On Friday, US President Barack Obama signed into law the Safe and Accurate Food Labeling Act – a new law which will require food manufacturers to clearly label products which contain genetically modified organisms, or GMOs. The United Stated Department of Agriculture has been tasked with developing an enforcement framework for the new law within the next two years, though companies will likely be able to choose between a written label, a USDA-designed symbol or a scan code on their packaging in order to comply with the new disclosure rules. Critics of genetic modification of foodstuffs have already come out swinging against what they perceive as a lack of clout in the new law, which may render the GMO disclosure of many food items inaccessible to the 100 million Americans without smartphones unable to ‘scan’ as instructed on packaging. However, even with wriggle room there is a lot of in-house lawyers to be thinking about while the USDA nuts out exactly how compliance will look.
Compliance challenges
For general counsel without a clear view of the supply chains for their company’s products, the new law creates a minefield of potential compliance issues. As former Contessa Premium Foods general counsel Greg Morrow explains in Corporate Counsel, ensuring quality and compliance throughout every stage of the supply chain is crucial if companies are to avoid taking on liability for slip-ups along the line. Having open and clear communication about standards before deciding to source from a supplier as well as comprehensive monitoring mechanisms throughout the relationship can help ward off unwanted surprises. ‘I’ve spent a considerable amount of time of time on-site – on farms, at ponds, on fishing vessels, to make sure my company had a compliance level that was second to none,’ said Mr Morrow, who worked at the helm of Contessa’s legal team between 2006 and 2011 before joining Squire Patton Boggs.
Risks to reputation
As visibility around GMO disclosure grows, companies which produce, manufacture or sell food products will need to keep a wary eye on the potential reputational backlash caused by compliance failures. Even though the new GMO labelling laws will likely only apply to producers and manufacturers, retailers still need to be wary of the impact that stocking non-compliant products might have on their company’s brand. Labelling advocacy group Just Label It estimates that as many as 90 per cent of US citizens support labelling foods which contain GMOs – a small hint towards the potential scale of the fallout should GMO products sneak through undeclared.
Read More: Lexology; Corporate Counsel; Modern Farmer
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