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Profit from regulation



The continuing expansion of nutritional labeling means business for converters.



By Jack Kenny, Contributing Editor



Published March 13, 2013
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Like other business owners, the majority of label converters are proponents of fiscal conservatism, in their practices as well as their politics. They share with most people a dislike of taxation, and keep themselves educated on ways to reduce the amount of money that they turn over to various governments. Increases in taxes and other charges are anathema to the business owner, especially those who run small companies. It is safe to say that most of them would rather not see government expand its regulatory hold on commerce.

Yet label printers, and others in the packaging field, are routinely the beneficiaries of government regulation.

A label is a product decoration, a brand identity, and a source of information about what’s in the package. On most food labels, that information includes nutritional data, and is regulated by government agencies in many countries. When the regulations change, the labels must be reprinted. When the labels change, the label converter has more work.

Health Canada is the federal department responsible for helping Canadians maintain and improve their health. In February 2011, it published amendments to its Food Allergen Labeling Regulations, which went into effect in August 2012. Health Canada said, “The Food and Drug Regulations require that most prepackaged foods carry a label and that the ingredients appear on labels in decreasing order of proportion. However, some ingredients used in food products which were previously exempt from declaration in the list of ingredients, (e.g., components of margarine, seasoning and flour) will now be required to appear on food labels also.”

We’ve been learning that celiac disease is on the rise, though the causes have not been conclusively determined. People who suffer from this and other food allergies – some of them severe – must know the ingredients of the product behind the label, and even the conditions under which it was manufactured. Many of those who produce the labels that appear on foods sold in Canada were asked to print new ones over the past year or two to comply with the new regulation. In the United States, the Food Allergen Labeling and Consumer Protection Act was set forth by the Food and Drug Administration (FDA) in 2004.

Governments have been helping label companies make more money for at least a century. In 1913, the US Congress passed the Gould Amendment, which required that food package contents be “plainly and conspicuously marked on the outside of the package in terms of weight, measure, or numerical count.” In US v. 95 Barrels Alleged Apple Cider Vinegar, the Supreme Court in 1924 ruled that the Food and Drugs Act condemns every statement, design, or device on a product’s label that may mislead or deceive, even if technically true. Surely some printers (and lawyers) were consulted after that ruling came down.

In 1950, a US court of appeals ruled that the directions for use on a drug label must include the purpose for which the drug is offered. Therefore, a worthless remedy cannot escape the law by not stating the condition it is supposed to treat. In the same year, the Oleomargarine Act required prominent labeling of colored oleomargarine, to distinguish it from butter. A decade later, the Federal Hazardous Substances Labeling Act, enforced by the FDA, required prominent label warnings on hazardous household chemical products. The US Fair Packaging and Labeling Act, passed in 1966, required all consumer products in interstate commerce to be honestly and informatively labeled, with the FDA enforcing provisions on foods, drugs, cosmetics, and medical devices. The first patient package insert was mandated in 1970 by the FDA, requiring that oral contraceptives contain information for the patient about specific risks and benefits.

A big year for US food labels came in 1990 with the passage of the Nutrition Labeling and Education Act. Starting in 1991, all packaged foods would bear nutrition labeling and all health claims for foods were to be consistent with terms defined by the secretary of health and human services. The law preempted state requirements about food standards, nutrition labeling and health claims and, for the first time, authorized some health claims for foods. The food ingredient panel, serving sizes, and terms such as “low fat” and “light” were standardized. That was the birth of the Nutrition Facts panel, which continues to undergo changes in the 22 years since its creation.

As of 2012, most developed nations have in place either mandatory nutrition labeling laws or voluntary ones. They define which nutrients must be listed and on what basis (e.g., 100g/per serving), and they also allow voluntary initiatives to provide additional nutrition information. Other nations provide state-sponsored guidelines to be followed voluntarily. They define which nutrients should be listed and on what basis, but labeling is not mandatory unless a health or nutrition claim is made or unless the food is for special dietary uses.

Nations ponder standardization
A report titled “Global Update on Nutrition Labeling,” published in 2012 by the European Food Information Council, summarizes the relevant actions and plans of various nations today. It says that an effort is under way to try to create a single format for nutrition facts, specifically information that appears on the front of the package (FOP).

According to the report: “FOP nutrition labels are being considered by several countries (e.g., Australia, New Zealand, United States, Canada). Key considerations are whether to make FOP labels mandatory and if so, whether they should emphasize a judgment of nutritional quality through color-coding (‘traffic lights,’ for example), a symbolic ‘health logo’ based on nutrition criteria that determine whether a product qualifies to bear the health logo within a food or beverage category (e.g., heart symbol, ‘Green Keyhole’), or provide information as a percent of daily consumption, such as guideline daily amounts (GDAs). The debate on the format of FOP labels gathered momentum when the UK Food Standards Agency (FSA) launched a ‘traffic light’ scheme for FOP labels. Many consumer groups, public health NGOs and some governments in Europe, the United States, and the Asia-Pacific region have voiced support for the UK FSA’s traffic light scheme. In May 2011, Thailand became the first country to introduce mandatory FOP nutrition labels for five snack categories.

“The variety of nutrition labeling schemes has led to calls for a single format for FOP labels based on harmonized nutrient criteria. In response to pressure to standardize a single format for FOP labels, the US FDA announced its intention in 2009 to pursue new regulation in an effort to unify a FOP labeling system and reduce consumer confusion. The agency has also drafted a letter to industry to serve as guidance regarding point-of-purchase food labeling and, along with the Centers for Disease Control and Prevention, commissioned the Institute of Medicine to review FOP nutrition rating systems and symbols. In light of this development, some programs decided to postpone operations. For example, on October 23, 2009 the Smart Choices Program, which was developed by the Keystone Center Food and Nutrition Roundtable, voluntarily postponed active operations.”

The report also mentions, “There is a growing opinion in the United States that the Nutrition Facts panel is not enough or that it should be revised to make it more understandable and usable.” The nutrition discussion in the US is unavoidable, and in some respects it is a political debate. But it’s not going away. As long as people consume food, beverages and pills, regulations will continue worldwide, and the labels will be reprinted every time they change. lnw




The author is president of Jack Kenny Media, a communications firm specializing in the packaging industry, and is the former editor of L&NW magazine. He can be reached at jackjkenny@gmail.com.


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