No less than three breakfast cereals have recently been under the legal spotlight in high profile Stateside spats. Could one improve a child’s attentiveness, did another lower chloresterol and did a third contain fruit since it contained “Crunchberries”? Andy James reports from Osborne Clarke’s Silicon Valley office on the travails of Kellogg’s and General Mills and one victory in three.
Topic: Food
Who: US cereal companies Kelloggs and General Mills, the US Food and Drug Administration (the "FDA"), the US Federal Trade Commission (the "FTC"), and an individual who believed in "Crunchberry" trees.
When: April and May 2009
Where: USA
Law stated as at: 30 June 2009
What happened:
In three separate cases, the multinational US cereal companies Kelloggs and General Mills were forced to defend various labelling and marketing claims in relation to their cereals. Kelloggs was brought to court by the FTC over its claims that the cereal was "clinically shown to improve kids' attentiveness by nearly 20%", and by an individual bringing a class action over the misleading name of "Cap'n Crunch with Crunchberries". General Mills faces a claim by the FDA that its Cheerios should be classified as a drug following claims on the boxes that "clinically proven to lower cholesterol".
Of the three cases, Kelloggs won the private claim, settled the FTC case, whilst the General Mills case is ongoing.
Sugawara v Kelloggs – When a berry is not a fruit…
The private claim appeared to be the simplest case – the claimant asserted that the labelling of the Cap'n Crunch cereal led her and others to believe that the cereal contained a real fruit called "Crunchberries". This claim was dismissed by the judge as not a conclusion that the reasonable consumer would come to (although this doesn't appear to have been helped by the claimant's admission that a close inspecion of the box revealed that "Crunchberries…are not really berries").
Unfortunately for Kelloggs and General Mills, the claims of the FTC and the FDA against them appear to be more grounded in the real world.
FTC vs Kelloggs – Frosted Mini-Wheats increasing attentiveness
Kelloggs was forced to settle with the FTC after allegedly misrepresenting the results of a survey in relation to its Frosted Mini-Wheats: the FTC claimed that the survey results only revealed about half of the children had any increased attentiveness, whilst only one in nine increased by the claimed 20%. Although Kelloggs was not fined as part of the settlement, it was prohibited from making any future misleading claims of this type or misrepresenting any study in the future.
This appears to be a final warning shot against this sort of advertising, with the FTC Chairman warning marketers in the statement announcing the statement that "[i]n the future the Commission will certainly be more attentive to national advertisers".
FDA vs General Mills – GM may have to say "Cheerio(s)" to cholesterol reducing claims
General Mills are facing a somewhat different perspective with regards to its packaging of Cheerios, with the FDA taking issue with the claims that eating them for 6 weeks can reduce cholesterol by up to 4%. The FDA is at present not taking issue with the health statement itself. Instead it is claiming that advertising the health benefits in such a way as to imply that the product is intended to reduce cholesterol means that Cheerios should be treated for legal purposes as a cholesterol lowering drug. As such, Cheerios should be subject to the vigorous testing requirements of such drugs, none of which General Mills has complied with.
With General Mills claiming that its labelling has been approved for 12 years, discussions with the FDA are continuing as to this apparent new classification, and more importantly all of the legal and commercial impacts of this classification.
Why this matters:
Whilst there is comfort (and perhaps some light relief) for food marketers and labellers to be drawn from the dismissal of the wildly unrealistic claims that cereal advertised with "Crunchberries" or similar equivalents would mislead consumers, the serious side to these cases shows the US regulators are willing to use their powers (to their fullest possible extent) to curtail any assertions not based on fact. The cases illustrate the seriousness with which both the FTC and the FDA are now taking claims in this sector that are regarded as misleading or false.
Whether this cases would all proceed in a similar way in the UK and Europe cannot be a complete certainty, but in the UK the making of specific health-improving claims for foods can definitely create similar risks that the product being advertised will be regarded as a medicine. If there is no licence for the "medicine" its advertising will be in breach of statute, whilst nutritional and health claims for food generally are now subject to a strict Brussels-dictated regime thanks to EC Regulation 1924/2006 on Nutrition and Health Claims Made on Foods.
Andy James
Associate
Osborne Clarke, Silicon Valley
andy.james@osborneclarke.com
