Industry Policy Priority Update. Lee Sanders, CAE Senior Vice President, Government Relations & Public Affairs American Bakers Association

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1 Industry Policy Priority Update 2018 American Pie Council National Championships Lee Sanders, CAE Senior Vice President, Government Relations & Public Affairs American Bakers Association

2 IBIE Proceeds Reinvested Back into the Industry Looking forward, ABA will re-invest at least $2.4 million of its IBIE 2016 proceeds back into the baking industry: Industry Policy Technical Supports GFF and Other Industry Contributions GFF Research Healthy Sandwich Options Grains Impact to Infant and Toddler Health Field to Market Front Line Leader Training Kill Step Validation Workforce Skills Gap Please join us at IBIE 2019: Sept. 7 11, 2019!

Food & Beverage Issue Alliance American Bakers Association American Beverage Association American Frozen Food Institute American Herbal Products Association AIB International American Spice Trade

Flavor and Extract Manufacturers Association Food Marketing Institute Global Food Safety Initiative Grocery Manufacturers Association Health Care Nutrition Council Independent Bakers Association

3 Food & Beverage Issue Alliance American Bakers Association American Beverage Association American Frozen Food Institute American Herbal Products Association AIB International American Spice Trade Association Association for Dressings and Sauces Beer Institute Can Manufacturers Institute Calorie Control Council Corn Refiners Association Distilled Spirits Council Enzyme Technical Association Flavor and Extract Manufacturers Association Food Marketing Institute Global Food Safety Initiative Grocery Manufacturers Association Health Care Nutrition Council Independent Bakers Association Infant Nutrition Council of America Institute of Shortening and Edible Oils International Bottled Water Association International Dairy Foods Association International Food Additives Council International Food Information Council International Foodservice Distributors Juice Products Association National Association of Chemical Distributors National Automatic Merchandising Association National Confectioners Association National Grocers Association National Pasta Association National Restaurant Association North American Millers Association Organic Trade Association Peanut and Tree Nut Processors Association Produce Marketing Association SNAC International The Sugar Association United Egg Producers United Fresh Produce Association Vinegar Institute

4 ABA Strategic Priorities Strategic Plan to Position Industry for Growth Build out Industry Workforce Development Efforts Lead Collaborative Food & Beverage Industry Policy Efforts Enhance Industry Support for K-State GSI Enhance Cookie & Cracker Academy (CCA)

5 2017 Tax Bill Coupled with the rollback of the regulatory overreach of the past few years, bakers and their suppliers have more capital and flexibility to modernize facilities, meet new consumer trends and add skilled employees, Mr. MacKie said. Now the biggest challenge facing bakers w be finding and training those skilled employees to sustain their growth plans. BakingBusiness.com Dec. 21, 2017

6 2018 ABA Policy Priorities Nutrition Labeling Policy Farm Bill Sugar Reform Food Safety California Proposition 65

ealthy Innovation, Safer Families: DA's 2018 Strategic Policy Roadmap FDA s Four Policy

Reduce the burden of addiction crises that are threatening America families 2.

7 ealthy Innovation, Safer Families: DA's 2018 Strategic Policy Roadmap FDA s Four Policy Priorities Areas for 2018: 1. Reduce the burden of addiction crises that are threatening America families 2. Leverage innovation and competition to improve healthcare, broad access, and advance public health goals 3. Empower consumers to make better and more informed decisions about their diets and health and expand the opportunities to use nutrition to reduce morbidity and mortality from disease 4. Strengthen FDA s scientific workforce and its tools for efficient risk management

ealthy Innovation, Safer Families: DA's 2018 Strategic Policy Roadmap Nutrition Action Plan: Initiate a new, comprehensive action plan including steps FDA will take to advan policies that better

8 ealthy Innovation, Safer Families: DA's 2018 Strategic Policy Roadmap Nutrition Action Plan: Initiate a new, comprehensive action plan including steps FDA will take to advan policies that better leverage nutrition and diet Issue practical, substantive guidance to advance menu labeling reg implementa Provide guidance for industry to implement the new revisions to NFL requireme Launch new public education campaign to help consumers maximize public hea benefits of NFL & new menu labeling provisions Revising requirements for certain existing food label claims such as healthy Creating a more efficient review system for evaluating health claims on food lab Modernizing certain standards of identity (SOI) to address current barriers to development of healthier products while assuring consumers have accurate inf Issue a request for info to identify and help prioritize which potential SOI should modernized based on their public health value Providing new opportunities to make ingredient info more helpful to consumer Advance guidance on dietary sodium reduction

SDA FDA Collaboration Agreement Jan. 30, USDA Secretary Sonny Perdue and FDA Commissioner Scott Gottlieb, M.D. announced a formal agreement aimed at making oversight of food more efficient and

9 SDA FDA Collaboration Agreement Jan. 30, USDA Secretary Sonny Perdue and FDA Commissioner Scott Gottlieb, M.D. announced a formal agreement aimed at making oversight of food more efficient and effective e by bolstering coordination between the two agencies: Increase interagency collaboration Efficiency and effectiveness on produce safety Biotechnology activities Provide clarity to manufacturers

10 Food Labels: NFL Compliance Date Extension March 19 FDA s Nutrition Facts Label Extension Proposal sent to OMB March 1 Final FDA Fiber Guidance, Draft Added Sugar Guidance, et al January 23 Food Industry CEO Meeting with WH January 9 th FDA Commissioner Gottlieb Response Letter to FBIA noting continued review of proposed NFL extension to January 1, January 1, 2021 for businesses with under $10m annual sales Further action pending

11 The 2018 Farm Bill Recent key developments on the 2018 Farm Bill and potential future actions August 29, 2017: GAO publishes report on crop insurance : Their analysis said that the government could save up to $464 million a year by reducing the amount paid by the federal government as subsidies to private crop insurance companies. January 30, 2018 Sec. Perdue releases Farm Bill legislative principles : The document broadly outlines what the administration would like to see in the next farm bill, including no increases to farm subsidy programs, giving states flexibility in managing SNAP, and promoting youth and veterans to get into agriculture. They also want a farm bill that reflects the administration s budget goals, which last year called for major cuts. Potential actions The current Farm Bill expires in September 2018 Congress could pass a continuing resolution to push the deadline into 2019 A House bill is currently being analyzed by CBO and may be released in March House and Senate agriculture leaders have expressed dedication to maintaining a unified bill with nutrition and farm programs February 12, 2018 OMB releases Trump s FY2019 budget proposal: The proposal calls for less cuts than the FY2018 proposal, but maintains requests for new inspection fees, cuts to SNAP and limits on farm insurance subsidies. The proposal was met with condemnation by Democratic members of Congress and mostly dismissal by Republicans. A proposal to create a new shelf-stable stable food distribution program in SNAP was also introduced. Free market and environmentalist groups may team up to oppose maintaining commodity supports OMB Director Mulvaney voted against the 2014 bill and may try to influence the president to call for more stringent cuts to crop insurance and SNAP Legislative timeline 2014 February 2017 Feb-April 2017 Feb/May 2017 October 9, 2017 Farm Bill passes two years late: Contention around cutting funds for SNAP and removing direct payments to farmers, among other issues, delayed the legislation Hearing: Setting the Stage for the Next Farm Bill House Committee on Agriculture, chaired by Rep. Mike Conaway (R- TX11), listened to testimony by UDSA s chief economist and academics House Ag Subcommittees held hearings on conservation policy, rural development and energy programs, specialty crops, livestock and dairy issues, commodity markets, SNAP and the Farm Credit System Senate Ag Committee held hearings in Chairman Roberts home state of Kansas and Ranking Member Stabenow s home state of Michigan House Ag Committee listened to farmers in the major dairy and apple state of NY and is launching a weekly video series highlighting the importance of a strong farm bill for all Americans National Journal Research, March 5, 2018 Daniel Stublen

12 Secretary Perdue s USDA Farm Bill Priorities Announced Food, Nutrition & Consumer Services Harness America s agricultural abundance to support nutrition assistance for those truly in need. Support work as the pathway to self-sufficiency, well-being, and economic mobility for individuals and families receiving supplemental nutrition assistance. Strengthen the integrity and efficiency of food and nutrition programs to better serve our participants and protect American taxpayers by reducing waste, fraud and abuse through shared data, innovation, and technology modernization. Encourage state and local innovations in training, case management, and program design that promote self-sufficiency and achieve long-term, stability in employment. Assure the scientific integrity of the Dietary Guidelines for Americans process through greater transparency and reliance on the most robust body of scientific evidence. Support nutrition policies and programs that are science based and data driven with clear and measurable outcomes for policies and program

Frozen Food Institute National Association of Manufacturers Retail Bakers of America Grocery Manufacturers of America International Dairy Foods Association SNAC International Thought leader

13 Newly launched coalition, dedicating to reforming sugar program: FairSugarPolicy.org Industry partners include: National Confectioners Association American Bakers Association Independent Bakers Association Sweetener Users Association American Beverage Association American Frozen Food Institute National Association of Manufacturers Retail Bakers of America Grocery Manufacturers of America International Dairy Foods Association SNAC International Thought leader partners include: Club For Growth Competitive Enterprise Institute Americans for Tax Reform Consumer Federation of America Citizens Against Government Waste Everglades Trust National Taxpayers Union Taxpayer Protection Alliance National Black Chamber of Commerce U.S. Chamber of Commerce National Foreign Trade Council

14 The U.S. sugar program is FairSugarPolicy.org outdated and outrageous: It has created a can t-lose deal for a concentrated group of 13 mega-processors. It is a complicated bureaucratic mess of price supports, market allocations, quotas, and government guarantees that are ultimately covered by taxpayer dollars. According to the U.S. Department of Commerce, the program has an adverse multiplier effect: for every sugar-processing job saved through artificially high U.S. sugar prices, three American manufacturing jobs are lost. We support a simple, bipartisan solution to provide a spoonful of fairness to American food manufacturers that is modest in scope and doesn t abolish the program or hurt farmers.

15 FairSugarPolicy.org 2018 Farm Bill Reauthorization, Policy Efforts Ahead Communicating with congressional leaders on the need for reform Activating industry and grassroots networks throughout the country to demand reform Secure passage/inclusion of Sugar Policy Modernization Act (H.R. 4265/S. 2086) in Farm Bill reauthorization Bipartisan legislation that will modernize sugar program, keep in place safety net for sugar growers, yet remove market distortions Align sugar prices, bring relief to food manufacturers, small businesses, and consumers.

16 HOW YOU CAN HELP FairSugarPolicy.org Join AFSP Go to FairSugarPolicy.org and sign up for updates and follow the Alliance on Facebook and Twitter rg and say that you want to help, provide your contact information, and the Alliance staff will contact you to schedule a briefing call. Advocacy activities include: Sending letters to your elected officials from company Participating in local events Activating employees Hosting elected officials at your facilities, retail locations Making your voice heard in your community through local news articles and opinion editorials/letters-to-the-editor

17 FSMA - What to Expect Current FDA Inspection Approach Include Modernized GMPs Part 117 Subpart B GMPs (limited in scope, similar to a Part 110 inspection). Broad Assessment of Preventive Controls looking for allergen cross contact; micro and cross contamination. Full Preventive Controls Inspection this can be up to a 5 day inspection (average at this time, FDA expects this length to decrease over time in subsequent inspections of the facility). Looking for a facility s written food safety plan; has the plant conducted a risk assessment and identified hazards. This inspection would also look at your supply chain risk and how those hazards are being addressed.

18 FSMA - What to Expect General comments If you are a facility without an environmental monitoring (EM) program in place/ you have raw materials and a RTE food exposed to the environment you could anticipate a full Preventive Controls inspection To date FDA has conducted 500 Broad Assessment Preventive Controls inspections; 140 Full Preventive Controls inspections (40 foreign/ 100 domestic). FDA s trend is to issue a 483 but no warning letter. FDA goal is to work with the firm to make corrections.

19 FSMA - What to Expect Top 5 Observations on 483s Specific manufacturer packaging and allergens; cross contact/some pathogens; may lead into swabs and a more comprehensive inspectio Personnel practices; not mindful of allergens and cross contact; hygiene & outer garments; handwashing practices. Sanitary operations. Equipment design and maintenance. Plant construction/design and concerns with allergen cross contact; fo traffic flow through facility.

20 FSMA What to Expect Top 5 Observations from Full PC Inspections Deviation from written sanitation procedures, including deviation from allergen/pathogen procedures in short, facility is not doing what its procedures say it should be doing Hazard analysis is missing information; e.g., a hazard that should have been identified is not identified Sanitation verification; ensure sanitation is effective; an environmental monitoring program is required but it is lacking or non-existent at the facility. Personnel practices; hygiene & outer garments; handwashing practices. Sanitary manufacturing to avoid allergen cross contact and/or micro contamination

21 California s Prop 65 Prop 65, the 1986 Safe Drinking Water & Toxic Enforcement Act, is a consumer right-to-know statute. Requires warnings to Californians about exposures to chemicals that are listed by the State as causing cancer, birth defects or other reproductive harm If a consumer product contains chemical amounts below a safe harbor level no labeling is required Current chemicals of concern to the baking industry include: Acrylamide, Furfuryl alcohol and Glyphosate

22 Furfuryl Alcohol No safe harbor for Prop 65 - any level in a finished food product must be labeled Found in wide variety of products including: Baked Goods, Pasteurized milk Coffee, Alcohol Beverages Ice Cream, Juice Beverages, Toasted N Nuts Limited or dated information on levels in baked goods No validated method to test for furfuryl alcohol in finished food product ABA Action ABA Prop 65 Working Group ABA Updating baked good consumptionn patterns Chemistries of Heated Carbohydrates Consortium

23 ABA Updated FDA Inspection Manual The ABA Inspection Manual for Food Safety: Includes a list of records that FDA may inspect under FSMA and under the revisions to the Nutrition Facts Label Explains best practices for implementing a no photos policy or how to proceed when a company permits or FDA insists on taking photographs Contains an FDA Facility Inspection Checklist - quickly summarizing key points from when FDA investigators arriv to follow up after the inspection

24 ABA Addressing Policy Priorities: Keys to Success & Value Committees Human Resources Energy and Environment FTRAC Safety Commodity and Agricultural Po Logistics Legal ELDC

THE PREVENTIVE CONTROLS RULES AND THE FSPCA

THE PREVENTIVE CONTROLS RULES AND THE FSPCA Dr. Robert Brackett, Illinois Institute of Technology International Citrus & Beverage Conference Clearwater Beach, FL September 17, 2015 Food Safety Modernization