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FDA Bans Sale of PFAS in Food Packaging Materials

Grease-proofing materials containing per- and polyfluoroalkyl substances are no longer being sold for use in food packaging in the United States, according to the U.S. Food and Drug Administration. This means the major source of dietary exposure to PFAS from food packaging like fast-food wrappers, microwave popcorn bags, take-out paperboard containers and pet food bags is being eliminated.

PFAS are a diverse group of thousands of chemicals that resist grease, oil, water and heat. The FDA has authorized certain PFAS for limited use in cookware, food packaging and food processing equipment. Exposure to some types of PFAS have been linked to serious health effects. The FDA helps to safeguard the food supply by evaluating the use of chemicals as food ingredients and substances that come into contact with food, such as through food packaging, storage or other handling to ensure these uses are safe.

The announcement marks the fulfillment of a voluntary commitment by manufacturers to not sell food contact substances containing certain PFAS intended for use as grease-proofing agents in the U.S. This FDA-led effort represents a positive step forward as we continue to reevaluate chemicals authorized for use with, and in, food. It underscores an important milestone in the protection of U.S. consumers from potentially harmful food-contact chemicals.

This “win” for public health is the result of FDA research and leadership, combined with cooperation from industry. In 2020, the FDA engaged companies to cease sales of grease-proofing substances that contain certain types of PFAS following our post-market safety assessment. The research FDA scientists conducted and published played a large part in helping the agency obtain commitments from manufactures to voluntarily phase out the use of these substances containing PFAS in paper and paperboard food packaging products.

Assessing progress of these efforts takes time. Various parts of the industry are implementing changes and there are lags in data reporting. However, we are encouraged that through collaboration and a shared interest in the health and welfare of the public, together with industry we can achieve positive health outcomes.

The FDA will continue to conduct research and update our evaluations using the most up-to-date science to ensure that our risk determinations continue to be accurate and based on current science. Where appropriate, we will take the steps necessary to protect the health of U.S. consumers as part of our commitment to food chemical safety.

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Small Businesses Oppose Petition Over Imported Shopping Bags

U.S. small businesses that supply the branded shopping bags for retailers and foodservice businesses across the country have denounced a petition by Novolex—a private-equity owned, multi-billion-dollar packaging giant, saying it misuses U.S. trade laws to drive them out of the market.

The Alliance for Responsible Trade in Paper Bags, representing hundreds of U.S. workers in the specialty paper bag market, is opposing a trade petition from a group calling itself ‘The Coalition for Fair Trade in Shopping Bags’ requesting that the Department of Commerce and U.S. International Trade Commission impose antidumping and countervailing duties on imported shopping bags from nine different countries. The targeted imports range from restaurant carryout bags to high-end retail shopping bags.

‘The Coalition for Fair Trade in Shopping Bags’ is led by Novolex—a $6 billion, highly automated producer of stock paper bags owned by Apollo Global Management and the Carlyle Group, two of the largest private equity firms in the world. Already the dominant player in the U.S. packaging industry, Novolex controls an estimated 75 percent of U.S. production of paper bags.

“U.S. trade law is intended to protect American companies and workers from unfair foreign trade, not drive out competitors that offer more appealing product choices,” said Terri Ethridge, Partner at AnnJoy, a Florida-based supplier of custom branded packaging. “Novolex is not a reliable supplier and refuses to meet the needs of small- and medium-sized businesses. American small businesses like ours provide superior customer service, dependability, quality, and variety compared to Novolex. They only brought this case because they don’t want to compete against us in the marketplace.”

Novolex’s trade petition targets imported product from no fewer than nine countries—Portugal, Turkey and Colombia to producers in southeast Asia—while notably excluding Mexico, from which Novolex itself imports products.

“This trade petition is really about one company trying to knock its competitors out of the market so it can force retail and restaurant customers to accept its mass-produced stock paper bag offerings,” said Andrew Straitman, CEO of Commonwealth Packaging Co., a third-generation, family-owned custom-packaging provider based in Harrisburg, Pa. “Novolex doesn’t even make many of the types of bags that they are trying to shut out of the market. They can’t keep up with what their competitors are offering, so they’re asking the U.S. Government to do their dirty work by imposing duties that give them an unfair advantage while sticking consumers with higher prices.”

Just last month, Novolex announced a price increase of 19 percent amid declining raw material prices—highlighting the unparalleled pricing dominance it already exerts over the U.S. market. Meanwhile, the highly automated company’s hoped-for market gain from its trade ploy would come at the expense of lost jobs for hundreds of U.S. workers.

“Novolex is complaining about low-priced imports, but everyone in this industry knows that they are the dominant market player with tremendous pricing power, which only gets stronger if they get a successful outcome in this case,” said Gordon Summerfield, senior VP of sales and marketing at Trevose, Pa.-based S. Walter Packaging Group, which has supplied packaging products to the retail industry for over 120 years. “Trade law should not be used to reinforce anticompetitive behavior in the U.S. marketplace.”

The USITC will hold a hearing on the Coalition for Fair Trade in Shopping Bags petition on Thursday, March 14. Later this spring, the Commerce Department will issue a final decision on duty levels and the ITC will determine whether injury actually exists.

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Garden City Equity Invests in WeBuild’s Foodservice Turn-Key Service

Garden City Equity is investing in WeBuild, a manufacturer of custom store elements and provider of turn-key program management services for national restaurant and retail franchise brands.

Jeff Fenster founded WeBuild in 2017 to support the rapid new unit growth of his healthy food chain brand, Everbowl. After successfully standing up over 50 Everbowl locations, Fenster saw the opportunity to provide other franchise brands with the same turn-key services – including custom fabrication, logistics, installation, general construction and inventory management.

WeBuild marks Garden City Equity’s seventh investment since 2020. Other notable investors in WeBuild include Drew Brees – athlete and co-owner of Walk-On’s, Smalls Sliders and Stretch Zone; and Perry Rogers – co-owner of Big Chicken.

“Emerging restaurant and retail brands are looking for creative ways to offset the increasing costs and complexity of new unit development. There is immense value in having a partner who has experience avoiding overruns and delays who can support each phase of multi-site brand rollouts – all while having a more streamlined development process,” said Fenster.

“We are very excited to welcome WeBuild to the Garden City family of companies,” said Michael Arrieta, Garden City Equity founder & CEO.

Garden City Equity recently invested in Wathco, a national leader in providing remodel, conversion, and expansion project services to multi-site restaurant, retail, and hospitality brands with nationwide footprints.

Arrieta added, “This investment is extremely strategic for us as we can now further help our national restaurant clients simplify their entire development process – WeBuild provides custom store elements and Wathco provides the installation and project management services.”

Garden City Equity is a people-first holding company that invests in exceptional founder and family-owned businesses. It partners with owners who truly care about the legacy of their businesses, and provide them with a fast, fair, and straightforward acquisition process. It utilizes little to no debt, hold for the long term, and actively engage our family of 50+ mission-aligned shareholders to help grow our businesses.

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