Wines & Vines

September 2013 Wine Industry Finance Issue

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winery safety scope of the FSMA. Wineries or breweries that a) distribute an unpackaged, non-alcohol food item; or b) sell prepackaged food in an amount greater than 5% of the total facility sales must comply with the entire Act with regard to those foods, even if they meet the requirements set in Section 116. For the purposes of the regulations, any food item that can be exposed to direct human touch during its stay at the winery is considered "unpackaged," even if it is packaged (or repackaged) at the winery. This twist can pose some surprising pitfalls for unsuspecting wineries. A winery that assembles gift baskets containing bottles of its own wine and prepackaged boxes of crackers purchased from a supplier is receiving and distributing food other than alcoholic beverages (crackers) in a prepackaged form, and so would trigger FSMA requirements if these sales exceeded the 5% threshold. Conversely, a winery that presses and bottles estate olive oils would need to consider not only the core Section 116 requirements but also the broader foodsafety protocols of the rest of the FSMA. Honey, tasting room plates and other food items that are ancillary to the winery's primary winemaking function could also trigger additional food-safety regulatory oversight. When considering whether a winery also sells food, wineries need to remember that the FDA's definition of "food" is quite broad. "Food" products may even include products that are created during the course of wine production (juice, hard press or pomace sold to a third party, for example). As for the by-products of wine production, the FDA tentatively concluded that they become subject to the FSMA when they are physically separable from the alcoholic beverage they are used to produce. So, while grapes in the press are subject only to the core Section 116 requirements, pomace destined for animal feed triggers broader FSMA regulation. The FDA is now seeking comment from members of the public regarding the reach, breadth and science relating to the potential impact of FSMA on wineries. products that are not quite alcoholic beverages, though they are destined for that end use. In evaluating whether the Section 116 designations are triggered, wineries must keep in mind that the record-keeping requirements of the FSMA and the federal Bioterrorism Act require all facilities to identify where a food product came from and where it went. Wineries in the practice of selling juices and grapes to other facilities should be able to identify whether those products will be used in an alcoholic beverage, or whether they will be consumed as a non-alcoholic "food," subject to the broader FSMA requirements. FSMA tomorrow: Why the current proposed rules matter for wineries The FSMA sets forth the general contours of broad new food-safety requirements, but leaves the FDA to fill in many details in the form of binding regulations. In January 2013, the agency began that proIn proposed regulations, the FDA sugcess by issuing two important draft reggested that it will consider only the nonulations (the Preventative Controls Rule alcohol food-production activities at and the Produce Safety Rule) for public such a facility subject to the broader review and comment. FSMA requirements, and apply Section The Preventative Controls Rule was 116's core requirements to the remaining issued under Section 418 of the FSMA, alcoholic beverage production occurring and it requires food processors to anaat the site. lyze food-safety risks at their facilities While these reassurances go a long way and put a plan into place to minimize toward protecting wineries, this "physithose risks, taking steps to assure food cally separable" analysis has serious safety that are above and beyond their implications for the wine sector: Where, existing current Good Manufacturing for example, does the sale of partially ferPractices (cGMPs). mented juice fall in this regulatory The proposed new rule will not apply scheme? Hard press? Juice sales to to activities within the Section 116 desiganother wine producer? The regulations nation, but it 2:40 PM Page 1 are silent (or at the very ElectroSteam_June08 4/8/08 will impact any activity in a least unclear) winery that involves either the sale or about these "middle-ground" sales of Archives of Practical Winery & Vineyard available at PracticalWineryLibrary.com pr actica l win ery & vin eya r d S EPTE M B ER 20 13 55

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