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A new Texas bill, which is close to being signed, would now mandate warning labels on a range of food products in the state, including Mars’ Skittles and M&M's, as well as WK Kellogg's (KLG) Froot Loops and PepsiCo's (PEP) Mountain Dew.
According to a Bloomberg News report, Texas Senate Bill 25 states that, from 2027, food products that contain certain harmful ingredients and are subject to warning labels in other countries must display those same labels for sales in Texas.
The bill is reportedly backed by Secretary of Health and Human Services Robert F. Kennedy Jr. and now awaits a signature from Texas Governor Greg Abbott.
If made into law, the new directive would significantly impact packaged food companies that fall under its purview. Producers will likely incur additional costs and see a pullback in sales of those products.
It may also encourage other states to adopt the law.
The bill lists over 40 ingredients, including synthetic food dyes and bleached flour. Many, but not all, of the additives are banned or require warnings in other countries.
However, there are a few caveats. If the Food and Drug Administration or Department of Agriculture deems an ingredient safe, restricts it, adds a warning, or bans it after Sept. 1, Texas would not require its own label. Federal labeling rules for processed foods would also override state requirements.
Meanwhile, the U.S. Department of Health and Human Services and the FDA said in April that they are working with food producers to eliminate the dyes by the end of 2026.
Industry groups have said no agreement exists on the matter.
PepsiCo shares are down 14% this year, while WK Kellogg stock is down 11%.
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