Lauren Handel is back to conclude her series on California’s Proposition 37, today addressing the real logistical challenges businesses will face when the time comes to comply with this law.
If Prop 37 passes (which, according to a recent poll, seems likely), and if it is not stayed or struck down by the courts, manufacturers, retailers, and distributors of food sold at retail in California will have to make some significant and potentially costly changes to ensure they comply by July 1, 2014.
The most obvious implication of Prop 37 is that food labels and retail displays will have to be changed for many foods sold at retail in California. It has been reported that 60 to 70 percent of processed foods sold in U.S. grocery stores contain at least one genetically-engineered ingredient. Because the vast majority of corn, soybeans, and sugar beets produced in this country are genetically engineered, chances are that any product made with an ingredient derived from those crops would come within Prop 37’s labeling requirement.
These are the basic components of virtually every food there is to eat on supermarket shelves. Almost all products would have to be re-labeled on the front or back of the package with the required language, “Partially Produced with Genetic Engineering” or, to the extent the manufacturer is uncertain about whether the product contains genetically-engineered ingredients (or cannot document that it does not contain genetically-engineered ingredients), with the words “May be Partially Produced with Genetic Engineering.”
Food makers will have create special labels for those products destined for the California market, or make California-compliant labels for all products meant for nation-wide distribution.
In addition, for all processed foods—except those that are certified organic, that are derived entirely from a non-genetically-engineered animal, and alcoholic beverages—any language stating or implying that the product is “natural” would have to be removed from the label. As of July 1, 2014, if a retailer has products in inventory that are not properly labeled, they would have to be removed from the shelves and could not be offered for sale to consumers.
In order to enforce the labeling provisions, Prop 37 would impose extensive recordkeeping obligations. Based on the text of Prop 37, any food producer or marketer who wants to avoid labeling their products as genetically engineered (or as potentially containing genetically-engineered ingredients) would have to generate and maintain extensive records to document that their products have not been intentionally produced with genetic engineering. That is because the law would presume that foods have been produced with genetic engineering unless the manufacturer and everyone else responsible for complying with Prop 37—i.e., everyone in the supply chain from the manufacturer to the retailer—obtains a sworn statement from their direct supplier attesting that the food or ingredient has not been knowingly or intentionally genetically engineered and that it has been segregated from food that may have been genetically engineered. So, even if a manufacturer has no reason to believe that its product is made with genetically engineered ingredients, to avoid labeling the product “May be Partially Produced with Genetic Engineering,” the manufacturer would have to obtain an affidavit from each of its ingredient suppliers, maintain those records with some tracking system linking affidavits for particular lots of ingredients to the batches of finished products produced with those ingredients, and provide a similar affidavit to its customer which would have to do the same thing until the product reaches the retailer.
Presumably, by regulation, the California Department of Health could limit some of the recordkeeping burdens by carving out entire categories of foods that would not have to comply with Prop 37’s labeling requirements because no genetically-engineered variety exists in the marketplace (for example, most whole fruits and vegetables) or because the ingredients used in the food (perhaps, as defined by a regulated standard of identity) are not genetically engineered. However, such exemptions would not apply to products made with ingredients derived from corn, soybeans, sugar beets, canola or other crops that are likely to have been genetically engineered or commingled with genetically engineered crops.
Although violations of Prop 37’s requirements would be difficult to police, the consequences for noncompliance would be serious. Foods offered for retail sale in California that do not comply would be deemed “misbranded.” It is illegal to manufacture, sell, offer for sale, store or deliver “misbranded” food. Violators are subject to criminal or civil prosecution, and the product may be seized or embargoed by the state. Violations of Prop 37’s requirements also would be deemed “unfair or deceptive acts” in violation of California’s Consumer Legal Remedies Act, which permits private citizens to sue individually or through a class action for compensatory damages, injunctions, and punitive damages. Significantly, to bring such a suit, plaintiffs would not have to show that they had been damaged by or relied on the defendant’s allegedly deceptive label. Prop 37 also would allow private citizens to sue violators under the Health and Safety Code for injunctions and, if successful, for their costs incurred in investigating and prosecuting the action.
– by Lauren Handel