By Dino Haloulos (As published in Law360 on January 31, 2025)
The 1970s red M&Ms controversy, although centered on Red No. 2, foreshadowed the eventual decline of its relative, Red No. 3.
For decades, this synthetic dye, known chemically as erythrosine, lent its bright cherry hue to countless products from strawberry Pop-Tarts, maraschino cherries and candy canes to Lucky Charms marshmallows.
Beyond food, Red No. 3 was used in medications, pet foods and cosmetics — until the U.S. Food and Drug Administration banned its use in cosmetics in 1990 after studies linked it to thyroid cancer in male lab rats.
Despite mounting concerns, Red No. 3 continued to be approved for use in food and drugs until Jan. 15 this year, when the FDA issued a final rule revoking its approval as a food additive.
This decision allows time for compliance before the dye is fully prohibited: Food manufacturers must reformulate by Jan. 15, 2027, and drug manufacturers by Jan 18, 2028.
The FDA’s ruling cites the Delaney clause, a provision of the Federal Food, Drug and Cosmetic Act that mandates a zero-tolerance standard for food additives shown to cause cancer in humans or animals, regardless of exposure level.
This regulatory action not only closes the chapter on Red No. 3 but opens a new one for food safety compliance, innovation and litigation, with significant implications for manufacturers, biotech firms, and legal practitioners alike.
The Legal Fallout of the Ban: Compliance and Liability
From a legal standpoint, the FDA’s decision to ban Red No. 3 raises significant compliance and liability questions for manufacturers. Companies failing to meet the reformulation deadlines risk enforcement actions, including product recalls, civil fines and reputational harm.
Beyond regulatory penalties, noncompliance could expose manufacturers to lawsuits under state consumer protection statutes or toxic tort claims alleging harm from exposure to the dye.
For companies that begin reformulating early, this ban also presents an opportunity. Proactively removing Red No. 3 and adopting safer, sustainable ingredients can position brands as market leaders and mitigate potential legal exposure.
However, reformulating iconic products comes with its own risks — if alternative ingredients compromise quality, texture or taste, manufacturers could face breach-of-warranty claims or even class action suits alleging deceptive marketing.
Another potential area of litigation stems from retroactive claims. Plaintiffs attorneys may argue that continued use of Red No. 3 after its cosmetic ban in 1990 constituted a failure to protect consumers. While such claims face challenges — particularly given the FDA’s previous approval for food use — they could pressure companies to reformulate quickly to avoid liability.
The Economic Fallout: Legal and Market Opportunities
The FDA’s ban on Red No. 3 isn’t just a regulatory matter; it’s a question of economics. Food manufacturers have relied on dyes like Red No. 3 to make products visually appealing, a critical factor in consumer purchasing decisions. Removing Red No. 3 means manufacturers must invest in reformulation while ensuring products retain their marketability — a costly and complex endeavor.
However, the race to replace synthetic dyes like Red No. 3 offers significant market opportunities. Analysts project the global natural food coloring market could grow from $1.8 billion in 2023 to over $3 billion by 2030, with bioengineered dyes representing a substantial portion of that growth.
Companies like Israeli biotech firm Phytolon, which reportedly uses precision fermentation to produce yeast-derived pigments, are developing alternatives that combine sustainability, cost-efficiency and FDA compliance.
Similarly, Swiss flavor and fragrance leader Givaudan and Danish bioscience company Chr. Hansen are leveraging plant-based solutions like beet juice and turmeric to meet growing market demands.
For manufacturers and investors, intellectual property protection will be critical as innovation accelerates. Patent disputes, licensing negotiations and trade secret litigation are likely to intensify as companies compete to develop the next-generation colorants that can match the vibrancy, stability, and affordability of Red No. 3.
Regulatory Shifts in a Post-Chevron World
The FDA’s ban on Red No. 3 takes on added significance in light of the U.S. Supreme Court’s 2024 decision in Loper Bright Enterprises v. Raimondo overturning the Chevron doctrine, which previously granted agencies deference in interpreting ambiguous statutes.
Without Chevron deference, industry stakeholders may feel emboldened to challenge the FDA’s regulatory authority, arguing the agency overstepped its statutory mandate in banning a previously approved additive.
However, the Delaney clause provides the FDA with a robust statutory basis for its action. The clause’s zero tolerance standard for carcinogenic additives leaves little room for argument, particularly given the scientific evidence linking Red No. 3 to cancer in animal studies.
Still, the post-Chevron landscape may compel the FDA to provide even more detailed justifications for similar actions in the future, potentially complicating efforts to regulate other additives.
Litigation Risks and Strategies
For litigators on both sides of the aisle, the FDA’s decision creates new opportunities and challenges. Plaintiffs attorneys may pursue toxic tort and product liability claims, alleging harm from long-term exposure to Red No. 3.
Class actions under state consumer protection laws are also a possibility, particularly in jurisdictions with robust consumer advocacy frameworks, like California.
Defense attorneys, on the other hand, will likely rely on compliance with FDA standards as a shield against liability. Arguing that the dye was approved for food use prior to 2025 can help mitigate claims of negligence or willful endangerment.
Expert testimony on dose-response relationships and epidemiological data will also play a critical role in challenging the causal links between typical consumer exposure and alleged health risks.
Why It Matters
The FDA’s ban on Red No. 3 represents more than the end of a controversial dye, it signals a shift in regulatory priorities, consumer expectations and the legal landscape. For food manufacturers, the challenge lies not just in compliance but in turning reformulation into an opportunity to build consumer trust and innovate.
For litigators, this decision sets the stage for potential toxic tort claims, intellectual property disputes and regulatory challenges in an evolving landscape. As the food industry pivots toward natural and bioengineered substitutes, the legal implications will continue to evolve, requiring creative strategies to navigate this evolving and complex terrain.
Red No. 3 may soon fade from our candy and cereal aisles, but the opportunities and challenges it leaves behind ensure that its legacy will shape the future of food safety, litigation, and innovation for years to come.
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