United States: Raw Materials Compliance

Imagine that you're waiting for an international hop order to clear customs and you receive a panicked call from your broker. She tells you that the U.S. Food and Drug Administration (FDA) tested the hops for pesticide residues and found some that are not approved for use on hops in the United States. The government will not allow the hops to be imported. What are you to do?

First, by way of background, under the Federal Food, Drug, and Cosmetic Act (FFDCA), FDA is primarily responsible for testing foods and food ingredients for adulterants (think contaminants) when they are imported. It is generally believed that the FDA tests, at most, 10 percent of imported food. If the FDA has a particular concern with a food, however, it may test more frequently.

As part of this testing, the FDA may look for microbiological contamination (e.g., E. coli O157:H7) and/or pesticide residues. Technically, the Environmental Protection Agency (EPA) sets pesticide residue levels, which are then enforced mainly by the FDA. As part of its pesticide testing, the FDA often runs a multiresidue screen that looks for many pesticide residues at the same time. If it has a particular concern with a pesticide that is not part of the multiresidue screen, it will have the explicit analysis done for that pesticide. The FDA specifically looks to see if the pesticide residues are within the maximum allowed; i.e., are within the tolerance. If the residues exceed the tolerance or if there is no tolerance, the FDA can declare the food that bears the residue "adulterated" under the FFDCA. An importer cannot bring an adulterated food into the U.S. and a producer (such as a brewer) cannot introduce an adulterated food into commerce.

This scenario occurred on a large scale as recently as 2012. The FDA was advised that certain orange juice and orange juice concentrate contained residues of carbendazim, a fungicide. Although there are tolerances for carbendazim on some fruits (apples, bananas, grapes, peaches, strawberries) there is no tolerance for carbendazim in or on oranges, including juice and concentrate. Consequently, the FDA declared the imported orange juice and concentrate adulterated and did not allow its importation. The Administration then implemented a "test and hold" policy for imported shipments of orange juice to determine if they contained the pesticide. This significantly bottlenecked imports of orange juice and orange juice concentrate and disrupted supply chains and production.

Further, once the FDA became aware of the practice of treating oranges with the pesticide, it began to look at retail for orange juice products that contained residues of carbendazim. The FDA's interest in the finished products made from ingredients that it deems adulterated is often of greater concern to producers than the inability to import a raw material. After all, the value of a distributed product (such as beer) is usually much greater than the raw material (such as hops) and could trigger a costly and disruptive recall. For the orange juice industry, fortunately the FDA did not require a recall because the FDA, in conjunction with the EPA, determined that the carbendazim levels detected posed no safety concern.

Given this possibility, though, what should responsible brewers do to protect themselves?

First, know your brokers/suppliers. Ask them for a Certificate of Analysis (CoA) that the raw material has been tested for contaminants. And don't rely only on the CoA; periodically have raw materials checked by a lab.

Next, require written security in the form of a legal document known as a "guaranty" that your raw materials meet U.S. law, and specifically that they are not adulterated or misbranded under the FFDCA. Include this guaranty in your contract or purchase orders. If your suppliers are based in the U.S., or have a U.S.-based agent, have that U.S. entity provide an FDA guaranty. Having this document on file can provide some legal protection against future FDA enforcement action. More importantly, it could provide a basis for recourse against your supplier should the raw materials it provides prove to be adulterated or misbranded.

The guaranty can be limited to a specific shipment or delivery. If so, it can be part of or attached to the invoice or bill of sale covering the shipment or delivery. The FDA's suggested form for the shipment limited guaranty provides:

[Supplier name] hereby guarantees that no article listed herein is adulterated or misbranded within the meaning of the Federal Food, Drug, and Cosmetic Act, or is an article which may not, under the provisions of section 404, 505, or 512 of the act, be introduced into interstate commerce.

[Signature and post office address of the supplier]

Alternatively, the guaranty can be general and continuing. In this case, the guaranty is considered to have been given at the date the item was shipped or delivered by the supplier. The FDA's suggested form for the general and continuing guaranty provides:

The article comprising each shipment or other delivery hereafter made by [Supplier] to, or in the order of [your name and post office address] is hereby guaranteed, as of the date of such shipment or delivery, to be, on such date, not adulterated or misbranded within the meaning of the Federal Food, Drug, and Cosmetic Act, and not an article which may not, under the provisions of section 404, 505, or 512 of the act, be introduced into interstate commerce.

[Signature and post office address of supplier]

For purposes of preventing penalties under the FFDCA, the guarantor must have a U.S. address. In other words, the FDA considers a guaranty legitimate only if made by a U.S. supplier or agent. On a commercial basis, however, the guarantor does not have to be U.S.-based in order for you to potentially have a remedy on the basis of the guaranty. So even if the guaranty comes from a non-U.S. company, it can possibly provide a basis for indemnification and other claims arising from a breach of the guaranty by the supplier.

In summary, to protect your business against the threat of adulterated raw materials, know what is allowed in your raw materials and products; require your supplier to comply with U.S. law, including the FFDCA and pesticide tolerances; and establish preventive programs and testing programs to provide yourself with assurance that your raw materials and finished products are in compliance with U.S. law.

Originally published in the November/December 2015 issue of The New Brewer.

Raw Materials Compliance

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.