[Federal Register Volume 72, Number 160 (Monday, August 20, 2007)]
[Rules and Regulations]
[Pages 46375-46378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-16272]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 101

[Docket No. 2004N-0382]
RIN 0910-ZA23


Food Labeling: Safe Handling Statements: Labeling of Shell Eggs

AGENCY: Food and Drug Administration, HHS.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA) is amending its food 
labeling regulations to permit the egg industry to place the safe 
handling statement for shell eggs on the inside lid of egg cartons if 
the statement ``Keep Refrigerated'' appears on the principal display 
panel (PDP) or information panel. This final rule will provide the 
industry greater flexibility in the placement of safe handling 
instructions on egg cartons, while continuing to provide consumers with 
this important information. This action is in response to numerous 
requests from the egg industry.

DATES: This final rule is effective August 20, 2007.

FOR FURTHER INFORMATION CONTACT: Catalina Ferre-Hockensmith, Center for 
Food Safety and Applied Nutrition (HFS-820), Food and Drug 
Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 301-
436-2371.

SUPPLEMENTARY INFORMATION:

I. Background

    On December 5, 2000 (65 FR 76092), FDA (we) published a final rule 
(hereinafter referred to as the shell egg refrigeration and labeling 
final rule) to require a safe handling statement on cartons of shell 
eggs that have not been treated to destroy Salmonella microorganisms ( 
Sec.  101.17(h) (21 CFR 101.17(h))). The regulation also requires 
retail establishments to store and display shell eggs under 
refrigeration (21 CFR 115.50). FDA issued the shell egg refrigeration 
and labeling final rule because of the number of outbreaks of foodborne 
illnesses and deaths caused by Salmonella Enteriditis that are 
associated with the consumption of shell eggs. After the publication of 
the shell egg refrigeration and labeling final rule, the egg industry 
asked FDA to allow safe handling statements to be placed on the inside 
lid of egg cartons because of: (1) The lack of equipment to print on 
the side panels of egg cartons (i.e., the information panel), (2) the 
high cost to purchase equipment to print on the sides of egg cartons, 
and (3) the high cost to change the graphic design of the PDP for each 
brand that manufacturers produce for each customer.
    In the Federal Register of May 5, 2005 (70 FR 23813), FDA published 
a proposed rule (the 2005 proposed rule) to allow the egg industry to 
place the required safe handling statement on the inside lid of egg 
cartons, if the statement ``Keep Refrigerated'' appears on the PDP or 
information panel. We tentatively concluded in the proposed rule that 
the inside lid would serve as an acceptable panel for the safe handling 
instructions without diminishing the effectiveness of the message. We 
further tentatively concluded that providing flexibility to allow the 
placement of the safe handling statement for shell eggs on the inside 
lid of egg cartons if the statement ``Keep Refrigerated'' appears on 
the PDP or information panel may result in cost savings for the egg 
industry, and, thus, for consumers.

II. Comments and Agency's Responses

    FDA received a total of eight responses, each containing one or 
more comments, to the proposal. The comments were from consumer groups, 
a State government agency, a consumer, a consulting firm, and a trade 
association. Some of these comments were about issues that are outside 
the scope of this rulemaking and will not be addressed in this 
document. The majority of the remaining comments supported the 
proposal. One comment directly opposed the proposal, whereas two 
comments supported the proposal based on suggested modifications to the 
proposal.
    (Comment 1) The comment that opposed the proposal asserted that 
there is no ``lack of equipment'' for printing the safe handling 
statement on the side panel of egg cartons. The comment contended that 
all the egg industry has to do is order new packages.
    (Response) As we stated in the 2005 proposed rule, the egg industry 
sent letters to FDA stating that placing the statement on the top or 
sides of the carton would result in a financial hardship for their 
companies because of, among other things, the lack of equipment to 
print on the side panels of egg cartons (i.e., the information panel) 
and the high cost to purchase equipment to print on the sides of egg 
cartons. One of these letters provided specific information on the high 
costs to purchase new equipment required for printing on the 
information panel and on the high costs to redesign the egg carton. The 
comment that opposed the proposal did not provide data or other 
information that shows that the industry has the necessary equipment. 
Consequently, we are not persuaded by this comment, and we maintain our 
view that allowing the safe handling instructions on the inside of the 
lid could result in cost savings for the industry and ultimately the 
consumer, while continuing to provide mandatory safe handling 
instructions to consumers.
    (Comment 2) Several comments requested that FDA make format changes 
for the safe handling statement. Two comments stated that FDA should 
replace the current standard of ``conspicuous'' with specific 
formatting requirements for the safe handling statement, e.g., use of 
dark color, such as black, blue, dark blue, or brown on a light 
background. In addition, several comments stated that the type size of 
the safe handling statement should be increased and two of these 
comments suggested specific sizes, e.g., 12-point or larger and ``10-
inch type'' \1\ or larger. In addition, one of these comments stated 
that a survey of egg cartons found that the safe handling statement is 
printed in type as small as 7-point and, sometimes, the statement is 
printed directly on a gray cardboard carton, which makes the statement 
difficult to read. Therefore, according to this comment, a significant 
number of consumers may not notice or

[[Page 46376]]

may have difficulty reading this information.
---------------------------------------------------------------------------

    \1\ We believe that the comment did not actually mean ``10-
inch'' type but meant another type size, such as a 10-point font.
---------------------------------------------------------------------------

    (Response) We do not agree that specific formatting requirements 
for the safe handling statement are needed. Provisions in section 
403(f) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 343(f)) 
and FDA implementing regulations in Sec. Sec.  101.2 and 101.15 (21 CFR 
101.2 and 101.15) address the prominence and conspicuousness of 
mandatory information on food labels. Specifically, Sec.  101.2(c) 
provides that mandatory labeling information must appear prominently 
and conspicuously and should be at least one-sixteenth inch in height. 
In addition, Sec.  101.15(a)(6) provides that labeling information may 
lack the necessary prominence and conspicuousness if it is crowded with 
other written or graphic matter or has insufficient background 
contrast. The comments did not provide data that show that the existing 
requirements in Sec. Sec.  101.2 and 101.15 are not adequate when 
followed. In addition, the type size required in Sec.  101.2 is a 
minimum type size and does not restrict manufacturers from using a 
larger type size to print information on food labels if they choose. 
Also, while the comments stated that the safe handling statement may be 
difficult to read, the comments did not provide any data that 
demonstrate that consumers are unable to read the statement. Therefore, 
we are not persuaded that specific formatting requirements are needed 
in this regulation in addition to the requirements already in place in 
Sec. Sec.  101.2 and 101.15 to ensure that the safe handling statement 
is noticeable and legible.
    We remind manufacturers that they must comply with FDA's 
regulations on the prominence and conspicuousness of mandatory 
information on food labels in Sec. Sec.  101.2 and 101.15. In addition, 
we encourage manufacturers to print the safe handling statement in 
fonts larger than the minimum required if space is available on the 
carton.
    (Comment 3) One comment stated that a referral statement should 
accompany the ``Keep Refrigerated'' statement. The comment argued that 
a referral statement is necessary so that consumers would know to look 
on the inside of the lid for safe handling instructions. However, the 
comment did not provide any supporting data.
    (Response) We are not persuaded by the comment that a referral 
statement should accompany the ``Keep Refrigerated'' statement. In the 
proposal we did not propose to require a referral statement because we 
assumed that the number of consumers who would read the safe handling 
statement on the inside lid under this rule to be about the same as the 
number who read it on the outside of the carton. We base this 
assumption on the following reasons: (1) All consumers open egg cartons 
before consumption; and (2) the greater potential for larger font sizes 
and lower text density on the inside lid, which may equate to a larger 
number of consumers reading the safe handling statement.
    However, in the proposed rule we asked for comment on whether it is 
necessary to require a referral statement on the outside lid when the 
safe handling instructions are placed on the inside lid. The comment 
did not provide any supporting data or other information that 
demonstrates that when consumers open egg cartons before consumption, 
they will not see the safe handling instructions. Therefore, we are not 
persuaded that there is a need for a referral statement to accompany 
the ``Keep Refrigerated'' statement.

III. Analysis of Economic Impacts

    FDA has examined the impacts of the final rule under Executive 
Order 12866 and the Regulatory Flexibility Act (5 U.S.C. 601-612), and 
the Unfunded Mandates Reform Act of 1995 (Public Law 104-4). Executive 
Order 12866 directs agencies to assess all costs and benefits of 
available regulatory alternatives and, when regulation is necessary, to 
select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety, and other 
advantages; distributive impacts; and equity). FDA has determined that 
this final rule is not a significant regulatory action as defined by 
the Executive order.
    The Regulatory Flexibility Act requires agencies to analyze 
regulatory options that would minimize any significant impact of a rule 
on small entities. The final rule provides additional options for 
placing the safe handling statement on egg cartons. No small business 
would be forced to use this option, and so the final rule imposes no 
costs on small businesses. For those small businesses choosing the 
option, the final rule reduces labeling costs. Therefore, the agency 
certifies that this final rule will not have a significant economic 
impact on a substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires 
that agencies prepare a written statement, which includes an assessment 
of anticipated costs and benefits, before proposing ``any rule that 
includes any Federal mandate that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100,000,000 or more (adjusted annually for 
inflation) in any one year.'' The current threshold after adjustment 
for inflation is $122 million, using the most current (2005) Implicit 
Price Deflator for the Gross Domestic Product. FDA does not expect this 
final rule to result in any 1-year expenditure that would meet or 
exceed this amount.

A. Need for This Regulation

    The need for this regulation is to provide the shell egg industry, 
which includes egg producers, carton manufacturers, egg distributors, 
and retailers, additional flexibility in complying with FDA 
requirements for the placement of safe handling instructions on egg 
cartons, without reducing the prominence or conspicuousness of the 
information and without undermining the effectiveness of the shell egg 
refrigeration and labeling final rule. Allowing the inside lid to be 
used for the safe handling instructions may create cost savings for 
firms that were concerned that complying with the labeling requirement 
of the shell egg refrigeration and labeling final rule would be a 
financial hardship. This final rule allows for the safe handling 
instructions to be placed on the inside lid of egg cartons if the words 
``Keep Refrigerated'' are placed on the PDP or information panel.

B. Comments

    In response to the proposed rule, FDA received several comments. 
None of the comments provided information that would alter the 
conclusions of the economic impact analysis of the proposed rule.

C. Cost-Benefit Analysis

    In the proposed rule, FDA evaluated three regulatory options to 
allow the safe handling statement to be printed on the inside lid of 
egg cartons. The options considered were the following: (1) No new 
regulatory action, (2) allow the safe handling statement to be placed 
on the inside lid with a referral statement on the outside of the 
carton if the words ``Keep Refrigerated'' are placed on the PDP or 
information panel, and (3) allow the safe handling statement to be 
placed on the inside lid with no referral statement required if the 
words ``Keep Refrigerated'' are placed on the PDP or information panel.

[[Page 46377]]

1. Costs: Potential Reduction in the Numbers of Consumers Reached
    FDA estimated that the costs of this rule are likely to be zero. 
The only costs that could arise are from changes in the number of 
consumers who read the safe handling statement. The number of consumers 
who would read the safe handling statement on the inside lid under this 
rule is assumed to be about the same as the number who read it under 
the existing regulation. The reasons for this assumption are: (1) The 
consumer practice of looking inside the egg carton either at the time 
of purchase or at a time before consumption, and (2) the potential for 
more space on the inside lid of egg cartons because of its relatively 
larger surface area.
    At least one study has shown that labels that are larger and have 
less text density attract more attention (Ref. 1). Another study has 
shown that larger font sizes enhance label legibility (Ref. 2). Because 
the inside lid may allow less text density and more space for printing 
the safe handling statement in larger font sizes, such placement may 
result in a larger number of consumers reading the safe handling 
statement than under the existing regulation. Because all consumers 
look inside the egg carton at some time before consumption, FDA 
concludes that there are no costs of this final rule.
2. Benefits: Cost Savings Realized by Egg Carton Manufacturers
    The benefits from this rule are the costs savings to firms from 
avoiding placing the safe handling statement on the PDP or information 
panel. The estimates of the total cost savings for this rule are based 
on previous estimates of costs savings of option two in the proposed 
rule. Under option two, the costs savings for a firm from additional 
flexibility equal the difference between the sum of the costs of 
printing the safe handling statement on the inside lid and printing a 
referral statement and the costs of printing the safe handling 
statement on either the PDP or information panel. The agency estimated 
the cost savings associated with option two by computing the costs of 
full label redesign and of adding a safe handling statement using the 
FDA Labeling Cost Model, Final Report (Ref. 3). The range of cost 
savings from option two is estimated to be between $5 and $19 million, 
with a mean of $11 million, assuming a 12-month compliance period.
3. Comparing the Benefits of Option Two With Those of Option Three, the 
Chosen Option
    A comparison of the estimates of the total costs savings reported 
for option two with those reported for option three, the chosen option, 
indicates the potential for substantial cost savings with option three. 
The larger cost savings from option three compared with option two 
reflects the lower cost from not requiring a referral statement on an 
outside panel in option three as well as the cost savings from a larger 
share of the industry choosing the inside lid statement under option 
three. The cost savings from option two and this final rule are 
reported in table 1 of this document.

                   Table 1.--Cost Savings of Option Two and of Option Three, the Chosen Option
----------------------------------------------------------------------------------------------------------------
                                  Cost Savings of Option Two (12-Month      Cost Savings of Option Three, the
   Estimates of Cost Savings                  Compliance)                  Chosen Option (12-Month Compliance)
----------------------------------------------------------------------------------------------------------------
Mean estimate                                               $11,032,000                              $14,843,000
----------------------------------------------------------------------------------------------------------------
Low estimate (5th percentile)                                $5,125,000                               $8,039,000
----------------------------------------------------------------------------------------------------------------
High estimate (95th                                         $19,022,000                              $24,645,000
 percentile)
----------------------------------------------------------------------------------------------------------------

4. Summary of Costs and Benefits of this Final Rule
    FDA estimated the costs and benefits for three regulatory options 
for flexibility in the placement of the safe handling statement on egg 
cartons. The analysis concludes that the costs, measured as the public 
health effects of a decrease in the number of consumers that would read 
the safe handling statement, are zero for option three, the chosen 
option. We conclude that because all consumers open egg cartons before 
consumption, and given the potential for larger font sizes and lower 
text density on the inside lid, it is likely that most consumers will 
notice the safe handling statement on the inside lid if it is located 
there. The benefits from the options considered are measured as the 
cost savings from allowing firms additional flexibility of printing the 
safe handling statement on the inside lid. The estimated cost savings 
from option three, the chosen option in this final rule, range from $8 
to $25 million, with a mean of $15 million, assuming a 12-month 
compliance period.

IV. Analysis of Environmental Impact

    The agency has determined under 21 CFR 25.30(k) that this action is 
of a type that does not individually or cumulatively have a significant 
effect on the human environment. Therefore, neither an environmental 
assessment nor an environmental impact statement is required.

V. Paperwork Reduction Act of 1995

    FDA concludes that this final rule contains no collection of 
information. Therefore, clearance by the Office of Management and 
Budget under the Paperwork Reduction Act of 1995 is not required.

VI. Federalism

    FDA has analyzed this rule in accordance with the principles set 
forth in Executive Order 13132. FDA has determined that the rule would 
have a preemptive effect on State law. Section 4(a) of the Executive 
Order requires agencies to ``construe * * * a Federal statute to 
preempt State law only where the statute contains an express preemption 
provision, or there is some other clear evidence that the Congress 
intended preemption of State law, or where the exercise of State 
authority conflicts with the exercise of Federal authority under the 
Federal statute.''
    The shell egg refrigeration and labeling final rule set minimum 
national standards to ensure the safety of eggs for all consumers in 
this country. Because State and local public health officials are the 
primary enforcement officials in retail establishments, FDA has 
recognized that it must rely on these officials to provide the bulk of 
the enforcement of this regulation. If less stringent State or local 
refrigeration and labeling requirements are not preempted, enforcement 
of those less stringent requirements will interfere with the 
cooperative enforcement of the Federal egg refrigeration and labeling 
requirements. FDA believes that such cooperative enforcement is 
critical to effective implementation of this important food safety 
requirement.
    Thus, although Congress did not expressly preempt State law in this 
area,

[[Page 46378]]

FDA found in the shell egg refrigeration and labeling final rule that 
preemption is needed because State and local laws that are less 
stringent than the Federal requirements will significantly interfere 
with the important public health goals of this regulation (65 FR 76092 
at 76109-76110). This final rule amends the shell egg refrigeration and 
labeling final rule to permit the egg industry to place the safe 
handling statement for shell eggs on the inside lid of egg cartons if 
the statement ``Keep Refrigerated'' appears on the PDP or information 
panel. FDA believes that preemption of State and local labeling 
requirements that are the same as or more stringent than the 
requirements of this regulation would not be necessary, as enforcement 
of such State and local requirements would not interfere with the food 
safety goals of this regulation. Further, it is likely that any states 
that enacted similar labeling requirements to those in this final rule 
would change those requirements to be consistent with any changes made 
by FDA as a result of this rulemaking. Accordingly, the preemptive 
effect of this rule would be limited to State or local requirements 
that are not as stringent as the requirements of this regulation. 
Requirements that are the same as or more stringent than FDA's 
requirement would remain in effect.
    Further, section 4(e) of the Executive Order provides that ``when 
an agency proposes to act through adjudication or rulemaking to preempt 
State law, the agency shall provide all affected State and local 
officials notice and an opportunity for appropriate participation in 
the proceedings.'' FDA provided the States with an opportunity for 
appropriate participation in this rulemaking when it sought input from 
all stakeholders through publication of the 2005 proposed rule. FDA 
received two comments from a State Department of Agriculture, which 
agreed with the proposal.
    In addition, on March 12, 2007, FDA's Division of Federal and State 
Relations provided notice by fax and e-mail transmission to State 
health commissioners, State agriculture commissioners, and food program 
directors of FDA's intended amendment to its food labeling regulations 
to permit the egg industry to place the safe handling statement for 
shell eggs on the inside lid of egg cartons if the statement ``Keep 
Refrigerated'' appears on the PDP or information panel (Sec.  
101.17(h)). The notice provided the States with further opportunity for 
input on this rulemaking. It advised the States of the intended 
publication of the final rule and encouraged State and local 
governments to review the notice and to provide any comments to the 
docket (Docket Number 2004N-0382), opened May 5, 2005, when the 2005 
proposed rule was published in the Federal Register, by a date 30 days 
from the date of the notice (i.e., by April 11, 2007). FDA received no 
comments in response to this notice. The notice has been filed in the 
previously referenced docket.
    For the reasons set forth previously in this document, the agency 
believes that it has complied with all of the applicable requirements 
under the Executive order. In conclusion, FDA has determined that the 
preemptive effects of this rule are consistent with Executive Order 
13132.

VII. References

    The following references have been placed on display in the 
Division of Dockets Management (see ADDRESSES) and may be seen by 
interested persons between 9 a.m. and 4 p.m., Monday through Friday.
    1. Tuominen, R., ``Why Do Some Yellow Page Advertisements 
Capture Attention Better Than Others?,'' Acta Odontologica 
Scandinavia, 59: 79-82, 2001.
    2. Dietrich, D.A., ``Enhancing Label Readability for Over-the-
Counter Pharmaceuticals by Elderly Consumers,'' Journal of Safety 
Research, 27: 132, 1996.
    3. RTI International, ``FDA Labeling Cost Model, Final Report,'' 
prepared by Mary Muth, Erica Gledhill, and Shawn Karns, RTI, 
prepared for Amber Jessup, FDA, Center for Food Safety and Applied 
Nutrition, April 2002.

List of Subjects in 21 CFR Part 101

    Food labeling, Nutrition, Reporting and recordkeeping requirements.

0
Therefore, under the Federal Food, Drug, and Cosmetic Act and under 
authority delegated to the Commissioner of Food and Drugs, 21 CFR part 
101 is amended as follows:

PART 101--FOOD LABELING

0
1. The authority citation for 21 CFR part 101 continues to read as 
follows:

    Authority: 15 U.S.C. 1453, 1454, 1455; 21 U.S.C. 321, 331, 342, 
343, 348, 371; 42 U.S.C. 243, 264, 271.

0
2. Section 101.17 is amended by revising paragraph (h)(2) to read as 
follows:


Sec.  101.17  Food labeling warning, notice, and safe handling 
statements.

* * * * *
    (h) * * *
    (2) The label statement required by paragraph (h)(1) of this 
section shall appear prominently and conspicuously, with the words 
``SAFE HANDLING INSTRUCTIONS'' in bold type, on the principal display 
panel, the information panel, or on the inside of the lid of egg 
cartons. If this statement appears on the inside of the lid, the words 
``Keep Refrigerated'' must appear on the principal display panel or 
information panel.
* * * * *

    Dated: May 25, 2007.
Jeffrey Shuren,
Assistant Commissioner for Policy.
[FR Doc. E7-16272 Filed 8-17-07; 8:45 am]
BILLING CODE 4160-01-S