Register notice specifying the terms and conditions of the voluntary program, pending promulgation of regulations.
Nutrition disclosure requirements are nothing new for many restaurants. In recent years, various states and localities have adopted nutrition disclosure regulations. The new federal law will preempt some of these requirements and create a national standard for caloric information disclosure. Specifically, the new federal law preempts state and local laws which establish or continue into effect nutrient content disclosures. However, the federal law does not preempt state and local requirements respecting a statement in the labeling of food that provides for a warning concerning the safety of the food or component of the food. Notably, there is no change in the scope of express federal preemption with respect to restaurant foods for which nutrition or health claims are made.
Moreover, the scope of the bill is clear in some respects and unclear in others. As noted above, it applies to “food that is a standard menu item that is offered for sale in a restaurant or similar retail food establishment that is part of a chain with 20 or more locations doing business under the same name…and offering for sale substantially the same menu items…” Clearly, nationwide franchise restaurants with 20 or more locations are covered by this provision. Food sold at a “salad bar, buffet line, cafeteria line, or similar self-service facility, and for self-service beverages or food that is on display and that is visible to customers” and some vending machines are also explicitly covered by this provision, as noted above.
Not so clear is the definition of “or similar retail food establishment”. This could potentially impact a large number of grocery stores with self-service deli and salad bar sections, gas station franchises, or large food distributors who service 20 or more corporate or school cafeterias with the same food products.
In addition, the bill also requires that the restaurants or similar retail food establishments have a reasonable basis for their caloric disclosures, gleaned from nutrient databases, cookbooks, laboratory results, and other reasonable means. Without clear guidance as to methods of calculation and acceptable standards, accuracy likely will vary widely among establishments. Thus far, a survey by the Tufts University researchers found that where calorie content was disclosed in restaurants, actual calories varied significantly when measured and, in many instances, were significantly higher than what was stated.
These issues will need clarification in order to determine the true scope of the law and to carry out its intent of helping consumers make informed decisions about their eating habits and, ultimately, their waist lines.
While the new law takes effect immediately, retailers do not have to take mandatory action until the rules are further clarified. The task of providing clarification falls, of course, to the FDA, who must promulgate proposed regulations to carry out the law within one year. In addition, the Secretary is required to submit a quarterly report describing its progress toward promulgating final regulations to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Energy and Commerce of the House of Representatives. For now, affected retailers may want to follow the rule making process and assess their current nutritional information and menu design so as to be prepared when the final rules are released.
Kelley Drye & Warren LLP
Kelley Drye's team of Food and Drug lawyers strives to integrate our clients' business strategies with FDA compliance and to help resolve regulatory enforcement matters when they arise. Working side-by-side with business development and marketing professionals, we provide comprehensive regulatory counseling and assist in developing products, labels, and promotional materials that achieve our clients' goals without running afoul of regulatory requirements. With close knowledge of FDA's enforcement priorities and deep experience with the FTC's regulation of advertising, our team can provide comprehensive legal advice with an eye towards giving clients a competitive edge.
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Kristi L. Wolff
See 21 C.F.R. § 101.10, e.g., “low fat, this meal provides less than 10 grams of fat.”