Ask the Rabbi

October 11, 2010

Dear Rabbi:

QUESTION: As an OU company, I have many customers who want their names printed on the label with no mention of the manufacturer (also known as private label products). We understand the need to sign a contract, to ensure that everyone is “on the same page” with the OU requirements for private labels, though the “legalese” of the contract makes it hard for us to understand what exactly we are obligating ourselves (and what our label company is obligating itself) to do to remain OU certified. Can you advise us in “plain talk” what exactly are the responsibilities of the manufacturer and the label company in the agreement? Specifically, what is this “parallel product” clause, and why is it needed?

ANSWER: The Private Label Agreement (PLA) is a three-way agreement signed by the manufacturer, the distributor and the OU in order to authorize use of the OU symbol on private label goods. Most distributors will use the standard PLA; however, some distributors have a custom PLA. The private label fee for those distributors with a custom PLA is usually higher because of the additional administrative work involved.

Once the PLA has been fully signed and executed, products can be added or deleted by written request to your rabbinic coordinator. In addition, the manufacturer may expand the authorization to additional plants. Here’s a clarification in layman’s terms of the key clauses in section one.

• The manufacturer of the product must be currently certified in order to request and obtain authorization to private label with the OU.

• The production of private label goods is subject to the manufacturer’s authorized production procedures and approved ingredients.

• Identical product clause: The distributor may not have the identical item produced in an OU version and a non-OU version. The distributor can obtain private label authorization for the identical item produced by multiple OU companies.

• The rationale for this clause is two-fold:

1-To avoid consumer confusion: If a product made by one facility bears the OU symbol and the identical product made by another facility does not bear the OU symbol, consumers will become confused and not trust the integrity of the product even when bearing the OU symbol. Additionally, some consumers may inadvertently purchase the product not bearing the OU symbol — not realizing that it may be non-kosher – because they mistakenly identify the product as backed by the OU due to the appearance of the OU symbol on the product that comes from the OU certified facility.

2- When there are multiple manufacturers of the same item, one OU certified and one non-OU certified, there is a great risk of the OU graphic being copied by the non-OU certified manufacturer or the packaging bearing the OU being transferred to the non-OU certified manufacturer.

• Only plants listed on the schedule A of the PLA, i.e., a list of approved products (not to be confused with the manufacturer’s schedule A, list of approved ingredients) can produce certified product.

• No other kosher symbol may appear on the label along with the OU symbol unless specifically authorized in writing by the OU.

• The OU symbol cannot be used on goods not appearing in the PLA without submitting a written request and receiving written approval from the OU in the form of a LETTER OF CERTIFICATION.

• Packaging material bearing the OU may not be removed from the authorized plant without written permission from the Orthodox Union, even if the second facility is OU certified.

• In the event of an error of kosher significance, product may have to be withdrawn from the marketplace. If such withdrawal is deemed necessary, the OU often places notification in the American Jewish newspapers in the geographic area where the product is distributed.

• The expiration of the Private Label Agreement coincides with the company’s renewal date. The agreement is automatically renewed unless canceled by any of the three parties.

• There is a private label fee per distributor, not per brand or product, charged to the manufacturer. The initial year of the PLA is called a registration fee, whereas subsequent years of private label certification are invoiced as certification fees.

• The OU symbol may only be used in advertising when clearly and simply identifying OU products. Any other use – such as inclusion of the OU symbol as a stand-alone in advertisements — must be approved in advance by the Orthodox Union.

• The certified private label product may not contain or be bundled together with non-OU goods (such as a non-OU certified candy bar in an OU certified cereal, or an-OU certified jelly bundled together with a non-OU certified jelly).

Howard Katzenstein was born and bred in Manhattan. He graduated from the City College of New York with a B.A. in economics and business management. Previously, he served as director of a genetic screening program and taught high school biology. Currently, he is Director of Business Management and Trademark Compliance at the Orthodox Union. As the primary liaison to distributors, he has provided a free seminar on kosher to over 30 supermarkets and food service companies in their own headquarters.