By Gary Wolensky, Anne Marie Ellis, Michael Preciado

We’ve all been there before. You open the fridge to grab a snack, but at the last second you check the expiration date to determine whether the item might be a day or two “expired.”

When you look closely at the date label, you see that it says “Best By.”  Not knowing what that means, you believe the food item is spoiled and throw it away. You are not alone as Americans throw away $218 billion worth of food away each year.  According to the Natural Resources Defense Council, 40% of food in the United States goes to waste, which amounts to 20 pounds of food per person every month. Food waste also crowds landfills and creates greenhouse gas emissions. Much of this waste is attributed to unclear and ambiguous food labeling, which causes consumer confusion, and results in good food being thrown out unnecessarily.  However, this needless waste may be avoided once new label changes are implemented next year.

With the exception of infant formula, which is federally regulated, date labels for food products are generally left to the discretion of manufacturers and are not regulated by the Food and Drug Administration.  This is also true in California, where the use of date labels is voluntary and not subject to regulation.  Currently, there are at least 10 types of date labels being used across the country, which include “Sell By,” “Use By,” “Expires On,” “Best Before,” “Better if Used By,” or “Best By.”  These date labels are typically meant to convey a message from the manufacturer to the grocery store (not the consumer) of how long the food product will look “best” on store shelves or a subjective measure—based on pure guesswork—of when consumers would most enjoy the food product.  This hodgepodge labeling system has left consumers scratching their heads with no idea what the labels are trying to tell them, or with the mistaken assumption that these labels indicate a safety designation.

To resolve this confusion, two major industry groups—the Food Marketing Institute and the Grocery Manufacturers Association, whose members include the nation’s top food manufacturers and retailers—have recently adopted voluntary standards and have asked their members to use only two standardized phrases for labeling: “Best if Used By” and “Use By.”  The goal is to streamline food labeling throughout the nation, to clarify the meaning of expiration dates, and to curb food waste.  The “Best If Used By” label is a quality designation used to indicate when food products are the most “fresh” to eat (but would still be safe to eat after the label date).  The “Use By” label is safety designation meant to indicate when perishable goods are no longer safe to eat.  In December 2016, the U.S. Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS) issued new guidance and endorses the use of the phrase “Best if Used By” because most consumers understand that this phrase indicates quality and not safety.  The agency was accepting comments through mid-February, and while only 44 comments were documented at the time this article was written, they were overwhelmingly in favor of simplifying the current system.

While the Food Marketing Institute and the Grocery Manufacturers Association are urging members to implement the label changes immediately, the standards do not go into effect until July 2018 and will only be voluntary.  Nevertheless, a number of major manufacturers have signaled their willingness to adopt the new labeling standards, and industry insiders believe there will be widespread adoption.  The new industry standards are also a way for food manufacturers to undermine looming federal legislation. Last year, two Democratic senators introduced legislation to standardize date labels and food donation laws, and they are expected to reintroduce the bill again soon. Although, given the new administration’s promise to rollback federal regulations by “knocking out two regulations for every new regulation” adopted by federal agencies, the chances of this bill going into effect is low.  Nevertheless, food manufacturers and retailers should take notice of the current shift in the industry.

Beyond that, the adoption of these new labeling standards may have the unintended consequence of spin-off litigation. Consumer advocacy groups and plaintiffs already file hundreds of food labeling class action lawsuits against food and beverage companies each year. Now that a majority of food manufacturers may adopt the above industry standards to streamline food labeling, plaintiffs’ attorneys will likely target food manufacturers who fail to implement the new labeling standards. Indeed, plaintiffs’ attorneys will likely use the new industry standards themselves as the very basis to file class action lawsuits against the food manufacturers who fail to implement them. This is particularly likely in California where plaintiffs’ attorneys wield two powerful litigation tools: the Unfair Competition Law, California Business and Professions Code sections 17200 through 17209 (“UCL”), and the Consumers Legal Remedies Act, California Civil Code sections 1750 through 1784 (“CLRA”). The UCL has broad sweeping liability standards and broad equitable remedies, while the CLRA authorizes the recovery of actual, statutory, and punitive damages. Consequently, food manufacturers who fail to adopt the new standards should expect to be hit with class action lawsuits alleging that their “confusing” labeling systems are false and misleading, and have caused thousands of class members to unnecessarily dispose of perfectly edible food.

Food manufacturers should also be aware that simply complying with the new standards should not be seen as a panacea if they accidently provide spoiled food products.  U.S. food law is generally rooted in the premise that food sold in commerce must be wholesome and fit for consumption.  Just because a manufacturer implements a “Best if Used By” or “Use By” label that does not exempt them from providing fresh, safe, and edible food products. Indeed, regardless of any expiration date on a label, if a food is dangerous to consumers, the FDA could still bring a potential action to remove that food from the shelves.

If you are a manufacturer or retailer of food products, you will be affected by these new industry standards.  Please contact Gary Wolensky, Anne Marie Ellis, or Michael Preciado if you have any questions about this Client Alert. If you are a manufacturer or retailer of food products, you will be affected by these new industry standards.  Please contact Gary Wolensky, Anne Marie Ellis, or Michael Preciado if you have any questions about this Client Alert.

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