FDA Proposes Enforcement Discretion for Small Retailers and Restaurants Under Food Traceability Rule

The U.S. Food and Drug Administration (FDA) has announced draft guidance that, if finalized, would provide additional enforcement discretion for certain small retail food establishments and restaurants subject to the Food Traceability Rule.

The proposed approach would extend enforcement flexibility to qualifying businesses with annual food sales above the rule’s existing exemption threshold, potentially reducing compliance burdens for smaller establishments.

The announcement is part of FDA’s ongoing implementation of the Food Traceability Rule, established under Section 204(d) of the FDA Food Safety Modernization Act (FSMA).

Understanding the Existing Exemption

The Food Traceability Rule establishes additional recordkeeping requirements for certain foods identified on FDA’s Food Traceability List (FTL).

These requirements are intended to facilitate faster identification and removal of potentially contaminated food from the marketplace during foodborne illness investigations and recalls.

Under the existing rule, retail food establishments and restaurants with average annual food sales of $250,000 or less, adjusted for inflation, qualify for an exemption from the additional traceability requirements.

Businesses exceeding that threshold may be subject to the rule, depending on their operations and the foods they handle.

What FDA Is Proposing

Under the new draft guidance, FDA would exercise enforcement discretion for certain additional small retail food establishments and restaurants.

The proposed policy would apply to establishments whose average monetary value of food sold or provided during the previous three-year period:

• Exceeds $250,000, adjusted for inflation.
• Does not exceed $1 million, adjusted for inflation.
• Is calculated using 2020 as the baseline year for inflation adjustments.

For qualifying establishments, FDA would not intend to enforce the Food Traceability Rule’s requirements covered by the proposed policy.

Importantly, this would be an enforcement discretion policy rather than a formal amendment to the existing regulatory exemption.

Why FDA Is Considering Additional Flexibility

FDA indicates that the proposed approach could provide meaningful regulatory relief to numerous smaller food establishments.

According to the agency, the establishments covered by the proposed policy represent a relatively small portion of overall food sales. FDA therefore anticipates that the approach would have minimal impact on public health while reducing compliance burdens.

The agency has also indicated that it intends to consider additional flexibilities to support industry compliance with the Food Traceability Rule.

Details regarding those potential additional measures have not yet been announced.

What Retailers and Restaurants Should Consider

Retail food establishments and restaurants should review the proposed guidance to determine whether they may qualify for the expanded enforcement discretion.

Considerations include:

• Reviewing average food sales over the previous three years.
• Determining whether sales fall within the proposed inflation-adjusted thresholds.
• Understanding the distinction between a regulatory exemption and FDA enforcement discretion.
• Monitoring the draft guidance and any subsequent final guidance.
• Continuing to evaluate other applicable food safety and recordkeeping obligations.

Businesses should avoid assuming that the proposed policy eliminates all traceability or food safety recordkeeping responsibilities.

EAS Perspective

FDA’s proposed enforcement discretion reflects an effort to balance food traceability objectives with the compliance challenges faced by smaller retail food establishments and restaurants.

For businesses that fall above the existing exemption threshold but within the proposed expanded range, the guidance could provide meaningful relief from additional recordkeeping obligations.

However, enforcement discretion does not change the underlying regulation. Businesses should carefully evaluate their eligibility and monitor FDA’s final policy before making compliance decisions based on the proposed approach.

EAS Consulting Group will continue monitoring developments related to the Food Traceability Rule and its implementation.