July 15, 2016

Congress Passes GE Labeling Bill, President Obama Expected to Sign Bill Into Law

On July 14, 2016, after more than a year of on-and-off debate and failed attempts at legislative compromise, Congress finally passed a bill to require the creation of a federal labeling standard for bioengineered food within two years. The Senate passed the bill last week, and the House easily passed the bill yesterday by a 306-117 vote. The bill now moves to the White House, where President Obama is expected to sign it into law. Once signed, the law will expressly preempt any existing or future state legislation in this area (unless it conforms to federal standards), including Vermont’s genetically engineered labeling law that just went into effect July 1. In so doing, the law accomplishes one of the key objectives of the food industry — it prevents the potential for a nationwide patchwork of inconsistent state food labeling laws.

What Does the Bill Require?

The bill requires the Secretary of Agriculture to promulgate a disclosure standard for bioengineered food and any food that “may be” bioengineered. The legislation defines bioengineered food as a “a food that contains genetic material that has been modified through in vitro recombinant deoxyribonucleic acid (DNA) techniques; and for which the modification could not otherwise be obtained through conventional breeding or found in nature.”

The bill includes numerous exceptions and will require additional flexibility in the implementing regulations. For example, animal-derived products — such as meat, poultry, milk and cheese — are not required to be labeled solely because the animals were fed genetically manufactured feed. Food products sold in restaurants and other “similar retail food establishments” are also exempt from the disclosure requirements.

Unlike Vermont’s rule, the federal legislation does not address “natural” claims and whether bioengineered food may be labeled “natural.” The bill does, however, address the use of “non-GMO” and similar claims, stating that food may not be considered “non-GMO” simply because the food is not required to bear a disclosure under the federal standard. On the other hand, the bill expressly permits food certified under USDA’s national organic program to bear a “non-GMO” or similar claim indicating the absence of bioengineering in the food.

How Must Bioengineered Ingredients Be Disclosed?

In a significant departure from prior proposed legislation and the Vermont standard, the bill allows food manufacturers to choose how they want to disclose the presence of bioengineered ingredients. Manufacturers may use text, symbols or a digital link (such as a quick response “QR” code) that consumers scan with a smartphone to access information about the bioengineered content. Notably, if a food company uses a QR code or other digital link, it is not required to make any sort of label statement about the presence of bioengineered food and can simply state “Scan here for more food information.” Small food companies (which are not defined in the bill and will be defined in the implementing regulations) will likewise have the option to include a phone number or URL to access information without any statement about the presence of bioengineered food on the label.

What are the Industry Implications?

The Secretary of Agriculture is required to promulgate rules that implement the federal standard within two years, allowing small food manufacturers additional time to comply with the standard. This means that food manufacturers will likely have at least three years from the date the President signs the bill into law to comply. “Very small food manufacturers,” which are not defined in the bill, are not required to follow the standard.

Many companies have already invested significant resources in preparing for the implementation of Vermont’s rules, including investigating their supply chains, seeking assurances from their suppliers and redesigning their labels. Now that Vermont’s affirmative disclosure requirement has been pre-empted, these companies may now choose to suspend some of these efforts and await the coming rules.

However, implementing the anticipated rules may raise other practical difficulties and, potentially, consumer confusion going forward. For example, the bill does not require labeling of foods that contain no bioengineered DNA, even if those foods may be derived from bioengineered plants. As a result, corn oil and soy oil –– products some consider “GMO” –– may not have to be labeled for bioengineered content if the refining process used to produce the oils removes the genetic material from their plant varieties. Similarly, companies that hoped to benefit from Vermont’s exclusion of bioengineered ingredients from products marketed as “natural” may now see their competitive advantage reduced with the federal return to the status quo.

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