Quality is a goal, not a guarantee. The very taste of tea depends on this aspiration. How do you ensure that the tea you are providing your patrons is of the highest quality, and above all, safe? The answer is perseverance. Perseverance in employing business practices that safeguard these goals and in understanding the regulatory framework in place at the national and international level that monitors the safety of the tea you purchase, import, and/or serve.
The following article provides fundamental guidelines for protecting your business at home and abroad. While the tea industry is a global endeavor, the government safeguards examined in this piece are limited to those used by the United States (“US”) and the European Union (“EU”).
PROTECTING YOUR INVESTMENT
In order to ensure that the tea you sell meets the high standards for quality and consistency that you demand, it is crucial to establish sound business practices. By demanding that your vendors comply with your exacting standards at the outset, you ensure that guests will enjoy the indulgent experience you hope to create for them.
The Comprehensive Contract
The first step in establishing your expectations is a thorough contract that explicitly states the terms and conditions you require with respect to safety and quality. A hand shake or oral promise will not suffice in the highly sophisticated global tea industry. Whether the contract is with a tea plantation or equipment supplier, it should state in detail the quality, quantity, and price you expect. Clarity and specificity is imperative.
The cost of a product can fluctuate with the currency market. As the US dollar continues to lose value against many other currencies, it is wise to lock in a price for a specific period of time, regardless of currency fluctuations. Agreeing to split the difference if the price changes in either party’s favor is an additional option to buffer the impact of a volatile market. Whichever cost protection approach you choose, ensure it is detailed in the contract.
The right to inspect should be included and exercised. Ideally, a quality control inspection clause in the contract will describe your right to perform timely and appropriate inspections of the goods purchased. Whether a vendor has an opportunity to correct quality problems should be detailed along with the timeframe allowed for curing such defects.
A contingency plan should be detailed in the contract if a product recall occurs. A risk shifting provision in your contract, whereby a foreign manufacturer agrees to indemnify or buy back defective products, is one way to address this danger.
Obtaining a “recall insurance policy” will also offer protection. Since a commercial general liability policy does not generally cover the costs associated with a product recall, a separate “recall insurance policy” will cover the costs to inform your customers of a recall, to provide a suitable replacement, to resolve business interruptions related to the recall, and to provide a defense should litigation related to the recall ensue.
Promises, Promises…
Don’t make promises you can’t keep – not in your company’s written literature, not in your words, and not on your website. Earlier this year, the Federal Drug Administration (“FDA”) warned several tea companies regarding internet advertisements promoting their tea’s ability to prevent or cure cancer.
Even less obvious claims can result in fines and liability. In a recent case brought by the Federal Trade Commission (“FTC”), the U.S. District Court for the District of Connecticut held the defendants involved in advertisements of the “Chinese Diet Tea” were liable for publishing materially misleading advertisements that made “the alleged claims [of dramatic weight loss] expressly, or by such strong implication as to constitute the functional equivalent of express claims…” (Emphasis added). Thus, in order to avoid the threat of liability, it is important not to attest or suggest that your tea can provide miraculous results. Ignoring this lesson could result in potential liability and disappointed patrons; which, as any proprietor can attest, is the worst advertisement a business can have.
SAFEGUARDS PROVIDED BY THE US AND THE EU
You’re not the only one minding your business. Most countries have laws and inspection mechanisms to ensure the safety of locally grown or manufactured products. Similar principles exist to protect the citizens of various countries from imported goods. As the presence of European tea growers and manufacturers continues to grow on the global scale, it is important to understand the applicable regulatory framework employed by the US and the EU to monitor and protect the tea industry.
US Safety Measures
In the US, there are a number of federal agencies that monitor the food that is produced and imported by its citizens. The FDA is responsible for ensuring the safety of domestic foods such as tea, milk, and produce. The FTC ensures that the advertisements for such goods are truthful and that the advertisers can substantiate any claims. The Environmental Protection Agency (“EPA”) tests many foods produced in or imported to the US to ensure that they do not exceed the “Maximum Residue Limit” of pesticides. The Centers for Disease Control and Prevention (“CDC”) examines and detects food borne illnesses and evaluates studies such as the relationship between tea intake, the COMT genotype, and breast cancer in Asian-American women. Finally, the Department of Homeland Security, Office of Health Affairs, gauges the vulnerability of certain foods for contamination and inspects specified products at the US’s borders.
EU Safeguards
Just as the US provides a regulatory scheme to meet the needs of the citizens of various states, the EU provides a similar system to protect the member states of the EU as well as all citizens of Europe in certain instances. The EU created the Directorate General for Health and Consumer Affairs (“DG-SANCO”) to concentrate on food safety, public health, and consumer affairs. DG-SANCO is responsible for the advancement of EU safety legislation. Recognizing the separate but equally important needs of risk assessment and risk management, the European Food Safety Authority (“EFSA”) was formed to monitor risk assessment and the European Commission (“EC”) was created to address risk management.
Should a serious risk arise, the Rapid Alert System for Food and Feed (“RASFF”) electronically notifies the member states (and non-member states Iceland, Liechtenstein, and Norway) to allow each to verify whether the specific product is on the market and initiate a recall or withdrawal of the product if necessary.
CONCLUSION
Whether you purchase from the Charleston Tea Plantation or the Gorreana Tea Plantation in São Miguel, it is essential that you take some basic steps to protect your company from the damage that can result from tea that does not meet your, or your country’s, high standards. A comprehensive contract that provides explicit details as to price, quality, and safety will enable your local or international vendors to understand and to meet your expectations. By understanding the patchwork of regulatory agencies that monitor the quality of the tea you purchase and the safeguards in place in the event an unsafe ingredient is discovered in the marketplace, you will be armed with the recourse outlined in your contract and the knowledge of how the government is managing the problem. Taking such an active role in the business of your tea company allows your customers to enjoy the peace of mind they need to sink into the sublime sedation that ensues with each contemplative moment from sipping their favorite tea.
Sarah E. Carson, J.D. is an attorney and president of LegalTEAS, LLC. She is a national speaker on legal issues related to commercial transactions and has taught law courses at the undergraduate and graduate level. The information in this article is provided for informational purposes only and does not constitute legal advice. Additional information on this article and related links may be obtained at http://www.legalteas.com/
