Happy April all! This month, we bring you a post about selling food products in interstate commerce, or across state lines. Unlike selling your jams or baked goods at the local market or at shows, there are additional considerations when you decide to expand your business outside of your state. For example, other government agencies may have jurisdiction, and depending on your food product, there are two relevant federal agencies that you should be aware of. This post will briefly discuss the two agencies and what you should do to ensure your food business fully complies with federal laws and regulations.
This post provides a GENERAL overview of applicable requirements which apply to the manufacturing, processing, and sale of food generally for WHOLESALE, though depending on your operation it may also include some direct to consumer requirements. This post is not meant to be relied upon for your specific food product manufacturing and you should a consult an attorney and/or regulatory official for specific advice.
First, there is the U.S. Department of Agriculture (USDA). The USDA oversees all meat, poultry, and some egg products, and is the primary agency that regulates those specific food products. Second, there is the Food and Drug Administration (FDA). The FDA oversees the remaining food products and is the primary agency regarding food regulation in the U.S. Both the USDA and the FDA are able to regulate food businesses through the authority provided in the Food, Drug, and Cosmetic Act (FD&C Act). The Food Safety Modernization Act (FSMA) is also applicable and focuses on foodborne illness prevention. Because the FDA has such broad jurisdiction, this post will focus primarily on the various requirements within the FDA.
Within the FDA, there are seven primary categories that the agency regulates. The seven categories include: facility registration, recordkeeping, good manufacturing practices, labeling, reporting, preventive controls, and inspections. The FDA, as well as the USDA, have regulatory authority over food businesses because it is their mission to protect the public’s health and safety in regards to food. As such, the FDA has chosen to focus on the below categories because it feels it is the best way to carry out its mission.
- Facility registration
All food facilities that process and manufacture food in the U.S. for wholesale must register their business with the FDA. This FDA page explains which facilities must register and which are exempt (most direct to consumer food facilities are exempt). The FDA also requires the businesses required to register to renew their registration every two years. The renewal years are years that end in an even number and must take place between October 1st and December 31st. Therefore, the FDA requires all food businesses to renew their registration this year between October and December because it is an even-numbered year - 2018. Registration is free and can be completed on the FDA’s website.
The FDA requires that all records be maintained in the event they need to review the records. Records include all invoices, communications, and more. As long as you maintain what you receive, where it comes from, who you get it from, and when you got it, your records should fully comply with the FDA’s regulations. Ultimately, you will want to be as specific as you can and keep track of all business records.
- Good manufacturing practices
This particular category was recently amended by the FSMA along with the preventive controls discussed later. Good manufacturing practices speak to the overall operation of your food business. In all likelihood, as long as you abide by standard industry practice and manufacture, process, and/or package your food product in a commercial-grade kitchen, you will be in compliance with FDA regulations.
Labeling is the primary regulatory concern when selling food products in interstate commerce. Labeling can include the statement of identity, or what the product is, the net quantity, the ingredient list, and nutrition facts. Generally, there are two labels, the front label with the name and net quantity, and the side or back informational panel with the ingredients and nutrition facts. For nutrition facts, the label must include the vitamin D, calcium, iron, and potassium; other vitamins and minerals are optional. There are also 8 food groups that the FDA mandates you identify explicitly because they are food allergens, including milk, eggs, fish, crustacean shellfish, tree nuts, wheat, peanuts, and soybeans. For a more in depth review of food labels, the FDA publishes a comprehensive guide on food labels that further explains anything from what a label must contain to what size font the print must be.
All registered food businesses are required to report any instance where they believe there is a reasonable chance that the food product may pose a risk to a human’s health. Food concerns that the FDA wants reported may include illness or an allergic reaction, and if you as the food business hear of anyone falling ill, you are mandated to report the occurrence so the FDA can follow-up with the incident. Reporting is just one of the ways the FDA further advances their mission of protecting the public’s health and safety, and their ability to respond and mitigate the harm through mandated reporting is just one way of doing so.
- Preventive controls
In addition to good manufacturing practice requirements, the FSMA also enacted preventive controls. The FDA mandates that most food businesses have a hazard analysis and preventive controls plan to ensure the food products do not pose a risk or are dangerous for human consumption. The plan is extensive, and the FDA has published a guidance document. This particular guidance document is tailored for small businesses, however, it is generally a good overview of the plan the FDA requires.
The purpose of developing a hazard analysis and preventive controls plan is to ensure your food product is safe. The plan will help identify areas that may be hazardous, whether the conditions are created naturally, unintentionally, or intentionally. Hazards include the growth of bacteria and toxins, allergen contact and contamination, fragments falling into the product, and ensuring temperature control at every stage of production and distribution.
Lastly, all food businesses required to be registered with the FDA are subject to inspections by the agencies. Because there are so many businesses that the FDA oversees, it is likely a state or local authority will collaborate with the FDA and perform the inspection. The frequency of inspection largely depends on the level of risk your product is as well as other factors like history of compliance. High risk products for example are infant formulas and other foods for infants and small children.
The FDA also recognizes that smaller food businesses may have difficulty meeting the number of regulations surrounding food safety. As such, there are a few exemptions that small businesses may qualify for. The nutrition labeling exemptions for low-volume products found in 21 CFR 101.9(j)(18) and 21 CFR 101.36(h)(2) apply if the person claiming the exemption employs fewer than an average of 100 full-time equivalent employees and fewer than 100,000 units of that product are sold in the United States in a 12-month period. For these exemptions, a notice must be filed annually with FDA. However, If any nutrient content claim (e.g., "sugar free"), health claim, or other nutrition information is provided on the label, or in labeling or advertising, the small business exemption is not applicable for a product.
There are also exemptions for the preventive control measures. Qualified facilities may submit a modified hazard analysis and preventive controls plan to the FDA. A qualified facility is a business that has less than $500,000 in sales annually, and at least half of all sales must be to consumers, local retailers, restaurants, Indian reservations, or very small businesses. Very small businesses are businesses that have less than $1 million in annual sales and the market value of unsold product. For an exemption for the preventive control measures, a notice must be filed with the FDA, and you must maintain the qualified facility status to remain exempt.
We hope this month’s post helped clarify the federal-level regulations about food businesses! If you have any questions or would like advice specific to your situation, please contact us, another attorney, or a regulatory official.
This is not intended as specific legal advice and is for educational purposes only.