photo of speed limit 25 sign“But my competitor says ‘X’ on its label. Why can’t I?” I often hear this right after I’ve told a client that ‘X’ is not allowed under FDA food labeling regulations.

I have a standard response: “Do you see people driving 80 when the speed limit is 60?” The fact that you see others breaking the law shows only that the law is not perfectly enforced.

In fact, when it comes to food labels, regulatory enforcement is pretty weak. Regulators don’t have the bandwidth to go after all the violators.

So, apart from it generally being good to follow the law, why should you care about labeling compliance? Here are a few reasons:

Class action plaintiffs’ lawyers care about your labels – a lot! They bring cases alleging that non-compliant labels (even nit-picky, technical labeling violations) are deceptive to consumers. This type of litigation is rampant. And no company is too small to get sued. For every case that is filed in court, many more are settled privately.

While you may ultimately prevail in such a lawsuit, can you afford to defend against or settle it?

Your buyers – especially larger distributors and retailers – care about labeling compliance. And, in all likelihood, you promised them (when you signed those vendor terms you may or may not have read) that your products are labeled lawfully. Can you afford to lose a large account and defend and indemnify your buyer if and when it gets hit with a lawsuit over your labels?

Your potential investors care. Expect to get due diligence questions about how you ensure compliance and substantiate label claims. Will you have good answers to these questions?

Occasionally, the regulators enforce the law. FDA seeks out food products that unlawfully claim to prevent, cure, or treat disease. Also, your labeling issue may come to the attention of FDA or a state regulator in an inspection (triggered by a food safety concern, routine monitoring, or for imported products at the border), because someone complained to the agency, or just randomly because a compliance officer happened to see it at a store (they buy food too).

While the regulators won’t impose fines, they will require that you change your labels. Can you afford to do that?

Your competitor with the non-compliant label may have considered these same questions and reached different conclusions than you. This largely comes down to a risk/reward analysis.

Can you afford the speeding ticket if you get caught? Is it worth it?