[I]n January 2014, the specialty mints company VerMints was ordered to pay $65,000 for misusing the term Vermont in its labeling and marketing material. While the Vermont Attorney General’s Office allowed VerMints to keep its name, found to imply true mints rather than a misleading Vermont connection, it ordered the company to clearly label that its mints are produced in Canada and distributed from its headquarters in Braintree, Massachusetts.
The case signals the value of the Vermont brand, the heightened desire to protect it, and the sometimes complex legal waters businesses must navigate in order to claim Vermont heritage.
“I think there has always been some draw to claiming Vermont status,” says Kenneth Miller, a founding partner of Law for Food, which provides legal counsel to farmers and food companies in Vermont and New York, “but it has definitely taken off in the last five to 10 years, in my opinion. There’s a value to add to your product by saying you’re from Vermont, which is a great thing.”
Miller, who interned for the agricultural organization Rural Vermont while attending Vermont Law School, says a Vermont name is perceived to indicate purity, quality, small scale tradition and environmentally friendly practices, and he reports that many in Vermont from farmers to food entrepreneurs brandish their Green Mountain credentials with an eye toward adding marketing value to their product. While specific numbers are hard to pin down, estimates suggest a well-placed “Made in Vermont” label enables a markup of anywhere from 10 percent to 40 percent on food products from dairy to specialty foods to produce.
But with this added value comes a financial incentive for some businesses to misrepresent or fraudulently accentuate their Vermont connection. It also creates a need for the Vermont Attorney General’s Office to set strict guidelines defining what it means to be a Vermont product. The 2006 Rule CF 120 Representation of Vermont Origin Rule does just that. The rule aims to protect consumers from being misled and to protect Vermont businesses from seeing their brand devalued, in turn setting forth a suite of legalese for businesses to sort through in order to use Vermont in their name or marketing material.
Shortly after the rule was enacted, the Vermont Attorney General’s Office found that the Burlington-based pasta sauce company Bove’s of Vermont had in fact moved its production to a facility in Rochester, New York, without disclosing that on their labeling. A 2008 settlement agreement ordered that the company pay a fine of $5,000 and donate $50,000 worth of food to the Vermont Foodbank. The company also voluntarily donated $52,000 to its own local food shelters. The Vermont Attorney General’s Office did not order a name change so long as the company clearly indicated on the front label that the sauce was produced in New York and with California tomatoes. Bove’s of Vermont chose to do so anyway, stripping “of Vermont” and continuing operations as Bove’s.
Bove’s maintained they never tried to mislead anyone, and that they were confused by the rule and the ruling. The Vermont Origin Rule includes separate distinctions and requirements regarding location of production, origin of ingredients, instances of split residency, and reasonable assumptions regarding non-endemic ingredients.
Produce must have 100 percent of its ingredients coming from Vermont in order to use the label, while processed foods must be composed of 75 percent Vermont ingredients and have their “significant transformation” take place in Vermont. Ingredients reasonably perceived to be native to Vermont, such as dairy or maple, must in fact come from Vermont, while ingredients reasonably assumed to come from out of state, such as coffee or sugar may claim Vermont origin despite using out-of-state ingredients.
And while you must be based in Vermont to include the state in your company name, no such requirement exists for using the name of a Vermont town. Cabot Creamery, for example, is based in Cabot, Vermont, but uses milk from dairy farms located out of state and indeed outside of Cabot, and discloses this clearly on their front label. Therefore, it is perfectly legal to keep the name Cabot, but the creamery couldn’t legally be named “Vermont Creamery” or “Cabot Creamery of Vermont” without disclosing they contracted with farms outside of the state. Another example is Castleton Crackers, a Castleton, Vermont, based food company whose business expanded and temporarily relocated to Massachusetts before finding the right production facility in Castleton and returning to Vermont. Despite relocating out of state, at no point did Castleton Crackers have to change its name or front label, whereas it would have should it have been called “Vermont Crackers” or “Castleton Crackers of Vermont.”
This provision applies similarly to the term “Green Mountain” which doesn’t come with any of the requirements that a Vermont name does. Businesses that use “Green Mountain” in their name don’t have to come from the Green Mountains region, or even the Green Mountain State. Therefore Green Mountain Coffee, which is now Keurig Green Mountain, doesn’t have to worry about Vermont origin labeling despite growing into a transnational corporation from its origins in Waitsfield. In contrast to Keurig Green Mountain, Middlebury-based Vermont Coffee Company is OK to use Vermont in its name despite its coffee beans coming from out of the country, because coffee beans are not reasonably perceived to come from Vermont. It must stay in Vermont, though, to keep its name or otherwise clearly indicate it is produced elsewhere. Similarly, TW Garner Food Co. didn’t have to change the name of Green Mountain Gringo after it bought the salsa company and moved it from Chester, Vermont, to Winston-Salem, North Carolina.
Jim Harrison, president of the Vermont Retail and Grocers Association and executive director of the Vermont Specialty Food Association, finds that while companies with the financial backing to pay for legal services to advise on things like naming and origin labeling, other small businesses might not have the resources to afford legal counsel, electing to navigate the origin rule on their own. And while a Vermont kale farmer growing and selling kale might not have any confusion about whether or not her produce qualifies as a Vermont product, those who rely on out-of-state farms, distributors, or production facilities can find these rules to be quite complicated without professional guidance.
Wendy Morgan, chief of the Office of the Vermont Attorney General’s Public Protection Division, explains that her department provides a FAQ page on its website, and also consults with those looking to proactively comply with the law before labelling, something unique to food origin within the consumer protection realm. “I think we do these consultations,” she says, “because we know that it’s not immediately obvious what the best solution is in many circumstances.” Morgan meets with business owners or their legal counsel to talk about what the business is looking to do and whether or not it would be compliant with the Vermont origin rule. “We’re not looking to play gotcha with Vermont small businesses,” she adds. “We’re looking to help them.”
Law firms with food divisions, public interest groups, and farmers’ associations are working to help them as well, with the food law industry rising with the tide of the local food movement and poised to rise even higher as Vermont’s GMO labeling laws are enacted in the near future. In addition to boutique law firms like Law for Food, which has recently relocated from Stowe to Hudson, New York, but maintains Vermont clients, larger Vermont law firms are finding food law niches, and law schools are beginning to create food law programs in response. In October of 2014, Vermont Law School announced it would offer master’s degrees in Food and Agricultural Law and in Food and Agricultural Policy. Its newest center, the Center for Agriculture and Food Systems (CAFS), aims to “train the next generation of food and agriculture advocates and entrepreneurs, and to create innovative legal tools supporting the new food movement,” according to its website.
Laurie Ristino, Vermont Law School professor and the director of CAFS, says the center takes inspiration from the local food movement in Vermont and that it’s responding to a growing need for legal leaders within the local food movement. “There’s a lot of need and it’s really a growing practice area,” she says. “There’s a whole new generation of advocates coming out right now of attorneys who are interested in this, not only in Vermont but nationally as well.”
As for the sometimes murky waters of Vermont origin labelling, Ristino suggests businesses not risk navigating them on their own. “If you’re going to start a business,” she says, “you’ve got to get all of the adequate legal advice. It’s just a cost of doing business.”
