Caramel Color Class III is permitted by the US FDA. Several countries restrict, warning-label, or have reviewed it for safety concerns. The US has more lenient additive rules than the EU, UK, Canada, and Japan, which is why this ingredient remains widely used here.
The 4-MEI byproduct from ammonia-processed caramel colors was classified by IARC as a possible carcinogen (Group 2B) in 2012, based on mouse studies showing increased lung tumor incidence. California's Office of Environmental Health Hazard Assessment (OEHHA) classified 4-MEI as a carcinogen under Proposition 65 in 2011, requiring warning labels on products exceeding 29 mcg per serving. EFSA reviewed 4-MEI and in 2011 concluded there was no safety concern at expected dietary exposures, though the class B carcinogen designation remains.
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