By Granth Vanaik

July 2 (Reuters) - The U.S. Food and Drug Administration

said on Tuesday it would revoke the regulation that authorized

the use of brominated vegetable oil in food items, effective

Aug. 2, as it was no longer safe.

BVO is a chemical ingredient containing bromine, which is

found in fire retardants. Small quantities of BVO are used

legally in some citrus-flavored drinks in the United States to

keep the flavor evenly distributed.

The FDA said it had concluded that BVO was not safe for use

after the results of studies, it conducted in collaboration with

the National Institutes of Health, found the potential for

adverse effects in humans.

The agency had first proposed to revoke the regulation in

November last year.

According to the Center for Science in the Public Interest,

BVO was banned in the UK in 1970, followed by India in 1990, the

EU in 2008 and Japan in 2010.

In 1970, the FDA had concluded that its use in food was not

generally recognized as safe because of toxicity concerns. After

this, the agency began regulating BVO as a food additive, while

simultaneously conducting safety studies.

"The FDA's new regulation to not allow BVO as a food

additive is a terrific positive in the right direction," said

Michael Ashley Schulman, chief investment officer at Running

Point Capital Advisors.

As per FDA rules, whenever a company was using the

ingredient in any product, it was necessary to list it on the

label.

Over time, many beverage makers have replaced BVO with an

alternative ingredient, according to the FDA. "Today, few

beverages in the U.S. contain BVO," it said.

Companies such as PepsiCo ( PEP ) and Coca-Cola have

removed BVO from their drinks such as Gatorade and Fanta,

respectively.

"We are aware of the recent FDA action regarding the use of

BVO in food. Walmart ( WMT ) has been working with private brand

suppliers to reformulate products," a Walmart ( WMT )

spokesperson told Reuters in an emailed statement.

"Currently, there are very few Walmart ( WMT ) private brands items

that still contain BVO, and we expect them to be reformulated in

advance of the FDA compliance date," the spokesperson added.

Keurig Dr Pepper ( KDP ) still uses BVO in its Sun Drop

sodas in the U.S.

The company is actively reformulating the drink to no longer

include the controversial ingredient, it said in an emailed

statement to Reuters on Wednesday, adding that it would remain

compliant with all state and federal regulations.