Company Cites Appearance of Impropriety and other Concerns over Trade Association Filing
Ghent, NY – Citing concerns over the appearance of impropriety, in a letter dated October 10, 2007, Bioforce USA has advised the National Advertising Division of the Better Business Bureaus (NAD) that it would decline to participate in an advertising review of one of its products and asked that the challenge be withdrawn. The specific reasons enumerated in the letter all relate to the fact that the so-called, “competitive challenge” had been directly initiated by the Council for Responsible Nutrition (CRN) on behalf of itself and its members.
The “competitive challenge,” filed on September 12, 2007 was made in connection with claims made for “Curbita,” a German pharmaceutical GMP-certified pumpkin seed oil dietary supplement distributed in the U.S. by Bioforce USA. CRN challenged structure and function claims being made for the product, such as that the product “helps strengthen bladder muscles” and “helps support normal emptying of the bladder,” claims that have been confirmed for decades by both science and traditional use. While the manufacturer can cite more than 90 references regarding the safety and efficacy of this ingredient, Bioforce USA chose not to participate because it believes that it is utterly inappropriate for CRN to file direct complaints with the NAD under a program for which CRN provides direct funding to the NAD that then acts as both judge and jury in such matters.
Bioforce USA would first like to emphasize that it applauds CRN and NAD for their efforts at developing a bona fide self-regulation initiative. Public trust will be important to the future of the industry and such initiatives, if well-conceived and executed can be a cornerstone of gaining that trust. The current manner in which CRN and NAD work together, however, does not meet this standard for several reasons. These reasons that bring in to question the appearance of impartiality and transparency of the process represent critical issues for the industry to consider as it begins to effectively develop systems of self-regulation.
First, CRN is not a competitor to Bioforce, but rather a trade association advocating for the dietary supplement industry in general, and its membership specifically. By filing challenges in its own name and on behalf of its limited membership, CRN removes the ability for the challenged company to review any advertising claims made by its real challenger, presumably one or more member CRN companies. Allowing CRN to file “competitive advertising” challenges on behalf of its members serves to protect CRN members that may be making the identical claims, and forces non-member companies such as Bioforce to expend significant resources defending their advertising. It also gives the appearance of a powerful trade association and its membership bullying a relatively small company. Moreover, there is no transparency or even explanation as to how and why CRN chose to bring its challenge against Bioforce, a non-CRN member. This kind of potentially anti-competitive behavior by an industry trade association has no place in the self-regulatory process.
Second, when CRN and NAD launched the self-regulatory process and in the current CRN advertising campaign, “There’s a New Sheriff in Town,” it is explicitly stated that CRN “exerts no influence over the NAD’s decisions of which advertising to investigate.” The fact that CRN, in its own name and on behalf of its membership, uses the NAD to bring advertising challenges is evidence enough that CRN has more than a little influence.
Finally, this NAD program and a number of its reviewing lawyers are funded in a very large part by CRN. According to CRN, its grants will total almost “half a million dollars over three years.” Such direct funding creates the appearance of impropriety when CRN can use NAD to directly initiate a complaint against a non-CRN member. Moreover, as stated in CRN’s backgrounder, “NAD examines dietary supplement advertising challenges reported by consumers and competitors, as well as advertising identified through NAD’s monitoring process.” As the self proclaimed “leading trade association representing dietary supplement manufacturers and ingredient suppliers,” CRN does not fall within a category of entities that should be bringing so-called “competitive” NAD challenges.
We, as a responsible member of the industry, appreciate the fact that CRN has helped to fund this initiative, but that’s as far as it should go. After that it should be hands off. If a CRN member company wishes to challenge a competitor, it should do it on its own account. CRN should continue with its mandate of industry advocacy and not take it upon itself to influence the NAD review process.
Contact information: Pierce Sioussat, President
Ullman, Shapiro, Ullman, LLP