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PHILIP C. OLSSON RICHARD L. FRANK DAVID F. WEEDA (1948-2001) DENNIS R. JOHNSON ARTHUR Y. TSIEN JOHN W. BODE* STEPHEN D. TERMAN MARSHALL L. MATZ MICHAEL J. O'FLAHERTY DAVID L. DURKIN NEIL F. O'FLAHERTY BRETT T. SCHWEMER TISH E. PAHL ROBERT A. HAHN EVAN P. PHELPS GARY H. BAISE DAVID A. BIEGING KATHRYN E. BALMFORD *PRACTICE WITHIN THE DISTRICT OF COLUMBIA IS LIMITED TO MATTERS AND PROCEDURES BEFORE FEDERAL COURTS AND AGENCIES

OLSSON FRANK WEEDA

TERMAN BODE MATZ PC ATTORNEYS AT LAW

S U I T E 4 0 0

1 4 0 0 S I XT E E N T H S T R E ET, N . W. WA S H I N G T O N , D . C . 2 0 0 3 6 ( 2 0 2 ) 7 8 9 - 1 2 1 2

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JOLYDA O. SWAIM JONATHAN M. WEINRIEB NANCY W. MATHEWSON

MCKAY R. TOLBOE* COUNSEL

ROGER R. SZEMRAJ OF COUNSEL

JUR T. STROBOS KENNETH D. ACKERMAN

MARK L. ITZKOFF ELLIOT BELILOS

SENIOR POLICY ADVISORS JOHN R. BLOCK

CHARLES W. STENHOLM GEORGE McGOVERN

SALLY S. DONNER BRENT W. GATTIS

BARBARA J. MASTERS

MEMORANDUM

March 24, 2010 FROM: Olsson Frank Weeda Terman Bode Matz PC RE: Mandatory Nutrition Labeling Requirements for Restaurants

On March 23, 2010, President Obama signed the Patient Protection and Affordable Care

Act (H.R. 3590) into law. This health care reform legislation includes a provision, Section 4205, requiring mandatory nutrition labeling for food sold at chain restaurants and similar retail food establishments.

Specifically, Section 4205 amends the Federal Food, Drug, and Cosmetic Act (FD&C Act) by requiring that food sold at restaurants, similar retail food establishments, and vending machines that are part of a chain with 20 or more locations (or vending machines) must provide certain nutrition labeling information. Until now, restaurants and similar retail food establishments have been exempt from the FD&C Act’s nutrition labeling requirements that apply generally to packaged foods. See 21 U.S.C. § 343(q)(5)(A)(i) and (ii). The new requirements are aimed at providing consumers with greater nutrition information when consuming food away from home, while providing uniform nutrition labeling requirements that restaurants can implement nationwide. We provide below a summary of the provisions of section 4205. A. MANDATORY NUTRITION LABELING

(New 21 U.S.C. § 343(q)(5)(H))

The legislation requires mandatory nutrition labeling of standard menu items offered for sale in a restaurant or similar retail food establishment that is part of a chain with 20 or more locations doing business under the same name (regardless of type of ownership) and offering substantially the same menu items. 21 U.S.C. § 343(q)(5)(H)(i).

OLSSON FRANK WEEDA TERMAN BODE MATZ PC

March 24, 2010

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The term “similar retail food establishment” is not defined in section 4205. However, based on the Food and Drug Administration’s (FDA) regulations implementing the nutrition labeling requirements for packaged foods, the term likely is to be interpreted to mean establishments where food is served for immediate human consumption (e.g., institutional food service establishments, such as schools, hospitals, and cafeterias; transportation carriers, such as trains and airplanes; bakeries, delicatessens, and retail confectionery stores where there are facilities for immediate consumption on the premises; food service vendors, such as lunch wagons, ice cream shops, mall cookie counters, and sidewalk carts where foods are generally consumed immediately where purchased or while the consumer is walking away, including similar foods sold from convenience stores; and food delivery systems or establishments where ready-to-eat foods are delivered to homes or offices). See 21 C.F.R. § 101.9(j)(2)(ii). In addition, the term appears also to include retail establishments that sell takeout food. See 21 U.S.C. § 343(q)(5)(A)(ii); 21 C.F.R. § 101.9(j)(3).

1. Disclosure of Nutrition Information

Restaurants and similar retail food establishments covered by the legislation are required

to disclose: (1) calories on the menu or menu board (including drive-through menu boards), and (2) additional nutrition information available in writing in the establishment upon the consumer’s request.

In addition to disclosing the number of calories per standard menu item as usually

prepared and offered for sale, the menu or menu board must also include a succinct statement concerning the suggested daily caloric intake. Section 4205 requires FDA to specify the wording of the succinct statement, which must be designed to enable the public to understand, in the context of the daily diet, the significance of the nutrition information provided. Finally, menus and menu boards must provide a clear and conspicuous statement notifying consumers of the availability of additional nutrition information.

Covered establishments are also required to make available to consumers upon request

additional nutrition information in writing (e.g., a brochure), on the premises. This additional nutrition information must include the amounts of the following macronutrients per serving size or other unit of measure: calories, calories from fat, total fat, saturated fat, cholesterol, sodium, total carbohydrates, sugars, dietary fiber, and protein.1

1 Although declaration of “trans fat” is not required under the language of the FD&C Act, FDA subsequently mandated the declaration of “trans fat” for packaged foods via rulemaking. Again, we anticipate that FDA will adopt the same approach with respect to restaurant foods. Section 4205 provides that FDA may, by regulation, require written disclosure of additional

Unlike packaged foods, section 4205 does not require declaration of vitamins and minerals for standard menu items.


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2. Self Service Food and Food on Display

For foods that are available at self-service facilities (e.g., a salad bar, buffet line or cafeteria line) and self-service foods or beverages that are on display and visible to consumers, covered establishments are required to place a sign adjacent to each food item that discloses calories on a per item or per serving basis.

3. Reasonable Basis Determination

Section 4205 provides that nutrition information disclosed for standard menu items must

be determined with reasonable basis. A reasonable basis determination may be based on nutrient databases, cookbooks, laboratory analyses and other reasonable means described in FDA’s regulations and related guidance.

4. Menu Variability

For standard menu items that are available in different flavors, varieties or combinations,

but which are listed as a single menu item (e.g., soft drinks, ice cream, pizza, doughnuts or children’s combination meals), FDA is required to establish standards (i.e., ranges, averages, or other methods) for determining and disclosing the nutrient content of such items.

5. Applicability

The menu labeling requirements of section 4205 do not

apply to the following food items:

· Items that are not listed on the menu or menu board (e.g., condiments and other items placed on the table/counter for general use);

· Daily specials; · Temporary menu items appearing on the menu for less than 60 days per calendar year; · Custom orders; and · Food that is part of a customary market test appearing on the menu for less than 90 days.2

nutrients for the purpose of providing information to assist consumers in maintaining healthy dietary practices. 21 U.S.C. 343(q)(5)(H)(vi). 2 Section 4205 directs FDA to establish the terms and conditions for foods seeking exemption as part of a customary market test.


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6. Vending Machines

Section 4205 also imposes mandatory nutrition labeling for foods sold from a vending machine that is operated by a person engaged in the business of owning or operating 20 or more vending machines. Unless the vending machine permits prospective consumers to examine the Nutrition Facts panel before purchasing the food or otherwise provides visible nutrition information at point of purchase, the operator must provide a sign in close proximity to each article of food or selection button that includes a clear and conspicuous statement of the number of calories in that article of food. B.

VOLUNTARY NUTRITION INFORMATION

Foods served at restaurants or similar retail food establishments that are not part of a chain of 20 or more locations are not required to provide nutrition information under section 4205. However, restaurants, similar retail food establishments, and vending machine operators that are not covered by Section 4205 may elect to participate in a voluntary nutrition labeling program. If they elect to voluntarily comply with Section 4205, they will be shielded from non-identical state or local requirements under the national uniformity provision of the FD&C Act (section 403A(a)(4)) (see Section D below).

In order to participate in the voluntary program, the restaurant, similar retail food

establishment, or vending machine operator must register biannually with FDA. Section 4205 requires FDA to publish a notice in the Federal Register specifying the terms and conditions for implementation of the voluntary program within 120 days of enactment (i.e., July 21, 2010), and to promulgate implementing regulations at a later date. C.

IMPLEMENTING REGULATIONS

Section 4205 requires FDA to promulgate proposed regulations to implement the mandatory nutrition labeling requirements within one year of enactment. Although section 4205 does not require FDA to issue final regulations within a prescribed timeframe, FDA is required to provide Congress with quarterly reports describing its progress toward issuing final regulations.

The implementing regulations will specify the format and manner in which required nutrition information must be presented (e.g., typesize, contrast). FDA will be called upon to work through the practical challenges presented by nutrition labeling of restaurant foods, which are served in numerous forms. In particular, section 4205 requires FDA to consider the following:

· Standardization of recipes and methods of preparation; · Reasonable variation in serving size and formulation of menu items;


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· Space on menus and menu boards; · Inadvertent human error; · Training of foods service workers; · Variations in ingredients; and · Other factors as FDA determines.

D.

NATIONAL UNIFORMITY

Section 4205 provides for federal preemption of non-identical state and local laws. Specifically, section 4205 amends the FD&C Act’s national uniformity provision regarding nutrition labeling requirements. The amended language prohibits non-identical state or local requirements applicable to:

· Food items for which nutrition labeling is provided in accordance with the new mandatory requirements in 21 U.S.C. § 343(q)(5)(H)(i); and

· Food items for which nutrition labeling is provided in accordance with the voluntary program outlined in 21 U.S.C. § 343(q)(5)(H)(ix).

Importantly for restaurants and similar retail food establishments, this provision preempts

nutrition labeling requirements (e.g., State/local laws that require calories or other nutrients to be posted on the menu or menu board) and requirements arising under state fair trade statutes, that are materially different from the new federal nutrition labeling requirements.

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We trust this information is useful. This is intended as a brief overview of the recently signed legislation. Please let us know if you have any questions, or would like further detail regarding the menu labeling provisions of section 4205.

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