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August 8, 2016
Press Releases, Publications

By Fritz Kriete and Kimberly A. Selemba

Seeing the explosive growth of craft breweries, a long-time coffee producer considers expanding into the lucrative beer market. That migration to craft-beer production is part of a growing wave.

Across the U.S., one to two new craft breweries open every day – many of them boasting pubs.

As more entrepreneurs tap into the burgeoning craft beer market, they are facing the same issues as food manufacturers, such distribution agreements and a host of regulatory concerns.

Traditionally, law firms operated separate practice areas representing restaurants and food manufacturers, while another group of attorneys focused on alcohol and beverage issues. But we see the commonality in the challenges facing the food and beverage industries that require legal teams to be well versed in both areas.

To meet these challenges, McNees Wallace & Nurick LLC created its “Food and Beverage Group’’ to bring together attorneys who focus on both areas. For law firms that want to give clients in either industry the best representation, these multi-disciplinary legal teams are a must.

Labeling, food safety and the regulatory environment

While wine and beer producers are governed by the federal Alcohol and Tobacco Tax and Trade Bureau and food manufacturers must answer to the U.S. Food and Drug Administration, increasingly similar requirements face both industries.

On the food manufacturing side, new FDA regulations under the Food Safety Modernization Act require companies to undertake hazard analyses of their production and take preventative steps. This scrutiny leads to the creation of a written plan detailing the controls that prevent contamination and establish a schedule for periodic testing.

And while contamination issues generally aren’t a problem for distilled products, for the alcohol and food industries, it is still critical to ensure your suppliers are adhering to strict contamination-prevention protocols. Contracts with suppliers should require that they have periodic audits of their facilities, and that audit results are shared with you.

Labeling is another area where the tight controls and requirements that have always governed alcohol, wine and beer producers are now surfacing in the food arena. Labels for distilled products must adhere to strict federal standards governing everything from the legibility of the brand name and location of the manufacturer’s address to the alcohol content and what coloring methods were used, such as adding caramel or grapeskin extract.

On the food side, ingredient labeling is becoming more stringent, especially as some states consider exceeding federal regulations. While Vermont’s labeling law requiring label disclosure of the genetically modified ingredients (GMOs) in foods was preempted by federal legislation and will not become effective, federal standards will replace the state law within the next two years.

While to date similar regulations don’t exist for alcohol manufacturers, concerns over GMO ingredients are hitting the craft beer industry as well. A quick Google search under “craft beer GMO’’ yields a multitude of entries.

For both the alcohol and food manufacturers, this hot topic underscores the importance of having legal advisers who are familiar with the regulations facing both industries. Though they are governed by different federal agencies, attorneys must understand the strategies involved in dealing with both industries in order to give clients the best possible guidance.

Corporate formation, from branding to succession planning and beyond

Whether you’re looking to open a restaurant or a craft brewery, the need to ensure your brand is unique is key. Especially with the skyrocketing popularity of craft breweries, legal issues over both trademark infringement as well as false advertising claims are mounting.

Recently, a federal judge dismissed a class action claim over MillerCoors calling its Blue Moon Belgium beer a “craft beer.’’ Still, as more small brewers are purchased by big companies, it’s a sure bet more of these kind of lawsuits loom on the horizon.

Both food and beverage manufacturers also face common issues when it comes to negotiating contracts covering everything from labor agreements to transportation. Property leasing and acquisition and succession planning are other areas of overlap, whether you’re selling beer, burgers or artisan bread.

As consumers and government agencies take an ever closer look at what dining fare and drinks enter our bodies, law firms must understand the issues facing both the food and beverage industries and the areas of overlap if they are to help clients navigate the increasingly complex regulatory environment.

Fritz Kriete and Kimberly A. Selemba are Co-Chairs of McNees Wallace & Nurick LLC’s Food & Beverage Group. Mr. Kreite can be reached at 717-237-5486 or fkriete@mcneeslaw.com and Ms. Selemba can be reached at 717-237-5359 or kselemba@mcneeslaw.com

McNees is a full-service law firm based in central Pennsylvania with more than 130 attorneys representing corporations, associations, institutions and individuals. The firm serves clients worldwide from offices in Harrisburg, Lancaster, State College and Scranton, PA; Columbus, OH; and Washington, D.C. McNees is also a member of the ALFA International Global Legal Network. www.mcneeslaw.com | @McNeeslaw | LinkedIn