"Zero Sugar" Isn't Zero Risk: The Seventh Circuit Says Allulose Is a Sugar in Franco v. Chobani
On July 27, 2026, the Seventh Circuit handed food and beverage marketers one of the most consequential labeling decisions in years. In Franco v. Chobani, LLC, No. 25-2087, the court reversed the dismissal of a putative consumer class action and held that allulose is a "sugar" under 21 C.F.R. § 101.9(c)(6)(ii) — meaning a yogurt containing four grams of allulose per serving could not lawfully be marketed as "Zero Sugar," and the plaintiffs' state-law deception claims were not preempted.
If your product relies on FDA enforcement discretion to support a front-of-pack claim, this opinion should change how you evaluate that risk.
The Setup
The plaintiffs bought Chobani Zero Sugar yogurt in 2023. The product carried prominent "zero sugar" claims but contained four grams per serving of allulose, a naturally occurring rare sugar. They sued under dozens of state consumer protection statutes, alleging deceptive marketing.
The entire case turned on a definitional question. Under the FDCA's express preemption provision, 21 U.S.C. § 343-1(a), states may impose food labeling requirements identical to federal requirements but nothing more. So if allulose is a "sugar" under federal law, the plaintiffs were enforcing an identical standard and could proceed. If it isn't, their claims exceeded federal requirements and were preempted.
The Northern District of Illinois deferred to FDA's 2020 Allulose Guidance, in which the agency announced it would exercise enforcement discretion to allow exclusion of allulose from "Total Sugars" and "Added Sugars" declarations pending future rulemaking, found the claims preempted and dismissed.
The Holding
The Seventh Circuit reversed on both grounds Chobani raised.
The regulation's text is unambiguous, and allulose is in. Section 101.9(c)(6)(ii) defines "Total Sugars" as the sum of all free mono- and disaccharides, followed by a parenthetical listing glucose, fructose, lactose, and sucrose. Chobani argued — invoking the surplusage canon and noscitur a sociis — that the parenthetical narrows the definition to substances sharing the same nutritional characteristics as those four sugars. The court disagreed: because the definition reaches every monosaccharide and the parenthetical is merely illustrative, allulose qualifies. As Judge Kirsch framed it, FDA defined a class by way of chemistry and reinforced that definition with examples that all share the same chemical structure. The agency could have defined total sugars by physiological effect; it did not.
Enforcement discretion is not interpretation — and gets no Auer deference. This is the part every regulatory affairs team should read twice. The court held the district court erred in deferring to the Allulose Guidance for two reasons: the regulation isn't ambiguous, so there was no plausible reason for deference under Kisor; and the Guidance wasn't the agency's official interpretation of § 101.9(c)(6)(ii) at all — it was an announcement of a change in enforcement policy.
A federal agency's decision not to enforce doesn't bind the states. Chobani argued it had relied on the Guidance and had even secured a marketing permit after FDA approved its zero sugar labeling. The court was unmoved: the fact that one sovereign said it would not enforce its labeling requirements should not have led Chobani to believe the states would take a similar approach, and the marketing permit said nothing about state-law consumer protection suits. Chobani, the court noted, is a sophisticated actor that should have known FDA's enforcement priorities would not immunize it from state-law claims.
Deception was plausibly pled. Chobani argued that reasonable consumers care about avoiding the health consequences of traditional sugars, not about the presence of monosaccharides as such. The court answered that whether reasonable consumers care about allulose isn't the same question as whether they'd be deceived by the label — and given the absolute promise of "sugar free," the allegation wasn't implausible.
Note the procedural posture. The court also flagged that FDA weighed in as amicus at the panel's request — both parties agreed at oral argument that the agency's view would be helpful — and that FDA took the position that the text is unambiguous and captures all monosaccharides. Post-Loper Bright, the court credited that view under Skidmore because it was thorough, well-reasoned, and consistent with FDA's own 2016 rulemaking statements.
What This Means for Your Labels
Front-of-pack claims are the exposure, not the Nutrition Facts panel. FDA's enforcement discretion on the Total Sugars and Added Sugars declarations remains in place as a matter of federal enforcement policy. But § 101.60(c)(1) permits a "sugar free" or "zero sugar" claim only if the food contains less than 0.5 g of sugars. Under the Seventh Circuit's reading, that cross-reference is fatal to the claim on an allulose-sweetened product. The realistic risk isn't an FDA warning letter — it's a class action in Chicago.
Audit any claim that depends on a guidance document. The reasoning here is not about allulose. It's about the structural gap between what a regulation says and what FDA has said it won't enforce. Any product whose marketing rests on an enforcement discretion letter, a compliance policy guide, or an "intent to exercise enforcement discretion" announcement sits in the same gap — dietary supplements and novel ingredient categories very much included.
Venue matters. The Seventh Circuit covers Illinois, Indiana, and Wisconsin, and the Northern District of Illinois is a magnet forum for food labeling class actions. Expect copycat filings. Expect the reasoning to be cited well beyond the circuit.
Revisit your supply chain paper. If a co-packer, formulator, or ingredient supplier represented that an allulose-sweetened formulation supported a zero sugar claim, now is the time to review indemnification, representations and warranties, and product liability coverage — before a demand letter arrives.
This isn't the last word. The decision reverses a Rule 12(b)(6) dismissal; it does not resolve the merits. Chobani expressly preserved additional arguments for the district court on remand, including a separate preemption theory grounded in FDA's approval of its labels and the Supreme Court's June 2026 decision in Monsanto Co. v. Durnell. Rehearing and certiorari petitions are also possibilities. And FDA could, at long last, do the rulemaking it has been promising since 2020.
The Practical Takeaway
Regulatory compliance and litigation risk are not the same thing. A company can be perfectly safe from federal enforcement and still be exposed under fifty state consumer protection statutes — because express preemption only shields you from non-identical state requirements, and a non-enforcement policy doesn't change what the regulation requires. If your label is riding on a guidance document, you are relying on FDA's forbearance, not on the law.
If you sell a product sweetened with allulose or another ingredient whose treatment rests on FDA enforcement discretion, Morsel Law can review your labeling and claims substantiation. Contact us to discuss your portfolio.