When "Sugar Free" suddenly isn't free of sugar

A Seventh Circuit decision has prompted a wave of class actions challenging “sugar-free” and “zero sugar” label claims on products containing allulose. On July 27, 2026, the court held that allulose is a sugar under FDA labeling regulations and that FDA enforcement-discretion guidance does not shield manufacturers from state-law consumer-deception claims. Franco v. Chobani, LLC, 184 F.4th 599 (7th Cir. 2026).

The Decision

The plaintiffs challenged Chobani Zero Sugar Yogurt, which contained four grams of allulose per serving. Under FDA regulations, a product that is advertised as “sugar-free,” “zero sugar,” or that makes similar claims, must have less than 0.5 grams of sugars per labeled serving, among other requirements. 21 C.F.R. § 101.60(c)(1). The regulations define total sugars to include all mono- and disaccharides. 1 C.F.R. § 101.9(c)(6)(ii). It is undisputed that allulose is a monosaccharide.

So, allulose is a sugar, right? Not so fast. In 2020, the FDA issued guidance that, pending future rulemaking, it would exercise its enforcement discretion and not prosecute manufacturers that excluded allulose from total sugar counts. Since then, companies have reasonably relied on that guidance by labeling products “sugar-free” and “zero sugar,” despite the presence of allulose, and the FDA has neither pursued enforcement against them nor completed rulemaking to alter its prior non-enforcement position. On that basis, the defendant in Franco argued that the plaintiffs' claims were preempted by the Federal Food, Drug, and Cosmetic Act, inasmuch as plaintiffs’ state law claims sought to impose a requirement different from, and in addition to, those required by the FDA.

Upon the court’s request, the FDA filed an amicus brief and stated its position that allulose is a sugar that must be included in the calculation of total sugars for product labeling purposes. The court agreed and found that, because the plaintiffs sought to enforce requirements identical to federal law (i.e., that allulose is a sugar that must be reflected in total sugar counts), their state-law claims were not preempted. The court also found that the plaintiffs had plausibly alleged consumer deception, allowing the state-law claims to proceed past the motion to dismiss stage. 

In the end, the Seventh Circuit found that, in this instance, the FDA’s decision not to enforce a requirement did not undermine the viability of private state-law claims. The court characterized the FDA's 2020 guidance as “an announcement of a change in enforcement policy,” not an interpretation entitled to judicial deference. Accordingly, products labeled as “sugar-free” or “zero sugar” face potential litigation exposure if total sugars, including allulose, reach 0.5 grams or more under the applicable measurements.

The Fallout

Since the decision, we have identified at least 60 new class actions targeting “sugar-free” and “zero sugar” claims on products containing allulose (and the number grows every day). The Seventh Circuit's decision only binds federal courts within its jurisdiction (covering Illinois, Indiana, and Wisconsin), but other jurisdictions may treat it as persuasive authority. Of course, other courts may reject the Seventh Circuit's approach, and the FDA could still undertake rulemaking to enshrine its previous non-enforcement position.

What to do now?

Audit claims. Identify “sugar-free,” “zero sugar,” “0g sugar,” and similar claims on products containing allulose or other rare sugars and assess whether they meet the less-than-0.5-gram threshold under the required measurements.  If they don’t, consider relabeling or reformulation.

Reassess reliance on guidance. Do not assume that FDA enforcement discretion is protection against private state-law claims.

Evaluate contractual protections. Review risk-allocation terms and, where applicable, dispute-resolution and indemnification provisions.

Monitor developments. Track FDA rulemaking, decisions outside the Seventh Circuit, and potential challenges involving other sugars.