New Rules Are Coming for Food Companies’ Ingredients

Alex Ossola (0:03)

Food companies are facing new rules for adding new ingredients. Plus, Boeing sells its flying taxi venture.

And Gulf oil producers have started accepting that Tehran's control of the Strait of Hormuz is their new reality.

Benoît Faucon (0:17)

What they don't want is to have a situation where fees will be paid for crossings, because they feel it will basically will take their entire economies hostage from Iran.

Alex Ossola (0:27)

It's Monday, August 10th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

Health Secretary Robert F. Kennedy Jr. has long promised an overhaul of the country's food system. Today, it got a step closer. The FDA proposed new transparency rules for food ingredients.

SPEAKER_3 (0:50)

We will have a consistent federal framework to study these foods, to understand their effects on human health and to build stronger and lasting nutrition policy.

Alex Ossola (1:02)

Liz Essley Whyte covers the FDA for the Journal and joins me now from Washington. Liz, one big rule outlined today is that the FDA plans to require companies to notify the agency when they introduce a new substance into food products. How would that work and who has been pushing for this?

Liz Essley Whyte (1:17)

Food safety advocates have had a problem with how we regulate food ingredients for years. There's a system in this country that is called the grass loophole by opponents. Basically, if a company declares its ingredient generally recognized as safe grass, they can put that in the food supply and don't even need to notify the FDA and so the federal government really doesn't even have a picture of every substance that is in the US food supply because of this.

What this is proposing is to require companies to notify FDA when they say, yes, we have self-certified that our product is safe.

Alex Ossola (1:56)

Just to be clear, when we say a new substance, do we mean completely new to the food supply or do we mean a new ingredient to a product?

Liz Essley Whyte (2:06)

We mean any kind of new chemical or new ingredient that's going into food that hasn't previously been recognized by the FDA or used for many decades. If you come up with a new ingredient from a plant in your backyard that no one has ever used before, that's what we're talking about. That kind of thing would be something that the FDA is now asking for notification about.

Alex Ossola (2:30)

Kennedy also promised that a definition of older processed foods would be released soon. That's something that food industry groups have been really opposed to for a while, but it was not actually part of today's announcement. Where does this effort stand and why is it so controversial?

Liz Essley Whyte (2:45)

Health officials say it's still an interagency review.

They did not give a timeline for when it might be released. It's controversial because if you define ultra processed food just by the level of processing with no other nuance, then yogurt is an ultra processed food and that's something that Kennedy considers very healthy and food companies are worried that no matter which way the federal government does this, it will end up being detrimental to them and potentially open up more litigation that they would rather not see.

Alex Ossola (3:18)

That was WSJ reporter Liz Essley Whyte. Turning to corporate news, we've got a few deals to report today. The journal has learned that some of Wall Street's biggest firms have agreed to help Nvidia raise $500 billion to fund its AI infrastructure build out. The firms, including BlackRock, Goldman Sachs, and IKR would assemble the financing in different vehicles, not just one large collaboration, according to a person familiar with the matter. And it could grow even larger than 500 billion. The deal could help signal to stock investors that Nvidia and other AI companies have the firepower to build the infrastructure they need. Boeing has agreed to take a nearly 20 percent stake in arrival, Archer Aviation. As part of the deal, Boeing will hand over control of its flying taxi venture called WISC, though it would still have access to WISC's autonomous flight tech. It's the latest in a series of efforts by CEO Kelly Ortberg to sell off parts of Boeing and stabilize its core commercial jet and military businesses.

And Intel says it'll offer $15 billion in common stock, citing strong customer demand. Intel has benefited from the AI boom because the next wave of AI technology, agents that complete tasks for users on their own, rely on central processing units or CPUs, and those are the company's specialty. Intel said it would use the proceeds for general purposes, including capital expenditures and working capital. Intel shares closed more than 4% lower.