by Matt Weik
The dietary supplement industry has been a target for years, and lawsuits have been filed left and right for the dumbest things many would believe possible. But welcome to America, where people sue almost everything these days. But who would have thought that using “Made in the USA” would have been on the radar for the FTC (Federal Trade Commission), telling brands beforehand that they might or might not have it on their label or packaging?
Well, finally the FTC has made a decision and brands can now have “Made in the USA” on their packaging, provided they meet certain guidelines.
Made in America
According to the Federal Trade Commission, companies can now claim “Made in the USA” on their packaging and in promotions – an announcement that I’m sure many brands will love.
For the first time, the FTC says the new rule provides for potential fines for any violation that people try to take advantage of the claims. The FTC can impose around $ 43,280 civil penalties for violating a rule – just follow the rulers, don’t be set an example. The supplement industry no longer needs blue eyes.
The rule now applies to a wide range of police actions under the FTC, including the ability to seek redress, penalties, damages, and other facilities from marketers who make fraudulent claims about Made in the USA on labels. This rule allows the FTC for the first time to seek civil penalties ($ 43,280) for any violation of the rule.
This regulation applies from August 13, 2021.
The rule prohibits marketers from putting unqualified “Made in the USA” claims on labels unless the following factors have been identified and met:
• All major processing that goes into the product takes place in the USA.
• The processing or final assembly of products should take place in the USA.
• All ingredients and components of the product are manufactured and sourced from the USA itself.
FTC has stated that the rule only applies to the labeling of claims. They also stated that they will continue to take enforcement action against all marketers who make fraudulent U.S. origin claims that do not fall under the rule under Section 5 of the FTA Act. The rule does not change, affect, or replace any other state regulation or law associated with country of origin designations.
Increased damage monitoring after NAFTA
The whole process of working out a final settlement for such claims began after the North American Free Trade Agreement (NAFTA) was signed in 1994 and created a free trade area between Mexico, Canada and the United States.
So far, the enforcement of claims has been carried out without assessing the sanctions.
Effect of the regulation on surcharges
It should be noted that dietary supplements are nowhere mentioned in the document, but the last rule is of the utmost importance for such manufacturers. Only tiny subsets of dietary supplements sold in the US are made entirely from domestically sourced raw materials.
Loren Israelsen, president of the United Natural Products Alliance, stated that his organization did research almost 10 years ago into how much material was from overseas in the supplements sold in the United States. The study found that 80% of the ingredients were of foreign origin.
This fact can prevent many supplement brands from making use of the claim unless they can demonstrate they adhere to the rules outlined earlier. Does that mean that there are no supplement companies that can use the reputation “Made in the USA”? No. But it will drastically reduce the number you see on retailer’s shelves with the call out.
Dietary supplement manufacturers wishing to highlight their home-made connections must carefully make written qualifying statements about the ingredients of the product (s) for which they intend to use the “Made in the USA” label. For example, they may be forced to use something like “Made in the USA with Imported and Domestic Ingredients”.
Does it really matter?
The new FTC Made in the USA marking rule represents its long-term enforcement policy with regard to the claims of origin in the USA, but does not represent any new requirements for companies per se.
It is now very important for marketers to ensure that they meet the FTC’s requirements for “Made in the USA” claims. In addition, brands and marketers run the risk of civil penalties and various other substantial funds. Apparently, if you want to stay within the guidelines and not receive any fines, the rules are set in stone (for now).
What are your thoughts on that? Do you only buy products made in the USA or do you care if most of the materials or production is overseas? Let us know in the comments below.