FTC Hammers Kellogg for Ad Claims, But Why No Fine?

The U.S. Federal Trade Commission announced yesterday that it was settling a false advertising case that further illustrates why I, as a parent, rarely pay attention to advertising—particularly when it comes to health claims made about children. The proposed settlement involved print, TV and Internet advertising statements cereal giant Kellogg Co. made about its Frosted Mini-Wheats, which the company said improved children’s attentiveness by nearly 20%.

According to the FTC, Kellogg was misrepresenting a study which actually found that only about half the children who ate Frosted Mini-Wheats for breakfast showed any improvement in attentiveness, and only about one in nine improved by 20% or more. The FTC called Kellogg’s claims false and said they violated the law, but the cereal company’s only punishment (other than the bit of bad press the company received over the phony advertising statements) is that it must stop making false claims about its Frosted Mini-Wheats. The company is also barred from misrepresenting future research in any advertising.

That’s it. Unlike some other false advertising settlements, this one involves no monetary fine or penalty for Kellogg—and that has at least one nutrition industry executive perplexed. “Almost every case like this in the supplement industry ends up with the company paying whatever it has left from its sales of the product to the FTC as consumer restitution,” Marc Ullman, a partner with New York's Ullman, Shapiro & Ullman law firm, told me via e-mail yesterday. “I guess this case indicates that it’s OK for Kellogg to keep the money it tricked parents into paying for its cereals with the bogus claims.”

The FTC’s proposed settlement—which the commission pointed out “does not constitute an admission of a law violation” on the part of Kellogg—is open for public comment through May 19. After that date, the commission will determine whether to finalize the agreement. Once it becomes final, Kellogg could be subjected to a fine of $16,000 and other penalties should the company break the terms of the agreement.

Kellogg issued a statement yesterday saying, “We stand behind the validity of our clinical study yet have adjusted our communication to incorporate FTC’s guidance.”

The Center for Science in the Public Interest (CSPI) called Kellogg's Frosted Mini-Wheat claims "laughable on their face" and said they "never should have surfaced in an advertising campaign by a major food manufacturer." The public watchdog organization also used the FTC settlement news to call for Kellogg to begin removing Blue 1, Blue 2, Red 40 and other synthetic food dyes from some varieties of its Mini-Wheats products. “Those dyes exacerbate some children’s hyperactivity and behavioral problems and have no place in foods aimed squarely at children,” CSPI said in a statement.

Although Kellogg said it is in full compliance with Food and Drug Administration regulations regarding its use of food dyes, the CSPI’s call dovetails with growing consumer demand for kids’ food and beverage products that are free from artificial colors and flavors.

Nutrition Business Journal’s U.S. Healthy Kids’ Market Overview issue includes discussion of this and other healthy kids' food and beverage product trends and explains some of the steps Kellogg has taken over the last several years to improve the nutritional value of those cereals it markets to children under age 12.

Available this month, the issue also provides a detailed analysis of the recession-resilient children’s nutrition market by these product categories: natural & organic foods and beverages, functional foods and beverages, supplements, and natural & organic personal care and household products. To order a copy of the issue, subscribe to NBJ or download a free 32-page sample issue, go to www.nutritionbusinessjournal.com.

Related links:

Breakfast Foods Look to Healthy and Functional Platforms for Growth

Going With The Grain: Major Manufacturers Launch Breakfast Bars and Healthy Cereals

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