As we discussed in a recent post, Vermont’s first-in-the-nation GMO labeling law goes into effect July 1, 2016. As you probably know by now, Act 120 (as the law is commonly known) generally requires food manufacturers and retailers to label foods produced in whole or in part with “genetic engineering,” and prohibits such foods from being described as “natural.”  Last April, the Vermont Attorney General issued a set of regulations implementing the law, and more recently, issued comments on those regulations further clarifying the law’s requirements.  The new regulatory scheme is starting to take shape, but food manufacturers and retailers are likely to face a host of complicated issues in determining what the law requires of them.  Here, we answer a few basic questions and note some potential complications that those subject to the law might experience:

What is “genetic engineering”?

The definition in Act 120 is somewhat similar (though not identical) to the definition of “genetically modified organism” under the European Union’s GMO labeling law and lists what we understand to be the primary scientific processes through which the “genetic information of an organism” can be changed by means other than “traditional breeding techniques, conjugation, fermentation, traditional hybridization, in vitro fertilization, or tissue culture” (all of which are excluded from the definition).

What is Act 120’s basic labeling requirement?

Generally, the law provides that any food “offered for sale by a retailer” after July 1, 2016 must be labeled if it is “offered for retail sale in Vermont” and “entirely or partially produced with genetic engineering.”  The Attorney General has made clear that the law applies only to foods offered for sale at “retail premises” physically located in Vermont, though that definition is quite broad, and includes “retail outlets housed in manufacturing facilities, farm stands, vending machines and mobile vendor kiosks.”  Interestingly, the Attorney General has also taken the position that foods must be labeled if offered for retail sale in Vermont even if the product was not originally distributed in Vermont.

What are the specific labeling requirements for different types of foods?

The actual labeling requirements vary somewhat, depending on whether a food is considered “packaged” or “unpackaged” under the law and whether the food is considered “processed” or a “raw agricultural product.”  The Attorney General’s rule organizes the requirements by their application to retailers and manufacturers.

Manufacturer Requirements
Food manufacturers are responsible for labeling only “packaged foods,” and depending on the type of food at issue, the label must specify that a food is “Produced with Genetic Engineering” (for foods with more than 75% GE materials by weight), “Partially Produced with Genetic Engineering,” or in some circumstances, “May be Produced with Genetic Engineering.”  On packaged, processed foods, these disclosures must (1) be located on the package in a place that can be easily found by consumers viewing the outside of the package, and (2) be in a font size related to the “Serving Size” and ingredient list requirements under federal law.  The Attorney General has commented that these requirements serve to ensure that a customer seeking the labeled information must easily be able to find it.

Retailer Requirements
Food retailers are generally responsible for labeling “unpackaged raw agricultural commodities” (mainly produce and the like) and “unpackaged processed foods” (mainly bulk, deli or bakery foods).  Depending on the type of food at issue, these products generally must be labeled on the “bin, shelf or container in which the food is displayed,” and again, the label must specify whether the food was produced in whole or in part with genetic engineering, or in some circumstances, whether the food “May be Produced with Genetic Engineering.”  With respect to the form of the label, the rules are a little less specific, and require only that the label be “immediately adjacent” to the sign identifying the product (or, in the absence of such a sign, on the product bin or shelf itself) and that the label itself be “clear and conspicuous.”

Are there exemptions from the labeling requirement?

Yes.  In addition to foods that are “certified as not produced with genetic engineering” (see below for more on the certification requirement), and foods which contain only a “minimal” amount of GE ingredients (less than 0.9% by weight), the law also contains a variety of other specific exemptions, including:

• Foods “consisting of or derived entirely from” animals (including processed dairy products);
• Certain foods requiring USDA labeling;
• Foods that would be considered free from Genetic Engineering were it not for “processing aids” or “enzymes” as those terms are defined in the Act;
• Alcoholic beverages, as defined by Vermont law;
• Foods certified as “organic” or verified as not having GMOs by an organization authorized to make such verifications;
• Foods for immediate consumption; and
• “Medical Food,” as defined under federal law.

Again, the Attorney General has issued a set of comments helping to further define some of these exemptions, but food manufacturers are encountering ambiguities already, particularly with respect to whether and under what circumstances certain of the exemptions can be considered together in deciding whether a final product is likely to be considered exempt from the labeling requirements.

What are the documentation requirements?  Can manufacturers and retailers rely on certifications from suppliers?

Generally, the Attorney General’s rules require manufacturers to retain records “sufficient to demonstrate their compliance with the law” for three years from the date the manufacturer sells the food (for retailers, the retention period is one year).  The documentation must be sufficient to show (1) that a product was properly labeled; (2) that an exemption applies; or (3) that a food was not “knowingly and intentionally produced with genetic engineering,” meaning  there is no variety of that food produced with GE commercially available and it was not commingled with foods produced with GE.

Also, for purposes of showing that a food does not contain any GE-produced materials, the law makes clear that a manufacturer or retailer may rely on a “sworn statement” from whomever the food was produced (or, in the case of food produced overseas, from whomever the food was sold) that affirms (1) the food “was made or grown from food or seed that has not been knowingly or intentionally produced with genetic engineering” and (2) the food “has been segregated from and has not been knowingly or intentionally commingled with food or seed that may have been produced with genetic engineering.”  In its comments on the labeling rules, the Attorney General provided a copy of a sample of a sworn statement that would satisfy this requirement.  It can be found here as Appendix A to the Annotated Rules.

What are the prohibitions on “natural” labeling?

As any follower of recent developments in product advertising knows, the use of “natural” claims is being challenged in a variety of settings across the country.  Act 120 weighs in on this hot button issue by making it unlawful to label products containing GMOs (unless they are otherwise exempt from the law’s labeling requirement) with terms like “natural,” “all natural,” or “naturally made,” finding that such terms are likely to “mislead a consumer” in the context of food produced with genetic engineering.

How will the law be enforced?

Again, the Vermont Attorney General is in charge of enforcing Act 120’s requirements, though the law also provides a private right of action for any person aggrieved by a violation.  At present, there is no guidance addressing how violations will be discovered, but we expect that the Attorney General will rely, at least at first, on consumer complaints about potential violations.

Enforcement is set to begin when the law takes effect on July 1, 2016, though there is a presumption that packaged, processed foods offered for retail sale before January 1, 2017 were packaged and labeled prior to the law taking effect.

Penalties for violating the law can run up to $1,000 per SKU (or, under the regulations, for each “uniquely named, designated, or marketed product”) per day.

Where can I get more information?

The text of Act 120 can be found here.  Links to the Attorney General’s regulations and comments are included in the introduction above.  In addition, attorneys in SRH Law’ food and green marketing practices have been studying the law and are available to assist retailers and manufacturers with more detailed questions.

Disclaimer:  This article is provided for general informational purposes only and is not intended to constitute legal advice or to substitute for the advice of an appropriately licensed attorney.  If the reader requires legal advice, s/he should contact a competent attorney licensed to practice in the reader’s jurisdiction.  This article is general in nature and may not apply to particular factual or legal circumstances.  The information presented is not an invitation to, and does not form, explicitly or implicitly, an attorney-client relationship.