Bold and splashy "no cholesterol" claims on food packages would become a thing of the past for many products under a labeling proposal announced last week by Secretary of Health and Human Services Louis W. Sullivan.

The proposal, which requires that all products carry nutrition information, also defines three categories of permissible cholesterol claims. In recent years, manufacturers of many high-fat foods such as vegetable oils, potato chips, peanut butter and cookies have claimed that their products "contain no cholesterol."

"There's a lot of concern by consumers that it's misleading to say 'no cholesterol' or 'low in cholesterol' when there's a high level of fat and saturated fat," said Edward Scarbrough, acting director of FDA's office of nutrition and food sciences. Health authorities believe that saturated fat is the most powerful contributor to elevated blood cholesterol.

As a result, FDA is proposing that only products that contain less than 2 milligrams of cholesterol and less than 5 grams of fat per standardized serving can claim to be "cholesterol free." The product would also have to have less than 2 milligrams of saturated fat per serving.

Scarbrough said the agency derived these guidelines from recommendations that Americans get no more than 30 percent of their daily calories from fat, and from surveys that show people consume 16 individual servings of food a day.

"The FDA's proposal is fair to consumers in that it doesn't give a green light to foods that may be high in fat that say they are cholesterol-free," said Nancy Wellman, president of the American Dietetic Association. Wellman said that "no cholesterol" or "cholesterol-free" claims create the impression that the foods are "completely OK" and that they can be eaten in unlimited quantities.

Nevertheless, some of the industries making the claims are unhappy with the FDA's proposals.

"Our first reaction is that we're certainly opposed to them," said Robert Reeves, president of the Institute of Shortenings and Edible Oils, a trade group that represents manufacturers of both vegetable oils and animal shortenings. "I don't see anything confusing about putting 'no cholesterol' on a product that is high in fat or saturated fat. It's a valid and truthful claim. It either has cholesterol or it doesn't, regardless of the other constituents it contains."

Robert Nicolosi, a member of the American Heart Association's nutrition committee and a professor in the department of clinical science at the University of Lowell, objects to "no cholesterol" claims on vegetable oil. He feels that the consumer "assumes that the product is somehow unique. None of the vegetable oils have cholesterol," he said. At a conference he attended a few years ago, Nicolosi said he heard one industry source say that putting "no cholesterol" on a product enhanced the firm's sales by 35 percent.

CPC International -- maker of Mazola products, Hellmann's mayonnaise and Skippy peanut butter -- believes that prohibiting manufacturers of high-fat foods from making "no cholesterol" claims would create confusion rather than eliminate it.

"If finalized, the FDA's current cholesterol proposal would deny consumers access to important nutritional information. Clearly, information provided on the labels of consumer products has been a key element in correcting the false impressions of many consumers concerning foods which they think are high in cholesterol but which in fact are not," the company said in a statement.

At least one industry is concerned that no longer being able to put "no cholesterol" on its labels would put it at a unfair competitive disadvantage. Margarine manufacturers believe that if they can't put "no cholesterol" on their labels, shoppers will think the products are identical to butter.

If butter and margarine labels look the same, "people will possibly be led to believe that there's no health difference, when in fact, there's a very significant health difference," said Joseph Morris, associate director of the National Association of Margarine Manufacturers. Butter contains 31 milligrams of cholesterol per tablespoon; margarine contains zero. Each contains 100 calories and 11 grams of fat per tablespoon, but butter contains 7 grams of saturated fat while margarine contains 2.

In fact, the nutrition information on the back panel of both products would list all this data.

Consequently, "This kind of regulation needs to be accompanied by a campaign to turn packages over and read the nutrition information," said Wellman. "That's how consumers can really differentiate."

The 400-page document, which is scheduled to be published in tomorrow's Federal Register, proposes that all food products -- including fruits, vegetables and fresh seafood -- list nutrition information for calories, fat, calories from fat, saturated fat, cholesterol, sodium, dietary fiber, protein and carbohydrates. It also establishes standardized serving sizes for 159 food categories.

In addition, companies that make cholesterol claims or those that state their products contain "100 percent vegetable oil" or "no animal fat" would be required to list the amount of polyunsaturated fat.

Cholesterol Categories

Under the Food and Drug Administration's proposal for cholesterol labeling, the following claims could be made on food packages:

Cholesterol free: Less than 2 mg. of cholesterol per serving. Less than 5 grams total fat per serving and less than 2 grams saturated fat.

Low cholesterol: 20 or less mg. of cholesterol per serving. Less than 5 grams total fat per serving and less than 2 grams saturated fat.

Reduced cholesterol: 75 percent or less cholesterol than the original product.