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January 06, 2015 Articles

FSMA: New Rules Mean New Risks for Food Industry Clients

By Sarah Brew and Rachael Dettmann Spiegel

FSMA, what is it? If you have clients in the food, dietary supplement, or animal feed industries, you might have heard rumblings about the Food Safety Modernization Act (FSMA) and client confusion regarding how companies can become FSMA-compliant. After years of delays in releasing proposed regulations, we now have a certain date by which operations will need to be compliant with the primary FSMA regulations, thanks to a lawsuit and consent decree between the Food and Drug Administration (FDA) and a consumer activist group. Noncompliance with FSMA could lead to significant business risks for your clients, including possible litigation. This article briefly explains FSMA, discusses its impacts on the food industry, and provides a high-level overview of the newly revised proposed rules released by the FDA in late September.

How Did We Get to FSMA?
FSMA was signed into law in January 2011 after a slew of large food safety outbreaks between 2006 and 2010, including some resulting in deaths (e.g., salmonella-tainted peanut butter from the Peanut Corporation of America). Congress intended FSMA to strengthen food safety practices within the food manufacturing supply chain—which includes everything from food production to grocery stores. In short, FSMA shifts the FDA from being largely reactionary—waiting for a food safety outbreak to occur before responding—to an agency focused on prevention—detecting and preventing food safety problems before they cause public harm.

FDA Gets New Powers
Before FSMA, the FDA lacked authority to order a mandatory food recall. Under FSMA, the FDA can now order a food safety recall and even shut down a facility if some food poses a reasonable probability of causing a serious food safety threat. What does this mean for the industry? Depending on the size of the client and its ability (or lack thereof) to shift production, this could potentially mean bankruptcy, breach of contract disputes, and possible foodborne illness litigation. Indeed, one of the larger peanut and nut butter manufacturers had its facilities shut down by the FDA and went bankrupt after a foodborne illness outbreak and recall in 2012–2013. In addition, facilities will be subjected more often to FDA inspections, which are expected to be far more detailed and onerous than they are today.

What Does FSMA Mean for the Food Industry?
FSMA requires many facilities throughout the food supply chain to have a written food safety plan that includes, among other things, a hazard analysis and set of policies and procedures for implementing and documenting compliance. The facilities will need to implement preventive controls to prevent or significantly minimize the food safety hazards identified, monitor the preventive controls, and take corrective actions as necessary. FSMA will require companies to create and maintain extensive records of these actions. Implementing and documenting preventative controls is one of the more significant aspects mandatory for a company to be FSMA-compliant.

The result for most manufacturers (depending on the size of operation) will be a food safety program that should include, among other things

  • a hazard analysis and risk-based preventive control (HARPC) plan, which is similar to a hazard analysis and critical control points (HACCP) plan;
  • procedures for following good manufacturing practices (GMPs);
  • a recall plan;
  • environmental sampling and controls;
  • allergen controls and labeling; and
  • supplier verification and management.

Although preventative controls are not new to the industry—many companies employ similar methods already—what's new is that FSMA broadens the scope of the preventative controls regulated by the FDA and provides the FDA with the ability to enforce those regulations.

Rules, Rules, and Now New Rules!
To implement this regulatory overhaul, the FDA has spent the last three years promulgating proposed rules and reviewing extensive industry comments on those rules. Although the FDA has been keen to solicit as much industry feedback as possible, the lengthy time period involved resulted in litigation by a consumer group and a consent decree and order. That order requires the FDA to release final rules for the seven primary FSMA regulations over the course of 2015 and 2016, with the most significant rule (preventive controls) to be released by August 30, 2015. All but the smallest businesses will need to comply with that rule one year after it is released.

In 2013, the FDA released proposed rules covering, among other things, preventative controls, inspection and compliance, foreign supplier verification, produce safety, and food defense (prevention of terrorism events involving food). On September 19, 2014, the FDA released a new set of supplemental revised rules on four key aspects of FSMA. The revised rules incorporated many comments from the industry and reflect the FDA's willingness to listen to some industry concerns. The supplemental revised rules recommend changes to the following proposed rules:

  • Preventative controls for human food
  • Preventative controls for animal food (including feed and pet food)
  • Foreign supplier verification program
  • Produce safety rules

Overall, the newly revised rules incorporate more flexibility, making them more practical and tailored to individual facilities. This flexibility means the rules will be applied differently depending on the client's business, the product involved, and the manufacturing facility—so attorneys should reference each rule closely in advising how clients can mitigate noncompliance risks. Flexibility in the rules also leads to grey areas of interpretation—leaving many concerned that FDA inspectors will interpret and apply rules inconsistently throughout industry inspections.

Shifting Industry Concerns: FDA Inspections
As the industry mulls over the latest round of proposed rules, it is becoming clearer what the final rules will look like—few changes are expected in many areas of the proposed rules when the final rules are released in 2015. Industry focus is beginning to shift toward discussing how the FDA will actually implement the rules in practice. The FDA's ability to properly train inspectors and inspector consistency in interpreting regulations is a large concern within the industry. Given the grey areas in the regulations, industry leaders are concerned with the FDA's ability to properly train inspectors about production differences in varying aspects of the food and feed supply chain. An animal feed mill, for example, has a very different production environment than a facility producing ready-to-eat packaged foods like cookies or crackers. Although different preventative controls govern each example, inspectors should be trained to revise their expectations between the two environments accordingly.

As the FDA and the industry prepare to roll out FSMA implementation in 2015, it is important that food and feed clients (1) understand what sections of FSMA are applicable to their operations, and (2) take concerted steps in implementing required policies and procedures prior to August 30, 2016. Failure to make compliance efforts now could have far-reaching business implications when the regulations are enforced. For those clients who are taking steps to be FSMA-compliant, at the end of the day, there is still going to be a "wait and see" period in understanding how FDA inspectors will actually apply FSMA rules during inspections once those rules are implemented. FSMA will undoubtedly result in various forms of anticipated and unanticipated enforcement actions and even litigation. Making sure a food industry client is as prepared as possible for FSMA compliance is of upmost importance.

Keywords: litigation, products liability, food industry, Food Safety Modernization Act, FSMA, Food and Drug Administration, FDA, compliance

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