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INSIGHT: FDA Makes Three (Regulatory) Orders Helping Restaurants

April 23, 2020, 8:00 AM

The food industry has been upended by the recent Covid-19 pandemic—restaurants and bars are scrambling to adjust to a new way of life after governors across America issued statewide “stay at home” orders in response to the coronavirus pandemic.

The Food and Drug Administration has relaxed labeling standards during this emergency period, providing restaurants the opportunity to develop new cash flows while also providing the public what it needs—food. The relaxed menu labeling rules allow many food service outlets to transition from in-store dining to takeout and retail.

Restaurants are now only permitted to serve take-out or drive-thru orders, and some restaurants have transformed themselves into neighborhood markets, or bodegas, selling food items not labeled for retail. The FDA has recently issued three orders to assist struggling restaurants and bars during this time.

Of course, with new ventures come new risks. And while the FDA has relaxed restrictions, the devil is in the details. We anticipate that the next wave of lawsuits will likely involve claims of false advertising based on restaurants’ product labels (or lack thereof).

Therefore, it is important to consult with an attorney if your business is considering adapting its menus and/or offerings.

Relief for New Neighborhood Markets

Under normal circumstances, the FDA heavily regulates nutritional label requirements for food products sold at retail. Products sold at wholesale to restaurants, however, do not have the same stringent requirements, as consumers typically never see the items used to create their favorite dishes.

As restaurants transformed themselves into neighborhood markets, selling unused ingredients that would typically never hit a retail shelf, a tension between FDA compliance and the restaurants’ survival had developed. To ease this tension and assist restaurants during the current pandemic, on March 26, the FDA issued the “Temporary policy regarding nutrition labeling of certain packaged food during the Covid-19 public health emergency.”

The March 26 order temporarily suspends labeling requirements for food products sold at retail. Specifically, the FDA stated that it will not object if food items sold to retail consumers lack a Nutrition Facts label, provided that the food does not have any nutrition claims and contains other required information on the label, including:

  • A statement of identity;
  • An ingredient statement;
  • The name and place of the business of the food manufacturer, packer, or distributor;
  • Net quantity of contents; and,
  • Allergen information required by the Food Allergen Labeling and Consumer Protection Act.

The March 26 order provides opportunities to restaurants, as their cash flows thin and produce and food products spoil in their kitchens. Restaurants can now sell what would have otherwise been ingredients in dishes made at the restaurants, directly to consumers without fear of backlash from the FDA.

Streamlined Restrictions for Takeout

The recent (mandatory) shift in restaurant culture has forced dining establishments to redefine their menus, be creative with their options, and, in some cases, explore uncharted territory—including takeout.

The FDA issued an April 3 order, “Temporary policy regarding nutrition labeling of standard menu items in chain restaurants and similar retail food establishments during the Covid-19 public health emergency,” to assist restaurants with this transition.

The order temporarily relaxes menu labeling rules for restaurants that have 20 or more locations. Specifically, the FDA has suspended the requirement to include nutrition information on standard menu items. “Because calorie information is required to be declared for standard menu items when a consumer makes a selection, establishments may have difficulty providing this information during a rapid transition to a takeout business practice,” the FDA said.

“Additionally, some of these establishments may be experiencing temporary disruptions in the food supply chain, which may lead to different menus or substitutions that could affect the accuracy of the nutrition information.”

Therefore, to provide flexibility to these chains, the FDA will not object if establishments do not meet menu labeling requirements during this public health emergency. Restaurants that would otherwise be limited in their ability to transform themselves now have greater flexibility to weather the Covid-19 storm.

Egg Labeling Relaxes

The FDA is also relaxing egg labeling and packaging requirements to meet consumer demands. As you may be aware, the Covid-19 pandemic has caused an uptick in consumer demand for eggs—a demand that many are struggling to meet simply because they lack the required retail labels and packaging. To assist, the FDA is providing temporary flexibility regarding certain packaging and labeling requirements.

Typically, eggs sold at retail must include labels containing the name and place of of the manufacturer, packer or distributor; nutrition labeling; a statement of identity; and, the net quality of contents and safe handling instructions.

The FDA’s April 3 order relaxes these packaging and labeling requirements. Now, eggs can be sold absent labels containing the required information, if the retail food establishment displays the information through other means—i.e. by posting the information on a sign nearby. However, the shell eggs must still be sold by the complete carton or flat and no nutrition claims can be made at the point of purchase for the shell eggs.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Daniel Herling is a member in Mintz’s litigation group and co-chair of the firm’s Product Liability practice. He focuses his practice on product liability issues relating to consumer products. He has served as a defense counsel in over 3,000 product liability cases involving pharmaceuticals, medical devices, food, cosmetics, over-the-counter drugs, and food and products marketed as containing natural ingredients.

Nicole Ozeran is an associate in Mintz’s litigation group focusing on complex corporate litigation, with an emphasis on consumer fraud, online and telephone marketing, false advertising, and regulatory and statutory compliance issues. She advises clients in all stages of litigation, from pre-litigation counseling and investigation through discovery, dispositive motion practice, trial, and appeals.