March 10, 2016

Vermont GMO Labeling Law Deadline Looms for Food Companies -- and Congress

Seller Beware: Consumer Protection Insights for Industry

The Vermont GMO labeling law takes effect on July 1, and so far there is no word from the Second Circuit Court of Appeals on the food industry's challenge to the law, which would require special labeling of most foods sold in Vermont and could have a practical effect on the labels of foods sold nationwide. Congressional leaders are therefore under pressure to agree on a national standard that can pass the Senate floor, survive conferencing and House consideration, and be signed into law prior to July 1. March 2016 has brought a flurry of legislative proposals and activity intended to preempt the Vermont law that should be monitored by any company that sells products that contain genetically modified components.

Most significantly, on March 1, the Senate Agriculture Committee reported out favorably by a vote of 14-6 Chairman Pat Roberts' (R-KS) bill on biotechnology labeling. The bill would establish a national voluntary GMO labeling standard and preempt state GMO labeling laws. The bill, however, would not preempt Vermont's GMO labeling law on the definition of "natural." As we discussed here, the Food and Drug Administration (FDA) is currently considering whether to define the term "natural" and set guidelines for how the term is used for food products, including products containing GMO ingredients. Chairman Roberts bill also would direct the Department of Agriculture to educate and engage consumers on biotechnology and require a report to Congress on what GMO information is publicly available.

While all Republicans voted for the bill, approval was not based on a party-line vote. Three Democrats, Senators Joe Donnelly (IN), Heidi Heitkamp (ND), and Amy Klobuchar (MN), voted in favor of the bill, contingent on the Chairman working with Ranking Member Debbie Stabenow (MI) to find a compromise to the voluntary standards. Both Senators Heitkamp and Klobuchar expressed concern that the bill does not do enough to educate consumers about the sourcing of their food. Senator Heitkamp, who has been a longstanding supporter of biotechnology, said that while the bill does help to protect interstate commerce, she has reservations with how the bill preempts state laws through a voluntary provision.

Ranking Member Stabenow has indicated that negotiations will focus on mandatory disclosure. She has previously floated a two-year temporary preemption followed by a mandatory GMO labeling; however, this proposal was a non-starter for Republicans. Her position on mandatory disclosure and concerns about preempting state laws are the primary reasons for Democrats opposing the current bill.

Some Democrats, including members of the Agriculture Committee, introduced a GMO labeling bill aimed at requiring manufacturers to disclose genetically modified ingredients on the Nutrition Facts Panel. The Biotechnology Food Labeling Uniformity Act (S. 2621) would require manufacturers to select one of the four disclosure options: (1) use a parenthesis after an ingredient that is "genetically engineered"; (2) denote a genetically engineered ingredient with an asterisk and explain that it is genetically engineered at the bottom of the ingredients list; (3) include a statement of "produced with genetic engineering" at the end of the ingredient list; or (4) have FDA create a symbol to use on a product's package to disclose that it contains genetically modified ingredients. The bill does not require warning statements or for the disclosure to be placed on the front of a product's packaging.

According to recent reports, the Senate Agriculture leadership aims to have an agreement brought to the Senate floor by the Easter recess. In fact, it is likely that Senator Roberts' bill could be considered on the Senate floor next week for a vote, particularly if a compromise can be reached between Chairman Roberts and Ranking Member Stabenow along with Senators Donnelly, Heitkamp, and Klobuchar. The industry-backed Coalition for Safe Affordable Food remains hopeful that a solution can be reached by July, especially with indications that Senate Majority Leader Mitch McConnell has expressed interest in seeing Senator Roberts' bill move forward.

Given that the House passed its GMO labeling preemption measure (H.R. 1599) by a vote of 275-150 last July, the expectation is that Speaker of the House Paul Ryan (R-WI) and House Agriculture Committee Chairman Mike Conaway (R-TX) are in communication with Chairman Roberts to ensure that a GMO labeling measure would move fairly quickly in the House should the Senate pass its bill. Although the Obama Administration has not spoken directly on Chairman Roberts' GMO labeling measure, Secretary Tom Vilsack remarked earlier this year that a patchwork of state laws on GMO labeling could create "chaos in the market" and repeated again this week that he wants to see disclosure requirements in the bill. He also has tried to work with industry, environmental groups, and consumer groups to find a working solution on GMO labeling to no avail. Therefore, if Senators Roberts and Stabenow are able to reach a compromise on a GMO labeling bill, it is likely that the Obama Administration will not issue a veto threat.

Unless Congress reaches an agreement on GMO labeling or the Second Circuit overturns a lower court's ruling not to enjoin the State of Vermont decision to require GMO labeling, food manufacturers should be prepared to comply with the Vermont GMO labeling law on July 1.

© Arnold & Porter Kaye Scholer LLP 2016 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.


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