- A number of states have proposed or enacted labeling laws that would prohibit companies from Beyond Meat to Oatly from using words like "burger" and "milk" to describe products.
- The ACLU and Plant Based Foods Association argue that these laws violate first amendment rights to free speech. Three cases that combat such laws are currently pending in Arkansas, Mississippi, and Missouri.
- Companies would be hit with huge costs if they have to adhere to different labelling laws across states.
- Read more on Markets Insider.
As demand for plant-based meat and dairy alternatives is booming, so is legislation around how such products can be labeled in grocery stores - and lawsuits protecting the free speech rights of companies that make them.
In nearly half of the states in the US, bills have been announced or passed that would monitor how products derived from plants are labeled when sold to consumers. A number of the labeling laws try to make it illegal to use works like "milk," "burger," and "rice" to describe anything made from plants.
The reasoning? States argue that it is misleading to use words associated with meat or dairy to describe a product that does not come from an animal.
"A food product made of insect protein should not be deceptively labeled as beef," wrote Andy Gipson, the Mississippi Commissioner of Agriculture and Commerce, in a statement on Twitter in response to a lawsuit brought against Mississppi's label law. "Someone looking to purchase tofu should not be tricked into buying lab-grown animal protein. Words mean something."
Groups such as the Plant Based Foods Association, Institute for Justice, The Good Food Institute, Animal Legal Defense Fund, and the American Civil Liberties Union are fighting back against state labeling laws, which they argue violate first amendment rights to free speech.
The labeling laws pose a huge issue for companies such as Beyond Meat and Tofurky, which make plant-based meat alternatives. It would be expensive to redo labeling for different states with different laws, and it could be catastrophic to sales to not be able to fully describe the product to the consumer on packaging. The state laws include fines for products that break them, and in some states fines are as much as $1,000 per mislabeled product, the PBFA said.
The stakes are high for companies that make plant-based meat alternatives. The market could grow to be grow to be $140 billion in the next decade, analysts say. Demand is soaring for the foods, and grocery store sales - in addition to partnerships with high profile restaurants - are an important component in the success of plant-based food companies.
Beyond Meat, one of the most popular in the group, is also an example of how plant-based meat has boomed. Since becoming the first company of its kind to list on the public market, its stock has soared as much as 800%.
How foods are labeled has been an issue even in states where no laws have been passed. In Wisconsin, the dairy lobby has campaigned heavily against alternative dairy products and how such products are labeled. The dairy industry contends that words such as "butter" and "milk" don't belong on vegan products, Bloomberg reported.
But lawyers fighting for plant-based meat and dairy alternative companies say there is no legal basis for censoring packaging over truthful speech, and banning these words from plant-based company packages would be harmful and confusing for consumers.
"It sets up an impossible scenario for these companies in such a way that limits the rights of consumers to receive truthful information about the products available to us," said Holly Dickson, interim director of the Arkansas ACLU.
If there were actual consumer confusion over the products, that would be different, Dickson said. But that doesn't seem to be the case.
"Arkansas are not confused about whether veggie burgers are beef, we are not confused about whether almond milk comes from cows, and we aren't confused about whether there are zebras in Zebra cakes," Dickson said.
Here are three current cases that are fighting back against labeling laws: