July 2020 WASHINGTON REPORT
As COVID-19 cases surge in populous states like California, Florida and Texas, leaders in Washington grapple with how to best curb the pandemic without leading to more economic woes. Congress stares down a July 31 deadline for the end of the PPP loan program and extra unemployment aid. A brief push for a police reform bill was quickly tabled until after the election.
President Donald Trump keeps his attention on rebuilding other aspects of the economy, including trade relations and direct aid for farmers. Payments through the U.S. Department of Agriculture began during the first battles of the trade war with China in 2018. They’ve skyrocketed to more than $32 billion this year alone.
Despite efforts to get the economy back on track, the president continues to face disconnect within his administration’s pandemic response. After the CDC released benchmark safety protocols for schools to reopen, Secretary of Education Betsy DeVos was interviewed saying there cannot and should not be a nationwide approach to reopening. A White House memo leaked this week categorizing a laundry list of would-be mistakes made by longstanding National Institute of Allergy & Infectious Disease Director Dr. Anthony Fauci. The move seemed to lay groundwork to demote or fire him from his post on the Administration’s coronavirus task force.
Despite public health risks and an uncertain economy, the American food industry maintained an air of normalcy for consumers during the pandemic. Bakers and other food manufacturers went to heroic lengths to maintain safety for their employees, while providing an ample supply the safest and most nutritious food in the world. IBA was pleased to join in discussions with regulators which resulted in additional accommodations and resources for our members. Updated information is available through the Coronavirus Resource Portal at ibabaker.com.
IBA’S VIRTUAL CONVENTION – MEETING REPORT
The Independent Bakers Association held its 46th Annual Convention via webinar on Tuesday, June 16 through Thursday, June 18. On Tuesday, after noting a quorum of members, IBA Chair Dan Mulloy of 151 Foods called the meeting to order at 1:00pm EDT and thanked the meeting’s sponsors. Attendees introduced themselves and shared their location.
Dan introduced the first guest speaker, Michael Durando, Deputy Administrator of the U.S. Department of Agriculture’s Ag Marketing Service. Mr. Durando and Trevor Findley of his team discussed the agency’s implementation of the Bioengineered (BE) Food Disclosure Rule. He noted the compliance deadline is January 1, 2022 and companies are permitted to comply early. He also noted available resources for food manufacturers as the update their labels, including the AMS BE Questions & Answers page and the agency’s email hotline: firstname.lastname@example.org.
After thanking Mr. Durando, Dan introduced IBA’s second round of guests from FMI: The Food Industry Association. Steve Markenson, Director of Research, and Doug Baker, Vice President of Partnerships, gave attendees a snapshot of the present and future of online grocery retail. Steve outlined how the COVID-19 pandemic led to a spike in online grocery shopping, jumping from 11% in February to around 28% in March and April. Doug highlighted the various types of online retail and their respective pros and cons. In-store shopping services are the easiest to set up—through the grocery store or a third party service like Instacart—but have the highest overhead and slowest turnaround per order. “Dark stores” are previously public grocery stores which remain stocked and employed for online order fulfillment only. Micro fulfillment centers are small automated operations on-site at public grocery stores. Standard fulfillment centers are entire facilities dedicated to online orders. Doug and Steve agreed that the most growth will come in micro- and standard- fulfillment centers, with dark stores serving as an intermediate step. IBA members asked questions about whether and how online shopping will change post-COVID.
After sending off FMI’s speakers, Dan reminded attendees to join for Day 2 of IBA’s virtual convention.
On Wednesday, Dan Mulloy called the meeting to order at 1:15 pm and IBA President Nick Pyle introduced the first speaker. Kevin McLaughlin, Executive Director of the National Republican Senatorial Committee, walked attendees through some of the 35 Senate races to be decided in November. He first noted President Donald Trump’s approval rating, which affects not only his own election prospects but also most Republican candidates. The president’s approval rating is incredibly steady—no drastic drops during the COVID-19 pandemic or in recent weeks. Kevin outlined the most contentious races, including Arizona, Colorado, Georgia, Iowa, Maine, North Carolina and Kansas. Additional races to watch include Montana and Michigan. IBA members can access Kevin’s full presentation by contacting Nick Pyle at email@example.com.
After NRSC, Nick turned it over to IBA Immediate Past Chair Connie Vaughan of McKee Foods to introduce a very special guest: our 2020 Horst G. Denk Legislative Service Award recipient Congressman Chuck Fleischmann (R-TN). In his tenth year in office at the U.S. House of Representatives, Congressman Fleischmann is pleased to maintain a friendship with IBA and others who represent family businesses. Hearing questions from IBA members, he expressed concerns about the prospects of another COVID-19 response bill, after the House passed a hyper-partisan stimulus bill in May. He is active on the Take Back the House movement with other Republicans. Nick told the group that IBA’s Executive Committee will meet in Washington later this year to present the Denk Awards in person to Congressman Fleischmann and Congressman Josh Gottheimer (D-NJ).
Dan reminded the group that tomorrow would be the final day of IBA’s virtual convention.
On Wednesday, Dan called the meeting to order and opened the floor for IBA Vice Chair Bohn Popp of Aunt Millie’s Bakeries to introduce our final guest speaker. Christine Cochran, Executive Director of the Grain Foods Foundation, gave an update on the proposed wheat checkoff program. GFF and the checkoff’s steering committee retained marketing firm O’Keefe Reinhart & Paul to produce a sample campaign based on consumer research. Meeting attendees viewed a video pitch from OKRP staff that outlined the campaign. Because the campaign is still under revision, it is to be kept confidential by meeting attendees until it is ready for review by companies subject to the proposed checkoff. Christine fielded questions from attendees and alerted the group that USDA’s publication of the proposed rule is expected in the next few months.
After thanking Christine for joining, Dan called IBA’s Association Business meeting to order. IBA’s Executive Committee session began with Secretary Chris Mulloy of Top Quality Baking presented the minutes from IBA’s Spring Telemeeting in April. The Executive Committee voted to approve the minutes as read.
The Executive Committee then considered IBA’s future events. There was consensus that IBA’s Fall Business Meeting may need to be virtual, rather than at PACK Expo in Chicago in November. The Executive Committee agreed that 2021 IBA meetings should be in person.
During the Washington Update, IBA General Counsel Andrea Hart outlined several COVID and non-COVID related policy projects.
She shared IBA’s legislative priorities for the next response package, including liability protections and multiemployer pension reform. She highlighted industry resources published by the Food & Drug Administration and U.S. Department of Agriculture. FDA offered new guidance for food labeling in the event of ingredient substitutions due to COVID, including unbleached flour and enrichment ingredients. Andrea noted that the Food & Beverage Issue Alliance submitted a supplemental request for a one year extension of the BE Food Disclosure rule.
Other IBA projects that were paused during the pandemic are slowly beginning to regain steam, including preservation of independent contractor status at the federal and state level. The 2020 Dietary Guidelines review process was officially delayed by one month. The final Guidelines will likely not be published until a few months into 2021.
In January, IBA retained Washington, DC-based online marketing firm Rosé Media to manage its Sugar Refund public interest campaign. Nick thanked the IBA members who generously contributed the full value of the retainer, which will need to be renewed in July. Sophie Zeigler joined the group to highlight the campaign’s growth since investing in online advertising. She noted more than 6 million people have seen the ads, driving more than 163,000 new page views to sugarrefund.com. IBA will harness the revamped Sugar Refund campaign to guide grassroots activism in support of sugar reform before the next Farm Bill in 2022.
Nick Pyle shared his latest update on all 2020 elections. He noted that BakePAC is strong and will be able to contribute to relevant House and Senate races. IBA members can expect to receive state-specific voter registration and voting deadline information via postal mail in July.
Dan Mulloy then opened the floor for new business. Hearing none, he adjourned the meeting at 3:05 pm.
IBA members will hear from the Executive Team later this summer about the format of the fall meeting, which is currently scheduled for Tuesday, November 10 in Chicago, Illinois.
DIETARY GUIDELINES COMMITTEE HOLDS FINAL PUBLIC MEETING
The Dietary Guidelines Advisory Committee held its final of five public meetings to discuss its draft report with stakeholders on June 24. The Committee is expected to finalize and submit its advisory report to the Secretaries of USDA and HHS later this month. The agencies will jointly post the final report for public comment. IBA and others in the Grain Chain coalition will submit comment on the final report.
The Grain Chain was pleased to see the Committee continues to recognize the benefits of enriched and whole grains as part of a nutritious diet. Prior versions suggested that no more than 10% of energy intake be from added sugars. This year's advisory report recommends this be reduced to 6% of energy.
Throughout the Committee's review process, nutrition activist groups requested the advisory report be postponed or altered because of perceived bias among its members. These calls came despite a statutory requirement that the Committee consider best-available science as well as public comment--more than 62,000 comments so far. In response to the complaints, USDA's Food & Nutrition Service Administrator Pam Miller said in a statement: “Throughout the entire 2020-2025 dietary guidelines process, we have relied on the nation’s leading scientists and dietary experts to inform our development of science-based guidelines and have taken numerous steps to promote transparency, integrity, and public involvement."
Despite significant stakeholder participation in the Dietary Guidelines process, the four-decades running publication hasn't shown to significantly impact public health. Food Safety News reports that in the past 20 years, the prevalence of obesity increased from 30.5 percent to 42.4 percent, and the prevalence of severe obesity increased from 4.7 percent to 9.2 percent. The percentage of adults with diabetes increased with age, reaching 26.8 percent among those aged 65 years or older. About half of adults, 45 percent, with uncontrolled hypertension have a blood pressure of 140/90 mm Hg or higher.
After the publication of the 2020 version, which is expected the first of next year, lawmakers will again hear from stakeholders on whether to alter the publication's underlying legislation. Though it can expect a push for the Guidelines to directly advise the roughly 37 million American adults with one of the above conditions, Congress must consider the overall benefit of the publication when voting on whether to increase its breadth.
IBA and the Grain Chain will continue to stay involved with the 2020 Guidelines process and any subsequent congressional action.
FEDERAL COURT ENJOINS CALIFORNIA’S PROP 65 LABELS FOR GLYPHOSATE
In a landmark decision, a federal district court in California banned the state's EPA Office of Environmental Health Hazard Assessment (OEHHA) from enforcing on-package labeling of glyphosate-containing products under Prop. 65 regulations. The court found that enforcing the labeling rule on herbicides like Roundup violates the First Amendment protection against compelled speech.
In the June 25 ruling, the court followed Supreme Court precedent that the government may only compel private businesses to include information that is "purely factual and noncontroversial" on product labels. It also aligned with two 2019 Ninth Circuit cases that held California municipalities violated the First Amendment by compelling warning labels on sugar-sweetened beverages and cell phones.
The case is significant in the overall push to mitigate damage caused by the Prop. 65 regulatory scheme. California's OEHHA has not announced an appeal to the Ninth Circuit at this time.
Here are key aspects that IBA will note in future Prop. 65 outreach:
The decision marks the first case to find a Prop. 65 labeling requirement violates the First Amendment, noting that OEHHA's regulatory standards for labeling glyphosate as a carcinogen are not "uncontroversial."
The court noted that the USEPA sent a letter to manufacturers of glyphosate-containing products that bearing a Prop. 65 warning would constitute "misbranding." IBA and other food industry advocates are proponents of reasonable federal agency intervention to prevent Prop. 65 overreach.
The court did not overturn OEHHA's placement of glyphosate on the Prop. 65 list, only the labeling aspect.
The ruling applies to products that intentionally contain glyphosate--it can be inferred that other products, including foods that have trace amounts of glyphosate from cross-contact, would also not be required to bear a label based on the presence of glyphosate.
Thanks to contributions from member-companies, IBA now has unlimited access to Prop. 65 Clearinghouse--an all-inclusive portal for industry. The portal includes legal documents, enforcement materials, a regulatory calendar and more. Our premier account includes unlimited access to these resources and we are permitted to share them with IBA members! If you are interested to view a specific resource, contact Andrea Hart.
FOOD INDUSTRY SUBMITS COMMENT ON JUNE MEXICAN LABELING PROPOSALS
IBA and others in the Food & Beverage Alliance submitted public comment to Mexico's regulatory agency regarding new aspects of its massive front-of-pack food labeling regulation. The new proposals, published June 2 by the Comision Nacional de Mejora Regulatoria (CONAMER) add several provisions to the 2019 proposed rule, which will require nutrient-content warning labels on some food packaging and marketing materials. The original rule was finalized in March, with a compliance deadline of October 1, 2020. The supplemental proposed rule did not include an extension of the October deadline.
In its comment, FBIA addressed the rule's lack of adherence to scientific evidence and public input, as well as its conflict with USMCA and broader trade policy. Citing COVID-19 and the complexity of the rule, FBIA urged CONAMER to extend the compliance deadline well beyond the original seven month period.
The National Association of Manufacturers also submitted comment in support of the food industry's position. NAM worked closely with the U.S. Trade Representative at a series of World Trade Organization meetings in 2019 and earlier this year to align Mexico's other trade partners. The EU, Canada, Guatemala, Chile and others expressed formal concerns about the trade burden created by the rule. NAM and the food industry will push the Trump Administration to address the situation during Mexican President Andres Manuel Lopez Obrador's visit this month.
IBA will continue to support efforts to repeal, dilute or slow the rule and its impact on the baking industry. Contact Andrea Hart to hear more details.
FDA RELEASES NEW ERA OF SMARTER FOOD SAFETY BLUEPRINT
The U.S. Food & Drug Administration published its New Era of Smarter Food Safety Blueprint. FDA Commissioner Stephen Hahn and Deputy Commissioner for Food Policy & Response Frank Yiannas released a joint video introducing the agency's New Era plan. They highlighted that our food system is in a "food revolution" and FDA intends to focus on digital traceability and coordination with industry, while fulfilling the requirements of the Food Safety Modernization Act (FSMA). FDA's goal is to maintain America's standard of having the safest food supply in the world.
As FDA works on its action items, IBA will support regulatory policy that is flexible and efficient for independent businesses in the baking industry. IBA and others in the Food & Beverage Issue Alliance will reach out to FDA leaders to create an ongoing, candid dialogue about the agency's plans.