This month we address when the written disclosure requirements under the Produce Safety rule apply.
Please keep your questions coming! You can send them to Tim Birmingham at tbirmingham@almondboard.com with the subject line “FSMA Files.”
Question: I understand that growers can be exempt from the Produce Safety rule if their almonds receive commercial processing and they provide certain disclosure statements that accompany their almonds during distribution. Do these requirements apply when a company is vertically integrated?
Straight Talk: At this point in time, yes, the requirement to provide a written disclosure statement in order to be exempt from the Produce Safety rule would apply to operations that are vertically integrated and share common ownership.
Explanation: Under the Produce Safety rule, produce that would otherwise be covered by the rule is eligible for an exemption from the requirements of the produce safety regulation if it receives commercial processing that adequately reduces the presence of microorganisms of public health significance and certain disclosure and assurance conditions are met. For this “commercial processing exemption” to apply, the farm that produces the produce must, among other things, disclose in documents accompanying the produce, in accordance with the practice of the trade, that the food is “not processed to adequately reduce the presence of microorganisms of public health significance” (“disclosure statement”). In addition, the farm must receive a “written assurance” of commercial processing further down the supply chain, though FDA has delayed implementation of this provision for two years while it addresses feasibility concerns with the requirement.
In the almond industry, product often is transferred between various entities, but it is not sold and ownership is not transferred. In addition, there are many operations (growers, huller/shellers, handlers and/or manufacturers) that share common ownership. Unfortunately, the Produce Safety rule is not clear about whether the requirement to provide a disclosure statement only applies when product is sold to a customer. Based on a strict reading of the regulation, the requirement applies whenever the product is received by another party in the distribution chain. Therefore, until we get greater clarity from FDA, the requirement to provide a written disclosure statement in order to be exempt from the Produce Safety rule would apply to operations that are vertically integrated and share common ownership.
As discussed in our March column, the Almond Board of California (ABC) has been engaged with FDA on what a grower exemption would look like. The agency has been asked to clarify its intent on whether, under the Produce Safety rule, (1) disclosure statements only need to be provided to “customers”; and, (2) if so, whether a “customer” is someone to whom product is sold and ownership transferred. We will keep you posted on any information we receive on this topic.
This column was prepared by Elizabeth Fawell and Maile Hermida, who are lawyers with Hogan Lovells US LLP in Washington, DC. The FSMA Files column is provided for informational purposes only and does not constitute legal advice.
