Wines & Vines

September 2013 Wine Industry Finance Issue

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winery safety manufacturing of any foods that are "physically separable" from the alcoholic beverages produced by a winery. These foods include grapes sold for raw consumption (or to a buyer who will not be making wine with them), pomace sold as a component of a human food product, olive oil, crackers, cheese, honey, juices sold for non-alcoholic beverages and gift food baskets (provided that they exceed the 5% threshold). In particular, wineries should be aware that food sold as part of a pairing in a tasting room falls outside the scope of Section 116. Sale of these foods are regulated by the FDA under the FSMA. Although the FDA has not set a clear rule for it yet, the consensus is that tasting rooms off-site from a winery (for example, in a town square) will generally be treated as restaurants. Restaurants are subject to most, but not all, of the FSMA and have special requirements that are beyond the scope of this text. The FDA has also not taken a position regarding whether the sale of partially fermented juice, or unfermented juice sold for winemaking at a different facility, will be subject to the proposed rule (although by law, the exception in Section 116 should be read to apply only to beverages both above 0.5% alcohol by volume and intended for human consumption). Finally, the current Preventative Controls Rule governs only food products for human consumption: A new Preventative Controls Rule for animal foods (including pomace sold for animal feed) is expected to be circulated in 2014. Facilities that sell pomace as animal feed will be governed by that separate rule, and that activity will still be considered a food sale outside the scope of Section 116. Still, even wineries whose activities are firmly outside the scope of the Preventative Controls Rule should keep a wary eye on FDA deliberations. When the proposed rule was published for comment, the FDA went to great lengths to discuss, in broad terms, its interpretation of Section 116 and the role of that special section in implementing the FSMA as a whole. This analysis is important for every winery: Because Section 116 sets the initial bar for whether a facility or activity is bound by the larger FSMA regulatory regime, any decision that the FDA makes about Section 116 will have impacts far beyond the Preventative Controls Rule. The agency is expected to issue regulations elaborating on the Section 116 designation when it issues the final Preventative Controls Rule. Moreover, Section 116 facilities are still required to comply with the Act's core requirements, and they may still be subject to future rulemaking authority by the FDA as it continues to work to understand and apply the Act. Not all rules are issued simultaneously, so, while the Produce Safety Rule and the Preventative Controls Rule are currently out for public comment, other rules are expected to be circulated by the FDA soon. Wineries are receiving new attention, both from the FDA and from state and local compliance officers. Rules for foreign supplier verification and accreditation of third-party auditors (a key piece of the compliance process) were circulated in late July 2013, for comment by late November 2013. Rules about cGMP and preventive controls for food for animals (which will impact facilities currently selling pomace as animal feed), traceability protocols and import certifications are expected in the near future. Your source for informative technical books. ORDER TODAY! www.PracticalWinery.com and click BOOKSHELF 56 p r acti c al w i ne ry & v i ne yard S EPTE MBER 20 13

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