Canadian Food Business
Welcome back to the Regulatory Arena and the second edition on the Clean Label. In our last installment, we introduced and explored the definition and set the stage for upcoming discussions. In this issue, we consider some of the differences in the treatment of the clean label in Canada and the U.S.
As we all know, the food industry is global and as a result, manufacturers need to consider multiple regulatory requirements, cultures and litigation risks when formulating and in marketing strategies. Given the popularity of the clean label among consumers, and the regulatory guidance (or lack thereof) offered by Health Canada and the FDA, preparing clean label foods for the two markets can be tricky. Throw in an active U.S. plaintiff bar and things can get downright scary.
Using the “natural” claim as an example, in this edition of the Regulatory Arena we highlight some of the key differences in the impact of the clean label trend on manufacturers in the two jurisdictions.
But first… a quick update on the Safe Food for Canadians Act: in April, the CFIA announced that it is seeking feedback from micro and small businesses on options that could reduce the burden associated with some of the requirements being considered in connection with the Regulations under the SFCA. This consultation is open until June 30. In addition, a draft summary of proposed regulatory texts and an overview of the Agency’s progress-to-date was released.
What is “Natural” in Canada and the U.S.
In the last edition of the Regulatory Arena we noted some of the key hot topics most often associated with the clean labelling movement. Among other things, today’s clean label consumers are particularly interested in products that are “all natural”.
“Natural” is not defined by regulation in either Canada or the U.S. The CFIA has advised that, at a minimum, it expects food represented as natural to have nothing added (no added vitamins, minerals, artificial flavours or additives), nothing subtracted (other than water – that’s ok) and be made by nature (no process that has significantly altered the food’s original physical, chemical or biological state). Obviously, this doesn’t answer all of our questions about what is “natural”, but it certainly gets us at least part of the way.
In answer to the question, “What is the meaning of ‘natural’ on the label of food?” the FDA stated:
From a food science perspective, it is difficult to define a food product that is ‘natural’ because the food has probably been processed and is no longer the product of the earth. That said, FDA has not developed a definition for use of the term natural or its derivatives. However, the agency has not objected to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances.
Thus, the FDA has given similar guidance as the CFIA, while not addressing the nothing subtracted, and made by nature elements of the Canadian position.
Interestingly, as early as the mid-1970s, the Federal Trade Commission (FTC) attempted to define “natural”. It gave up in 1983, concluding that it was unable to establish a definition given the wide variety of products and industries involved in food production, and the varying expectations of consumers in connection with (by way of example) a natural apple vs. natural ice cream. The FTC has not attempted to address the issue in connection with food again.
Brander Beware…
It seems as though new class actions are commenced weekly or even daily in the U.S. against food manufacturers for clean label claims. Despite the fact that few of these cases are actually being heard in court, they are getting big press and big settlement payments from industry to consumers.
By way of example, Kellogg’s recently paid $5 million into a settlement fund and agreed to remove “all natural” from its Kashi product labels. The litigation arose because of the alleged inclusion of ingredients like pyridoxine, hydrochloride (vitamin B6), calcium pantothenate (vitamin B5), ascorbic acid and calcium phosphate (among others) in products labelled “all natural”. By way of another example, an “all natural” class action against Dole asserted that it was misleading to label fruit products containing citric acid and ascorbic acid as all natural.
The U.S. courts are being asked to weigh in on questions like: can products made from a natural process, but containing man-made additives be accurately labeled as “natural”? In Canada, based on the CFIA’s position as set out above, the answer would be no. In the U.S., without guidance from the FDA and/or the courts (i.e. because most cases are settled), the answer is a resounding “huh????”
Meanwhile, companies continue to fuel consumer demand for clean labels, labelling foods as “natural” without any real understanding of what the term means. The result: great uncertainty for industry and a “crossing fingers” approach to branding. For more information on U.S. litigation around “all natural” labels, and for a discussion of attempts made by the U.S. courts to have the FDA define the term, check out this publication by one of my partners, Stefanie Fogel, Co-chair of the DLA Piper Food and Beverage group in the U.S.
But What About Canada?
It goes without saying that the litigation we’re seeing in the U.S. has not made its way to Canada in quite the same way, perhaps because of the greater clarity provided by our regulator, perhaps because of our less-active plaintiffs’ bar. However, we are starting to see some “copycat” litigation, highlighting the fact that we are far from immune from clean label-based class actions.
Thus, Canadian manufactures need to tread carefully in responding to consumer demand for clean labels. Remember that the Food and Drugs Act prohibits labeling or advertising a food in a manner that is false, misleading or deceptive, or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit or safety.
No matter how far consumers push industry, regulatory requirements must still be met. At least in Canada we have a bit of a better sense of what those requirements may be.
Sara Zborovski
