IN THE NEWS: On AUG 11, 2019
- A number of states have proposed or enacted labelling laws that would prohibit companies from Beyond Meat to Oatly from using words like "burger" and "milk" to describe products.
- The ACLU and Plant Based Foods Association argue that these laws violate first amendment rights to free speech. Three cases that combat such laws are currently pending in Arkansas, Mississippi, and Missouri.
- Companies would be hit with huge costs if they have to adhere to different labelling laws across states.
As demand for plant-based meat and dairy alternatives is booming, so is legislation around how such products can be labelled in grocery stores – and lawsuits protecting the free speech rights of companies that make them.
In nearly half of the states in the US, bills have been announced or passed that would monitor how products derived from plants are labelled when sold to consumers. A number of the labelling laws try to make it illegal to use works like "milk," "burger," and "rice" to describe anything made from plants.
The reasoning? States argue that it is misleading to use words associated with meat or dairy to describe a product that does not come from an animal.
"A food product made of insect protein should not be deceptively labelled as beef," wrote Andy Gipson, the Mississippi Commissioner of Agriculture and Commerce, in a statement on Twitter in response to a lawsuit brought against Mississppi's label law. "Someone looking to purchase tofu should not be tricked into buying lab-grown animal protein. Words mean something."
Groups such as the Plant Based Foods Association, Institute for Justice, The Good Food Institute, Animal Legal Defence Fund, and the American Civil Liberties Union are fighting back against state labelling laws, which they argue violate first amendment rights to free speech.
The labelling laws pose a huge issue for companies such as Beyond Meat and Tofurky, which make plant-based meat alternatives. It would be expensive to redo labelling for different states with different laws, and it could be catastrophic to sales to not be able to fully describe the product to the consumer on packaging. The state laws include fines for products that break them, and in some states fines are as much as $US1,000 per mislabeled product, the PBFA said.
The stakes are high for companies that make plant-based meat alternatives. The market could grow to be grow to be $US140 billion in the next decade, analysts say. Demand is soaring for the foods, and grocery store sales – in addition to partnerships with high profile restaurants – are an important component in the success of plant-based food companies.
Beyond Meat, one of the most popular in the group, is also an example of how plant-based meat has boomed. Since becoming the first company of its kind to list on the public market, its stock has soared as much as 800%.
How foods are labelled has been an issue even in states where no laws have been passed. In Wisconsin, the dairy lobby has campaigned heavily against alternative dairy products and how such products are labelled. The dairy industry contends that words such as "butter" and "milk" don't belong on vegan products, Bloomberg reported.
But lawyers fighting for plant-based meat and dairy alternative companies say there is no legal basis for censoring packaging over truthful speech, and banning these words from plant-based company packages would be harmful and confusing for consumers.
"It sets up an impossible scenario for these companies in such a way that limits the rights of consumers to receive truthful information about the products available to us," said Holly Dickson, interim director of the Arkansas ACLU.
If there were actual consumer confusion over the products, that would be different, Dickson said. But that doesn't seem to be the case.
"Arkansas are not confused about whether veggie burgers are beef, we are not confused about whether almond milk comes from cows, and we aren't confused about whether there are zebras in Zebra cakes," Dickson said.
Here are three current cases that are fighting back against labelling laws:
1. Tofurky sues Missouri
In August 2018, Tofurky sued Missouri to defend its right to use words like "sausage" and "hot dogs" to describe its products, as long as other packaging made it clear that they were derived from plants.
The Missouri law prohibits misrepresenting any product as meat if it does not come from a slaughtered animal.
A group of organisations including the ACLU of Missouri banded together to challenge the law. A year later, litigation is continuing on after a failed attempt to reach a settlement, reports FoodNavigator USA.
2. Upton's Naturals sues Mississippi
Upton's Naturals Co, a vegan meat maker based in Chicago, is sued Mississippi's governor and commissioner of agriculture over a law that went into effect on July 1. The law restricts them from using words like "meatless meatballs," "hot dogs," and "veggie burgers" to describe their products. It also says that companies would have to pay huge fines for products not labelled in accordance to the law.
"It creates a logistical nightmare and huge cost," Michele Simon, the executive director of the Plant Based Foods Association, a trade group, told Markets Insider in an interview.
3. Tofurky sues Arkansas
In July, Tofurky sued Arkansas for labelling laws similar to those seen in Mississippi and Missouri. The Arkansas law, set to go into effect at the end of July, also says that products labelled "cauliflower rice" and "almond milk" would also be mislabeled and could be fined for not being made from actual rice or dairy.
"The only confusion here seems to be on the part of the Arkansas legislature, which seems to have forgotten its responsibility to its constituents in its rush to pass an unconstitutional law at the behest of its special interest donors," said Jaime Athos, CEO of Tofurky in a press release.
He continued: "When consumers choose plant-based foods, it is not because they are confused or misled, it is because they are savvy and educated about the health and environmental consequences of eating animal products.
"What's really going on here is that the state of Arkansas is seeking to limit access to healthier, more sustainable food choices for its constituents, and it is doing so to benefit the animal agriculture industry."