Initiative 522 Defeated in Washington

Based on preliminary results from Tuesday’s election, it appears that Washington State’s hotly debated Initiative 522 (I-522) concerning the labeling of genetically-engineered foods has gone the way of California’s Proposition 37. Washington officials reported on Wednesday, November 6, 2013 that voters had rejected the measure, 54% to 46%. California’s similar labeling measure, Proposition 37, was rejected by California voters in November 2012.

County by county results show that certain counties in Washington including, King, Whatcom, and Jefferson, were largely in favor of passing I-522. However, the measure lost heavily in the southwest, central and eastern regions of the state.

If it had passed, I-522 would have required that any food offered for retail sale in Washington that was or may have been entirely or partly produced with genetic engineering to be labeled as follows:

  • In the case of a raw agricultural commodity, the package offered for retail sale must clearly and conspicuously display the words “genetically engineered” on the front of the package, or where such a commodity is not separately packaged or labeled, the label appearing on the retail store shelf or bin where such a commodity is displayed for sale must display the words “genetically engineered;”
  • In the case of any processed food, the front of the package of such food must clearly and conspicuously bear the words “partially produced with genetic engineering” or “may be partially produced with genetic engineering;” and
  • In the case of any seed or seed stock, the seed or seed stock container, sales receipt or any other reference to identification, ownership, or possession, must state clearly and conspicuously that the seed is “genetically engineered” or “produced with genetic engineering.”

Importantly, I-522 would have exempted certain foods from the genetically engineered labeling requirements. In particular, the measure carved out an exemption for alcoholic beverages as well as other food products such as certified organic products, medical foods, food sold for immediate consumption such as in a restaurant, products unintentionally produced with genetically engineered material, food made from animals fed or injected with genetically engineered material but not genetically engineered themselves, food processed with or containing only small amounts of genetically engineered ingredients, and any processed food that would be subject to the labeling requirement solely because one or more processing aids or enzymes were produced or derived with genetic engineering.

Several other states currently have pending GMO labeling legislation that will be addressed during the next legislative session for those respective states. Stoel Rives attorneys will continue to track these state GMO labeling measure as developments occur. Check back here for updates.

Federal Officials Mull Changes to Alcohol Label Approval Process

Alcohol and Tobacco Tax and Trade Bureau (TTB) official Susan Evans, the Executive Liaison for State and Industry Matters, talked about ways to streamline the federal label approval process at the June 2013 National Conference of State Liquor Administrators (NCSLA) that I attended in Honolulu. Speaking on a panel, she said that the TTB has experienced reduced staffing and declining budgets, which have slowed down two of its major functions: permitting and approving labels. 

According to Ms. Evans, nearly 25,000 permittees submit certificate of label approvals (COLAs) to TTB . Last year TTB received over 145,000 COLA applications. In the last two years, TTB has imposed fewer restrictions and qualifications, updated the COLA form to allow changes that may be made to labels without TTB approval, and established a virtual file room for processing paper applications electronically. 

In addition, TTB recently reviewed the label approval program and concluded the following:

  • Many labels never end up in the marketplace.
  • TTB spends too much time on minutia.
  • The current process does not ensure that the label on the container accurately reflects the product.
  • TTB resources would be better spent on labels and products that are currently in the marketplace.

Changes Under Consideration

In reaction to the study, TTB is considering several changes to the label approval program, including:

  • Labels with low risk for noncompliance would be automatically approved. This could include labels for products with Standards of Identity or no additional label claims.
  • Label images would not be submitted with these applications. 
  • Higher-risk labels would receive a traditional review.

As for enforcement against noncompliant labels, TTB suggests:

  • Increasing the sampling of products in the marketplace for compliance.
  • Establishing a noncompliance hotline and email address.
  • Taking action against noncompliant labels.
  • Tracking and reporting noncompliant labels.

TTB is considering a major change to preapproval for labels that will be more like the FDA’s and FSIS’s processes. Those agencies post the labeling regulations and require industry members to comply on a “self-certification” basis.

Audience Reactions

Several state representatives pointed out that most states have come to rely on TTB’s label approval process as a substitute for their own label review programs, and changes like this will put the burden on the states. Some industry members expressed concern that label enforcement will be mostly “complaint driven” and will result in action against only the most egregious examples of noncompliance. And many labels currently kept out of the marketplace will be used on products and sold to consumers. By the time TTB catches up to a company using noncompliant labels, the compliant company could have already lost significant market share. 

Ms. Evans acknowledged that the concerns were valid, and said that TTB is trying to make the best use of its limited resources while completing its missions. She concluded that nothing has been finalized, and that there will be opportunity for public input before any changes are implemented.

Conjunctive Labeling Comes to Sonoma County

               With the turn of the calendar and after nearly a year of political wrangling, conjunctive labeling will be the norm for Sonoma County wineries beginning in 2014. Passed by unanimous vote in both the state assembly and senate in August and signed by Governor Schwartzenegger at the end of September, AB 1798 will require wineries using the name of any of the 13 recognized American Viticulture Areas (AVA) within Sonoma County on their labels to include “Sonoma County” as well. The bill is not retroactive as it applies only to wines bottled after January 1, 2014. Failure to comply is considered a misdemeanor and subjects the violator to possible revocation of their ABC license. To achieve compliance, it will be necessary to file for and receive a new Certificate of Label Approval (COLA) from the TTB for those labels already approved.

Response to the new requirements has been mixed. Pushed heavily by the Sonoma County Winegrape Commission and the Sonoma County Vintners, Nick Frey, the Commission’s president, stated, “In this increasingly competitive wine market, building awareness for Sonoma County and the wine regions within the county is critical to Sonoma County grape growers and the wineries they supply. AB 1798 will ensure that consumers recognize every bottle of wine produced from Sonoma County grapes.” However, several large, well-known wine producers in the region see the legislation as diluting their already well-established brands, in addition to the added cost and confusion of including “Sonoma County” on an often already crowded label.

Some of the better known of Sonoma’s AVAs are the Russian River Valley, Sonoma Coast and Dry Creek Valley. California requires conjunctive labeling for three other viticulture areas: Napa Valley, Lodi, and Paso Robles.

Variations of Organic Labeling

Figuring out what information must be on your wine label can be tedious.  Adding terms like "organic" or "sustainably-grown" can be even more challenging.  Extra steps are required for adding organic certifications or claims to a wine label, although the regulation of such claims under the TTB COLA process has been made more clear with the Memorandum of Understanding between the TTB and the USDA concerning organic labeling and adverting.  The MOU clarifies and delineates the enforcement responsibilities of each agency with respect to labeling and advertising of alcohol beverages produced under the Organic Foods Production Act of 1990 (OFPA). 

The USDA has authority over domestic and imported agricultural products to be sold, labeled, or represented, as organically produced.  Under OFPA, the USDA has established the National Organic Program (NOP).  Agricultural products that are sold or labeled as organically produced must be produced and handled in accordance with NOP.  Any use of the term "organic" on a wine label or in adverting of wine must comply with the USDA's NOP regulations.  Now, with the adoption of the MOU, it is clear that TTB has the regulatory authority to determine whether proposed labels are consistent with NOP. 

The Advertising Labeling and Formulation Division (ALFD) of the TTB has guidance for organic labeling applicants.  The guidelines provide a step-by-step process of what is required to obtain label approval, including the need for proof of USDA-accredited certifying agent (ACA) preview, a certification statement, a sulfite statement, an ingredient statement, the USDA seal, and so on.  The guidelines also contain an organic label quick reference sheet that explains the requirements for the various organic claims, like "100 percent organic," "organic," or "made with organic (specify ingredient)."   Additional TTB guidelines on variations of "organic" labeling are available at www.ttb.gov/pdf/wine.pdf

For fun, I looked at four different bottles of wine that made some claims for "green production."  The first was a NSA Organic, USDA certified wine from the Columbia Valley.  The bottle was blazed with the "organic" nature of the wine, from the foil marked with "NSA Organic" to the "certified organic vineyard" on the "back" label.  The USDA Organic stamp was also featured.  Comparatively, an Oregon pinot from Eola-Amity Hills was simply marked with a small "made with organic grapes" statement and certified organic by Oregon Tilth.  Then there was another wine from Columbia Valley that, while not having any "organic" claim, was described as a "wine of sustainable and environmentally friendly farming."  Finally, the fourth was an Austrian wine certified "Demeter,"  a biodynamics certification.  However, notably many wines that are known to value biodynamic or sustainable farming practices do not make such claims on their labels.  Recognizably, this allows for more flexibility and avoids the extra steps of having to prove organic label claims.