Kellogg’s escapes FTC fine over false immunity claims

By Shane Starling

- Last updated on GMT

Related tags Kellogg Ftc Federal trade commission Nutrition

The Kellogg Company will change immunity claims for Rice Krispies after the Federal Trade Commission (FTC) ruled the claims misleading – but ruled out a financial penalty.

Instead the agency hit the $13bn food giant with an expanded settlement order that applies to all Kellogg’s products and associated health claims, along with a stern and somewhat unusual “dissenting statement” ​from FTC commissioner Julie Brill, and chairman Jon Leibowitz.

The letter accused Kellogg’s of irresponsibly conceiving and engaging in the multi-million dollar immunity campaign conceived last year at the very same time it was settling another misleading mental health claims conviction with the FTC.

“What is particularly disconcerting to us is that at the same time that Kellogg was making promises to the Commission regarding Frosted Mini-Wheats, the company was preparing to make problematic claims about Rice Krispies,”​ wrote Brill and Leibowitz in their letter.

“We hope that the Commission action announced today communicates to industry that it has an obligation to be honest with the public, and that the FTC will act swiftly to challenge questionable health claims about children’s food products.”

Disgorgement of ill-gotten gains

But New York-based food and drug attorney, Marc Ullman, said the FTC action may look good PR-wise, but actually sent out a “terrible message”​, because it gave the impression of, ”unequal enforcement”.

“What is utterly befuddling about this action is that Kellogg’s have hit the Daily Double with this – immunity and misleading claims aimed at children – and still the FTC won’t fine them just because they are Kellogg’s.”

“Here is a company that has breached a prior order [in relation to the mental health claim action] and still the FTC won’t take money from them. Even if that prior order didn’t exist the FTC has the power to disgorge a company of all of its ill-gotten gains. Kellogg’s has shown itself to be a repeat offender and it should have been punished accordingly.”

Dan Fabricant, PhD, the Natural Products Association’s vice president of scientific and global government affairs, agreed, "it was bizarre the FTC didn't hit Kellogg's with a fine".

Heather Hippsley, an attorney from the FTC’s Bureau of Consumer Protection, told that the FTC was not in a position to fine Kellogg’s because the previous order was specific to the mental function claims and had not been breached on this occasion. But the company’s recalcitrance had spurred the FTC to expand the settlement order to all Kellogg’s products.

She said the agency’s criteria for misleading claims was determined by a panel of “experts in the area” ​– criteria that was a “flexible standard driven by the individual claim”.

Long history of responsible advertising

Kellogg’s issued a statement but was not available for comment when contacted by this publication. The statement read: "Kellogg Company has a long history of responsible advertising. We stand behind the validity of our product claims and research, so we agreed to an order that covers those claims. We believe that the revisions to the existing consent agreement satisfied any remaining concerns."

The claims, described by the FTC as ”dubious”​ included: “now helps support your child’s immunity” ​and “25 percent Daily Value of Antioxidants and Nutrients – Vitamins A, B, C, and E.”​ The FTC has the power to fine transgressors $16,000 per offending ad – a fact that led to Bayer recently agreeing to pay $2m for making misleading weight loss claims for its ‘One-a-day’ dietary supplements.

In their letter Brill and Leibowitz added of Kellogg’s: “The company clearly has the means and ability to carefully test its children’s food products to determine if the products in fact provide health benefits for kids. We are also confident that Kellogg has the wherewithal to carefully develop truthful and nonmisleading advertising about such health benefits. As a trusted, long-established company with a presence in millions of American homes, Kellogg must not shirk its responsibility to do the right thing when it advertises the food we feed our children.”

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