Uniform Compliance Date For Food Labeling Regulations

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Chapter I

[Docket No. 96N-0094]

Uniform Compliance Date For Food Labeling Regulations

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

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SUMMARY: The Food and Drug Administration (FDA) is establishing January

1, 1998, as its new uniform compliance date for all food labeling

regulations that are issued after the publication of this final rule

and before January 1, 1997. FDA has periodically announced uniform

compliance dates for new food labeling requirements to minimize the

economic impact of label changes. In 1992, FDA suspended this practice

pending the issuance of regulations implementing the Nutrition Labeling

and Education Act of 1990 (the 1990 amendments). With the adoption and

implementation of those regulations, FDA is reinstating its previous

practice of periodically announcing, as final rules, uniform compliance

dates for food labeling regulations.

EFFECTIVE DATE: December 24, 1996.

FOR FURTHER INFORMATION CONTACT: Gerad L. McCowin, Center for Food

Safety and Applied Nutrition (HFS-150), Food and Drug Administration,

200 C St. SW., Washington, DC 20204, 202-205-4561.

SUPPLEMENTARY INFORMATION:

I. Background

In the Federal Register of April 15, 1996 (61 FR 16422), FDA

published a notice of proposed rulemaking entitled ``Uniform Compliance

Date for Food Labeling Regulations'' (hereinafter referred to as the

compliance date proposal) to establish a new uniform compliance date of

January 1, 1998. FDA proposed that the new uniform compliance date

would apply to all FDA regulations issued after publication of a final

rule to the rulemaking and before December 31, 1996, that require

changes in food labels or labeling, except where special circumstances

require a different compliance date. The agency also proposed to

reinstate its previous practice of periodically announcing uniform

compliance dates for food labeling regulations by final rule.

Interested persons were given until July 1, 1996, to comment.

FDA received five letters, each containing one or more comments,

from trade associations and other representatives of the food industry,

in response to the compliance date proposal. All of the comments

supported the proposal generally. Some comments suggested modifications

or revisions of aspects of the compliance date proposal. A summary of

these comments and the agency's responses are provided below.

II. Comments

A. Uniform Compliance Date

1. Four comments opposed establishing January 1, 1998, as the next

uniform compliance date on the grounds that it resulted in a

``compliance period'' that at its shortest possible length would be

only 12 months long. The comments used the term ``compliance period''

to refer to the time interval between the publication of a final rule

and the uniform compliance date; e.g., a final rule that publishes on

December 30, 1996, would have a ``compliance period'' of just over 12

months before the January 1, 1998, uniform compliance date. Two of the

comments suggested that the compliance period should be a minimum of 18

months and applicable to products labeled on or after the compliance

date. One of these comments stated that the 18-month period for the

final rules implementing the 1990 amendments provided sufficient time

for manufacturers to process the required label changes such that

incremental costs were minimized.

One of the comments stated that 2 years would be more appropriate

if FDA insists on having the compliance date apply to the initial date

of introduction of the food product into interstate commerce. This

latter comment supported its arguments by including with its submission

information on the costs of complying with the proposals to implement

the 1990 amendments that it had developed and submitted as comments in

response to FDA's ``Regulatory Impact Analysis of the Proposed Rules to

Amend the Food Labeling Regulations,'' which published in the Federal

Register of November 27, 1991 (56 FR 60856). The comment noted that the

evidence submitted had persuaded FDA to establish a compliance period

of 18 months for those regulations. The other two comments also

suggested a 2-year compliance period. One of the comments argued that 1

year does not provide manufacturers with sufficient time to manage and

exhaust existing label inventories. The comment stated that it

anticipated that most manufacturers would be forced to request an

extension of the uniform compliance date if FDA's final rule provided

only a 12-month compliance period.

FDA disagrees with the comments. A compliance period that is 18

months or 2 years at its shortest is too long.

The agency points out that the comments are primarily concerned

with the minimum time that a firm might face in bringing its labeling

into compliance if a labeling final regulation were to publish at the

end of a compliance period cycle, e.g., December 30, 1996.

Manufacturers would have 1 year and 1 day to comply with the January 1,

1998, effective date. It is this time period that the comments claim is

inadequate.

However, in establishing the uniform compliance date, FDA must

consider the costs and benefits to both the food producer and the

consumer. That is why

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the agency did not choose a minimum compliance period of only 6 months.

A compliance period of 6 months would increase the benefit to the

consumer but would result in an even greater cost to the food producers

than caused by a compliance period of 12 months. Although a lengthier

compliance period would reduce the cost to food producers, it would

delay implementation of the labeling changes thus decreasing the value

of any benefits to the consumer.

The agency points out that the minimum compliance period of 1 year

is the same compliance period that it used for all of its uniform

effective date final rules, dating back to the 1970's, until it issued

the labeling regulations that implemented the 1990 amendments. The

agency is unaware, nor has anyone submitted, any information to

demonstrate any problems with respect to bringing labels into

compliance with the various uniform effective dates that it had

established over the period of approximately 20 years during which it

had announced uniform compliance dates. While there were instances in

which the agency granted extensions beyond the uniform compliance date,

generally firms came into compliance with little complaint to the

agency. The agency is merely, as it proposed, reinstating its former

practice.

The agency acknowledges that an 18-month compliance period was

given for the labeling final rules implementing the 1990 amendments.

However, the agency points out that additional time was necessary in

that instance because of the extensive changes being made in the

labeling requirements, the complicated nature of those changes, and the

fact that the changes affected the entire food industry. Future food

labeling regulations promulgated by FDA will not likely be as

complicated or as comprehensive. If such a situation were to arise, the

agency can and will adjust the compliance period to fit that particular

situation.

FDA recognizes that some manufacturers believe that a 12-month

compliance period for a particular regulation might create an economic

hardship. The agency points out that any final rule that it promulgates

is preceded by a proposal setting forth the labeling changes the agency

intends to require. The proposal, as a general rule, precedes the final

rule by a year or more and, therefore, gives manufacturers more than

ample notice that they should start thinking about how they will

respond if the changes are finalized.

Finally, the agency reiterates its statement in the proposal

concerning its willingness to consider comments (to a particular

labeling proposal) as to why a particular labeling regulation should

not be subject to the uniform compliance date and modify the effective

date for an individual regulation accordingly.

B. Applicability of Compliance Date

2. One comment urged that FDA make clear in its final rule the

basis for the uniform compliance date, i.e., whether the uniform

compliance date would apply to products labeled on or after the

compliance date or to products introduced into interstate commerce on

or after the compliance date. The comment stated that, if the

compliance date applied to products labeled on or after that date, 18

months would be adequate as the minimum compliance period. If, however,

the compliance date applies to the initial date of introduction of the

product into interstate commerce, the comment recommended that FDA

establish the uniform compliance date as being no shorter than 2 years

after any such labeling regulations are published as final rules. The

comment argued that 2 years would provide an adequate opportunity for

many food processors, especially those who manufacture seasonal

products, to exhaust remaining label and package inventories before

they would be required to introduce products with new labels and

packages into interstate commerce.

The agency advises that the uniform compliance date will apply to

food products initially introduced into interstate commerce on or after

that date. FDA does not agree with the suggestion that the compliance

date be tied to the date that products are labeled. The agency has for

many years used the date of initial introduction into interstate

commerce as the effective date for compliance with regulations because

the Federal Food, Drug, and Cosmetic Act (the act) applies to products

when they are introduced or delivered for introduction into interstate

commerce. Using the date of initial introduction into interstate

commerce is a more efficient enforcement approach because this date is

easier for FDA to determine (e.g., from shipping documents) than the

date the food was labeled (e.g., from manufacturers' records that are

not necessarily available to the agency). An exception to this approach

was in the case of the 1990 amendments that established the effective

date as the date on which the label was applied to the food (see

section 10(a)(2) of the 1990 amendments). However, there is no

indication in the 1990 amendments or in their legislative history that

Congress intended this exception to change the approach to effective

dates for labeling changes that the agency has traditionally used.

C. Safe Harbors

3. One comment, which stated that the compliance date should apply

to the date the food product is packaged, requested that the agency

provide ``safe harbors'' for companies to follow in determining when

their products will have been considered to have been introduced into

interstate commerce if the agency concludes that the uniform effective

date should be applicable to the initial introduction of a food product

into interstate commerce. The comment stated that doing so would

provide companies some assistance in coordinating label changes and in

minimizing their costs.

FDA presumes that the comment concerning ``safe harbor'' is asking

FDA to define what is meant by ``initial introduction into interstate

commerce.'' In other words, the comment is asking FDA to advise what a

firm has to do to initially introduce a product into interstate

commerce before a new uniform compliance date so that the product would

not be subject to the requirements that become effective on the new

uniform compliance date. FDA is concerned that an attempt to provide a

detailed discussion of all instances that are considered or are not

considered to represent ``initial introduction into interstate

commerce'' would be incomplete and, therefore, misleading. A clear

understanding of this term is available from the act and the applicable

case law. Thus, FDA is not defining ``initial introduction into

interstate commerce'' in this final rule.

D. Harmonious Uniform Compliance Date for U.S. Department of

Agriculture (USDA)-FDA Food Labeling Regulations

4. One comment urged that FDA work with USDA-Food Safety and

Inspection Service to establish a harmonious uniform compliance date

for all food labeling regulations.

FDA agrees to the extent both agencies are issuing regulations that

will affect similar foods or address similar concerns, it would be best

for FDA and USDA to have a consistent uniform compliance date. However,

FDA does not agree that it is necessary as part of this rulemaking to

``establish a harmonious uniform compliance date for all food labeling

regulations'' issued by the two agencies. Where it is appropriate, FDA

works with USDA to coordinate, to the extent possible, the issuance of

food labeling regulations. For example, in issuing regulations on

[[Page 67712]]

the nutrition labeling of foods, FDA and USDA coordinated the

publication of proposals and final rules, including consideration of

the best approaches for each to use to address specific issues, such as

the nutrition facts format and the wording of nutrient content claims.

However, even then, because of differences between the two agencies and

their authorities, there were slight differences in the effective dates

for their respective final rules concerning nutrition labeling.

Moreover, to establish harmonious compliance dates as suggested by

the comment would require a separate rulemaking on the part of USDA,

which would act to delay final action on this rulemaking. Therefore,

FDA concludes that it is not necessary or appropriate at this time for

FDA and USDA to establish a harmonious uniform compliance date for

their labeling regulations. FDA notes that comments on future FDA or

USDA proposals are free to urge consistent effective dates as they

consider appropriate.

E. Establishment of Future Uniform Compliance Dates

5. Three of the comments specifically supported the agency's

returning to its practice of periodically establishing uniform

compliance dates and doing so as final rules without providing an

opportunity for public comment. No comments were opposed.

Having received only favorable comments that it reinstate this

practice, FDA is announcing that it will establish future uniform

compliance dates for its food labeling regulations under the provisions

of Sec. 10.40(e)(1) (21 CFR 10.40(e)(1)). Section 10.40(e)(1) does

provide for the submission of comments to the final rule. FDA will

publish before December 31, 1996, a final rule establishing the next

uniform compliance date of January 1, 2000, for all final regulations

published in the Federal Register between January 1, 1997, and December

31, 1998. After that, every other year, FDA will publish additional

final rules to establish subsequent uniform compliance dates.

III. Environmental Impact

The agency has determined under 21 CFR 25.24(a)(11) that this

action is of a type that does not individually or cumulatively have a

significant effect on the human environment. Therefore, neither an

environmental assessment nor an environmental impact statement is

required.

IV. Analysis of Impacts

FDA has examined the economic implications of this final rule as

required by Executive Order 12866 and the Regulatory Flexibility Act (5

U.S.C. 606-612). Executive Order 12866 directs Federal agencies to

assess all costs and benefits of available regulatory alternatives and,

when regulation is necessary, to select the regulatory approach that

maximizes net benefits (including potential economic, environmental,

public health and safety effects; distributive impacts; and equity).

Executive Order 12866 classifies a rule as significant if it meets any

one of a number of conditions, including having an annual effect on the

economy of $100 million, or adversely affecting in a material way a

sector of the economy, competition, or jobs, or if it raises novel

legal or policy issues. If a rule has significant impact on a

substantial number of small entities, the Regulatory Flexibility Act

requires agencies to analyze options that would minimize the impact of

that rule on small entities.

Four of the comments stated that a uniform compliance date that

provided a minimum compliance period of 12 months would have a

substantial financial impact on the food industry.

This final rule will potentially reduce costs by providing a

uniform compliance date that will provide firms with the opportunity to

combine required label changes in one label redesign effort rather than

potentially suffering from sequential, duplicative efforts. Alternative

approaches that FDA considered included setting a uniform compliance

date such that firms have either more or less time to comply with

labeling regulations. In general, providing a minimum compliance period

of 2 years would be half as expensive as the proposed compliance date

but would delay implementation of labeling changes, thus decreasing the

value of any benefits. A minimum compliance period of 6 months,

although providing earlier labeling changes that would increase the

value of the benefits, would be twice as expensive as the proposed 1

year.

For future labeling requirements, FDA will assess the costs and

benefits of the uniform compliance date as well as the options of

setting alternative dates, especially with regard to the impact on

small entities. Because the establishment of a uniform compliance date

imposes neither costs nor benefits, the agency certifies that the final

rule is not a significant rule as defined by Executive Order 12866, and

finds under the Regulatory Flexibility Act that the final rule will not

have a significant economic impact on a substantial number of small

entities. Similarly, FDA has determined that this rule is not a major

rule for the purpose of Congressional review (Pub. L. 104-121).

V. Conclusion

Having considered all comments to the proposal on this matter, the

agency has decided that a new uniform compliance date of January 1,

1998, should be established for future FDA regulations requiring

changes in food labels where special circumstances do not justify a

different compliance date. The agency has selected January 1, 1998, to

ensure adequate time for implementation of the pending changes in food

labeling.

The agency generally encourages industry to comply with new

labeling regulations as quickly as is feasible, however. Thus, when

industry members voluntarily change their labels, it is appropriate

that they incorporate any new requirements that have been published as

final regulations up to that time.

The new uniform compliance date will apply only to final FDA food

labeling regulations published before January 1, 1997. Those

regulations will specifically identify January 1, 1998, as their

compliance date. If any food labeling regulation involves special

circumstances that justify a compliance date other than January 1,

1998, the agency will determine for that regulation an appropriate

compliance date that will be specified when the regulation is

published.

This final rule is not intended to change existing requirements

for compliance dates that have been set in final rules. Therefore, all

final FDA regulations that have published in the Federal Register but

that are not yet effective and that have effective dates other than

January 1, 1998, will still go into effect on the date stated in the

respective final rule.

FDA is making this document effective upon publication because of

the short time to January 1, 1997.

In the absence of comments to the contrary and following

publication of this final rule, FDA will return to its former practice

of establishing uniform compliance dates through issuance of a final

rule without the opportunity for comment. Thus, for example, on or

before December 31, 1996, FDA will issue a final rule establishing

January 1, 2000, as the uniform compliance date for regulations

published in the Federal Register between January 1, 1997, and December

31, 1998. Subsequently, on or before December 31, 1998, FDA will issue

a final rule establishing January 1, 2002, as the uniform compliance

date for regulations published in the Federal

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Register between January 1, 1999, and December 31, 2000.

Dated: December 13, 1996.

William B. Schultz,

Deputy Commissioner for Policy.

[FR Doc. 96-32552 Filed 12-23-96; 8:45 am]

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