This past week, several regulatory and self-regulatory consumer protection actions made headlines affecting the retail industry.
FDA Continues to Reverse Course on Obama-Era Food Label Regulations
After delaying the Menu Labeling Rule effective date to May 7, 2018, the FDA also has indefinitely delayed the launch of changes to the Nutrition Facts labels. These updates, which include information regarding added sugars and emphasized caloric counts, originally were planned to go into effect in July 2018. Despite the delay, a number of manufacturers already have rolled out new labels.
Pennsylvania Appeals Court Upholds Philadelphia Tax on Sweetened Beverages
The Philadelphia Beverage Tax (“PBT”) has survived a challenge in the Commonwealth Court of Pennsylvania. The American Beverage Association challenged the PBT, which imposes a tax of 1.5¢ per fluid ounce of nonalcoholic beverages with added sugars. Beverages subject to the tax include soda, sports drinks, non-100% fruit drinks and presweetened coffee or tea.
The court denied the American Beverage Association’s challenge, which alleged that the PBT ran afoul of state and federal law. Notably, the court found that because the PBT is generally payable by beverage distributors rather than consumers, it does not interfere with the state-level sales tax or with Federal Food Stamp regulations. The American Beverage Association has indicated it will appeal the decision.
Marketers of “Dream Tents” to Stop Making Unsupported Representations in TV Ads
After an investigation by the Children’s Advertising Review Unit (“CARU”), Ontel Products has agreed to discontinue claims that “Dream Tents” can help alleviate fear of the dark and promote more restful sleep in children.
Ontel Products aired television ads in which a young girl goes to her parents’ room at night, with a voiceover saying, “No parent wants his or her child to be afraid of the dark. Dream Tents are comforting. They can help alleviate fears of the dark and they can promote a restful night’s sleep.” CARU found that the ad included two unsubstantiated claims: (1) Dream Tents help alleviate fears of the dark, and (2) Dream Tents help promote a restful night’s sleep. As a result, CARU recommended that Ontel discontinue the claims.