Food and Beverage News and Trends - February 7, 2025

This regular publication by AKD Partners lawyers focuses on helping clients navigate the ever-changing business, legal, and regulatory landscape.

New Trump Administration tariffs on Canada, Mexico, and China. On February 1, 2025, President Donald Trump signed three Executive Orders instituting sweeping new tariffs on all goods imported from Canada, Mexico, and China, pursuant to the International Emergency Economic Powers Act. The EOs impose an additional 25-percent duty on all imports from Mexico, an additional 25-percent duty on all imports from Canada – except energy and energy resources from Canada, which will be subject to a lower 10-percent additional duty – and an additional 10-percent duty on all imports from China. Canada, Mexico, and China have all announced retaliatory measures. These tariffs were slated to take effect February 4, 2025, and to continue indefinitely; however, on February 3, 2025, the Trump Administration announced it would delay the imposition of tariffs on Mexico for one month, following Mexico’s commitment to send 10,000 soldiers to its US border.

Furthermore, following last-minute discussions between Prime Minister Justin Trudeau and President Donald Trump on February 3, 2025, the US has paused the imposition of tariffs on Canadian goods for a 30-day period. Canada is a net food exporter that supplies agricultural products to global markets, with the US being its most significant trading partner. If implemented, the US tariff is expected to be highly disruptive to Canada’s agri-food business as well as impacting Canada’s rural, remote, and Indigenous communities that are dependent on food products imported from the US. Retaliatory measures have been proposed by all levels of government, including provincial and municipal levels. For example, Canada’s capital Ottawa advised it would impose a 25 percent tariff on goods from the US, including meat, dairy products, fresh fruits, and cooking oils. Olivia Chow, mayor of Toronto – which has a CAD$78 billion budget – stated, “Where we buy our foods for kids’ programs, for shelters, for childcare centres, matters. It matters where we buy because it is a huge budget and a huge economy.” At the provincial level, among other retaliatory measures proposed, a number of provinces had indicated they planned to cease selling US alcohol products (and in BC’s case, “liquor products manufactured in Republican states”). Given that the sale of alcohol is provincially regulated, this could have a significant impact on the ability of American alcohol companies to sell alcohol products in multiple provinces in Canada. Federal retaliatory actions have been suspended pursuant to the 30-day pause and some premiers have delayed plans to ban US alcohol. Also see our alert, New Trump Administration tariffs on Canada, Mexico, and China. A complete list of all Executive Orders issued by President Trump can be found here.

Our coverage of business-relevant Executive Orders and Actions. AKD Partners’s President Trump Executive Orders hub compiles business-relevant Executive Orders and Executive Actions signed by President Donald Trump as well as our insights on those moves. Among this week’s AKD Partners alerts are “America First Trade Policy”: President Trump orders review ahead of potential tariffs on China and other trading partners; Anticipated designation of international cartels may lead to compliance and enforcement challenges for businesses connected to Mexico and surrounding region; and the weekly White House Executive Orders impacting tax and trade.

FDA names an acting commissioner. On January 24, it became known that Sara Brenner, the FDA official overseeing medical devices, has been named the agency’s acting commissioner. The announcement was found on Brenner’s web page; the FDA declined to comment, citing the communications pause declared by the HHS department. Brenner, a physician and preventive medicine specialist, will lead the agency until a permanent commissioner is installed. President Donald Trump has nominated Johns Hopkins surgeon Marty Makary as FDA commissioner, but he has not yet been confirmed by the Senate. Brenner has been working in the FDA’s medical devices branch, most recently as chief medical officer for in vitro diagnostics and associate director for medical affairs. She has been at the agency since 2019. She helped coordinate diagnostic standards and policy as part of the agency’s COVID-19 response.

Kennedy says at confirmation hearing that US food industries will need new scrutiny. At his January 29 confirmation hearing, Robert F. Kennedy, Jr., President Trump’s nominee to head the Department of Health and Human Services, made it clear that his efforts to reduce chronic disease in the nation would require a close look at the packaged food industry. In his hearing before the Senate Finance Committee, Kennedy, the leader of the administration’s Make America Healthy Again initiative, said that the rising incidence of chronic health conditions like diabetes and heart disease warrants increased scrutiny of the US food supply. “We’re having epidemics of all these chronic illnesses, autoimmune diseases, neurological diseases, allergic diseases, obesity,” Kennedy said. “When my uncle was president, 3% of Americans were obese. Today, 74% of Americans are obese or overweight.” However, Kennedy signaled that he does not intend to take ultra-processed foods off the market, only to ensure that Americans are educated about their health effects.

GAO recommends a national strategy to address foodborne illness. The US Government Accountability Office (GAO) issued a report on February 3 stating that most goals to reduce foodborne illness in the US have not been met. The report is critical of the fragmented nature of oversight of the US food supply, which is governed by more than 30 laws and 15 federal governmental agencies and is supplemented by states, localities, Tribes, and territories. While the report acknowledges that CDC, FDA, and FSIS have taken some steps to develop agency-specific and joint goals related to reducing foodborne illness, “the most recently available data show that FDA and FSIS have not met their goals to reduce foodborne illness.” GAO reiterated its prior recommendation to develop a national strategy to improve the federal food safety oversight system. “A national strategy could establish sustained high-level leadership across food safety agencies over time; identify resource requirements across agencies to achieve crosscutting goals, such as the aforementioned pathogen and foodborne illness reduction goals; and monitor progress in meeting these goals, among other things.” This report was reviewed by HHS and USDA, with comments incorporated.

FDA temporarily stops issuing health-related announcements for the public. In response to a January 21 memo from acting Health and Human Services Secretary Dorothy Fink, the FDA has temporarily stopped issuing regular press releases and announcements on its website and in the Federal Register. The agency usually releases updates on probes of outbreaks linked to contaminated foods every Wednesday, but it did not do so on January 22. As of the FDA's last update on January 15, authorities were investigating multiple outbreaks of E. coli and Listeria. Fink’s memo ordered all federal health agencies to, “consistent with precedent,” stop all new policies, communications and speaking engagements without clearing them with officials from the new Administration until February 1, 2025. An HHS spokeswoman told CBS News, “This is a short pause to allow the new team to set up a process for review and prioritization.” FDA continues to post food and safety related recall announcements issued by the recalling company.

Health Canada publishes modifications to Part B of the Food and Drug Regulations. Health Canada has published the Regulations Amending Certain Regulations Concerning Food Additives and Compositional Standards, Microbiological Criteria and Methods of Analysis for Food. These amendments are aimed at modernizing the regulatory framework, and include two major changes. The first is a Modification to the Lists of Permitted Food Additives, consolidating food additive rules, creating a new adulteration provision and corresponding exemption provisions, repealing obsolete food additive tables, and directly incorporating 15 Lists of Permitted Food Additives that had been published as Marketing Authorizations since October 2012.

TTB proposes new regulations for labeling of alcoholic beverages. On January 17, the US federal Alcohol and Tobacco Tax and Trade Bureau (TTB) put forth two major proposed regulations governing the labeling of wine, distilled spirits, and malt beverages. One of them would require that labels disclose all major food allergens used in the production of alcohol beverages subject to the TTB’s regulatory authority. Under the proposed regulation, unless an exception applies, labels must declare milk, eggs, fish, shellfish, tree nuts, wheat, peanuts, soybeans, and sesame, as well as ingredients that contain proteins derived from these foods, if used in the production of the alcoholic beverage. The second regulation would require label disclosures of the serving size of the product; the number of servings per container; alcohol content as a percentage of alcohol by volume; the number of fluid ounces of pure ethyl alcohol per serving; the number of calories per serving; and the amount of carbohydrates, fat, and protein.

Health Canada issues proposals to modify the Table of Permitted Nutrient Content Statements and Claims (sugar-free). An unintended effect of some of the 2022 changes to the Table of Permitted Nutrient Content Statements and Claims (sugar-free) was that certain chewing gum products became ineligible to make "free of sugars" claims. Those changes included modifications to the caloric requirements to make a "free of sugars" claim, as well as the removal of a chewing gum exemption. Due to those changes, certain chewing gums may no longer be in compliance with the regulations starting on December 31, 2025, when these modifications take effect. To mitigate this unintended effect, Health Canada proposes reintroducing the chewing gum exemption. Since the proposed modification does not introduce new regulatory requirements, no transition period would be necessary.

Health Canada modifies the List of permitted supplemental ingredients to include grape seed extract. Health Canada’s Food and Nutrition Directorate identified grape seed extract for further assessment as a supplemental ingredient since it was present in products eligible for sale under Temporary Marketing Authorizations. Accordingly, it completed a safety assessment that considered the chemistry, nutrition, toxicology, and allergenicity of grape seed extract for use as a supplemental ingredient in supplemented foods. Grape seed extract is derived from the seeds of grapes, Vitis vinifera L. (family: Vitaceae), and is standardized according to the content of oligomeric proanthocyanidins. The available toxicological and clinical evidence supports consuming grape seed extract as a supplemental ingredient up to the equivalent of 100 mg oligomeric proanthocyanidins on a daily basis.

New oyster movement rules for Prince Edward Island to help prevent further spread of MSX. The Canadian Food Inspection Agency (CFIA) issued a statement on February 3, 2025 to advise that, commencing on February 7, 2025, Prince Edward Island (PEI) will be declared an area where the oyster disease MSX is known or highly likely to occur. PEI first detected the MSX (multinucleate sphere unknown), caused by the Haplosporifium nelson parasite, in July 2024. While MSX does not pose a risk to human health, increased sampling and testing have confirmed its presence in PEI waters. This means movement controls will be enforced under the Domestic Movement Control Program (DMCP), restricting the transfer of non-commercial oysters off PEI. Fully grown and processed oysters can still be exported and sold. The CFIA states that this declaration simplifies the CFIA permitting process for PEI oyster growers, harvesters, and processors.

Avian flu update.

• BC farm granted stay of CFIA ostrich cull order. A Canadian federal court judge has obtained an injunction staying a Canadian Food Inspection Agency (CFIA) order to cull 400 ostriches at a British Columbia ostrich farm pending a full court hearing. The CFIA issued the cull order after avian flu was detected in two dead ostriches on December 30, 2024. The ostrich farm applied for a CFIA exemption for animals with rare genetics, but was denied by the CFIA on January 10, 2025. Counsel for the ostrich farm argued in court that the ostriches should be exempt from the cull order because their genetics are the subject of antibody research, making them rare and valuable. The ostrich farm stated that the ostriches were bred over decades to assist in research for a university in Japan on antibodies in ostrich egg yolk that can block infectious diseases. The federal court judge ruled that the cull order will be stayed while the farm seeks a judicial review of the order.
  
  
• On January 23 and 24, more than 3.7 million commercial chickens and more than 86,000 commercial turkeys in Ohio’s Darke and Mercer counties were confirmed positive for H5N1 by the National Veterinary Services Laboratory. More than 6 million commercial birds were culled in Ohio during 2024 due to outbreaks of H5N1.
  
  
• As winter’s influenza season ramps up, on January 23, the CDC issued a Health Advisory urging hospitals and labs to expedite flu testing and to include testing for H5N1 to “help prevent delays in identifying human infections with avian influenza A(H5N1) viruses.” While most physicians and hospitals do not have the specific test required to identify H5N1, they can confirm or eliminate it by checking for other subtypes. The CDC recommends conducting testing within 24 hours, especially for patients in intensive care.
  
  
• On January 24, Crescent Duck Farm, the last remaining duck farm on Long Island, reported that it has ceased operations and begun to euthanize its entire flock of more than 100,000 ducks. The farm, which has been operated by the Corwin family since 1908, supplies nearly 4 percent of all the ducks sold in the US and is favored by high-end restaurants for the quality of its birds, the result of generations of selective breeding. The farm was allowed to keep several thousand duck eggs, which will be sanitized, hatched offsite, and tested for signs of the virus, in hopes of preserving the genetic line. Doug Corwin, co-owner of the farm, said he is reluctant to resume operations without federal approval for vaccinating poultry. More than half of the farm’s workers have been laid off; the remaining staff is in process of sanitizing the facility. The future of the farm remains unclear. Corwin said, “We’re just stunned right now. It’s a very, very sad time.”
  
  
• On January 25, the Indiana State Board of Animal Health reported an outbreak of H5N1 at a commercial egg production facility in Jackson County impacting 2.8 million birds.
  
  
• On January 27, the Pennsylvania Animal Diagnostic Laboratory System reported an outbreak of H5N1 in a commercial egg facility in Lehigh County. State veterinarian Alex Hamberg said that in addition to depopulating hen houses, PADLS has set up a 10-kilometer control and surveillance zone around the affected facility. On the same day, the World Organisation for Animal Health reported the first US outbreak of another dangerous avian flu, H5N9, on a duck farm in California. H5N1, the strain of avian flu that has hit poultry and dairy cow operations across the US, was also found on the same farm.
  
  
• On February 3, Iowa Governor Kim Reynolds issued a disaster proclamation covering O’Brien County following an outbreak affecting 240,000 birds. The proclamation, effective through March 5, will provide more state resources for tracking, detection, and containment efforts.
  
  
• Egg prices in the US are expected to continue their steep climb as the H5N1 virus rampages through US laying facilities. Since January 1 alone, the virus has struck 14.7 million egg-producing chickens across the US – more than were affected in all of 2024, according to the USDA. Karyn Rispoli, managing director of eggs at the price-tracking firm Expana, stated, “Based on the amount of birds that we have lost in the last few months, and the hen population, there just isn’t enough production to support the amount of demand that we have. We’re at a point now where we’re truly in a shortage.”
  
  
• Pennsylvania State Police are reporting the February 1 theft of 100,000 organic eggs from a distribution trailer parked at a grocery store in Greencastle, Pennsylvania. They estimate the value of the stolen eggs at $40,000.