Dannon on FTC settlement: “Our claims remain intact”

16-Dec-2010 - Last updated on 16-Dec-2010 at 17:56 GMT

Dannon will continue making digestive health claims for Activia

Dannon says its year-long negotiations with the Federal Trade Commission that resulted in a $21m settlement and modifications placed on its health statements, has not altered the core claims for its multi-million dollar selling probiotic yoghurts.

The North American subsidiary of French dairy giant Danone said it would continue marketing spoonable yogurt Activia with digestive health claims and linking drinkable yogurt DanActiv with immunity.

“After three rigorous reviews we continue to market the products as per usual,” Dannon spokesperson Michael Neuwirth told NutraIngredients-USA.com, while highlighting the fact Dannon admitted no wrongdoing in the settlement.

He said the $21m figure was arrived at to reimburse 39 state Attorney Generals who had conducted investigations into Dannon’s marketing activities, but which were now resolved.

Neuwirth noted only $1m had been claimed of a potential fund of $35m that had been established in a 2009 class action settlement, although the remainder of the fund would be paid to charities beginning in 2011.

New claims criteria

The FTC settlement highlighted that Activia could only be marketed to, “relieve temporary irregularity or help with slow intestinal transit time” if it was also stated that three servings per day were required to achieve the benefit.

Neuwirth said Dannon “may well use” such a claim.

Otherwise the FTC reiterated a “two well-designed human clinical studies” claim substantiation standard expressed in earlier settlements with Nestle and Iovate Health Sciences, if Dannon wanted to make the claims without the ‘three servings pr day’ disclaimer.

Under other terms of the settlement Dannon must not claim, “that any yogurt, dairy drink, or probiotic food or drink reduces the likelihood of getting a cold or the flu, unless the claim is approved by the Food and Drug Administration.”

While forming part of the settlement Dannon insisted it had never made such claims.

Ingredients versus products

New York-based food and drug attorney, Marc Ullman, said the settlement demonstrated how refined the art of claim making was becoming as both the FDA and FTC directed greater scrutiny upon them.

“This is a reminder that if you are going to claim that your product is clinically proven to do something, then you need clinical studies on the product,” he said. “If all you have are studies on the ingredients, then you need to say so. If all you have are in vitro or animal studies, then you can’t claim to have clinical studies.”

“I certainly don’t know enough about Dannon’s science to comment, though I would imagine that the company would have contested the matter more rigorously if it had human trials on its specific product that directly supported its claims.”

Ullman said the settlement even favoured Dannon in that there was no requirement for financial restitution.

“I think that industry needs to be concerned about the FTC’s disparate treatment of small as opposed to large companies, as its posture toward smaller companies has been one of utter inflexibility and refusal to compromise.”

Chilling effect on speech

Virginia-based attorney Jonathan Emord said the settlement reflected a level of scientific substantiation that was amounting to censorship of health benefit advice to the public.

“If the evidence is credible, but not conclusive, the consumer is best served not by government intimidating parties into saying nothing but by government requiring use of a claim qualification revealing the inconclusiveness of the claim. The FTC’s method causes a chilling effect on speech by all in the market just as powerful as if it imposed a prior restraint.”

He added: “The real losers in all of this are consumers. Denied credible science, they will be left to guess about whether Dannon’s product provides any benefits. Moreover, Dannon will now have no incentive to invest in further research to improve upon the health enhancing effects of its products.”

In the settlement, FTC Chairman Jon Leibowitz said: “These types of misleading claims are enough to give consumers indigestion. Consumers want, and are entitled to, accurate information when it comes to their health. Companies like Dannon shouldn’t exaggerate the strength of scientific support for their products.”

The settlement can be found here.