Food, Drink, Law and Taxes

Tom WallaceGeneral, Laws and Taxes


In the last few weeks I have either had conversations or read about items in various trade press about the relationship of food, drink, law and taxes. As a result, I thought it would make for a good blog post. Therefore the insurance angle will be minimal.

Food Safety & Modernization Act

The FDA Food Safety and Modernization Act (FSMA) passed into law in January of this year. A recent check of the FDA site ( shows the timeline of the law. Some of the key components of the legislation have to do with prevention of food contamination. Most of all inspections and access to records are in the law for sure. Consequently, importers and domestic producers are scrutinized.

The FDA will now have the ability to order a mandatory recall. Other response related items include administrative detentions (restrict ability to move food under detention), suspension of registration (facility would be unable to process food), creation of a tracing system and additional records required for high risk foods. High risk foods and the associated record keeping is due within 2 years of implementation. I did not find a list from the FDA but you can check out this list published by the Center for Science in the Public Interest for some ideas as they have tracked information over time (

Insurance coverage for product recall is very narrow. Because the odds of coverage are slim a separate policy or endorsement will be necessary.

NY Cheese & Farmers Markets

Over the summer, here in New York,  cheese came under scrutiny but for different reasons. The NYS Department of Agriculture & Markets began enforcing sanitary requirements on cheese vendors at farm markets. Consequently, cheese sold at a market needs to be precut and wrapped. Cutting cheese to order required the appropriate food processing license. Enforcement was not strict. Sample cutting is now allowed but with a plastic knife and sanitary conditions must be maintained.

NY Spirits

Recently I came across a tax issue I did not know existed. In February of this year a bill was introduced, H.R. 777 Small Distillery Excise Tax Act 2011, by Maurice Hinchey D-NY, to allow a credit against the excise tax on spirits. It would allow craft distilleries a better chance of getting their products to market. The bill is under review by the House Ways and Means committee. You can find out more information here (  I first learned of this as I get periodic emails from the American Distilling Institute ( So for all you craft distillers and supporters of their efforts, stay tuned for any progress on this bill.

Well that is all I have for now. I’m sure there is more out there somewhere. I will find it eventually. If you know of anything I would appreciate a heads up.

As always, we are an independent insurance agency specializing in the specialty food and beverage industry. We keep in touch with your business so we can help.

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Thanks for reading,