Making a claim about a product is at the center of marketing, and for food sector businesses, this couldn't be more true. Consumers are constantly on the lookout for healthier products, more natural foods and other specialized products, and without proper advertising claims, food companies would miss out on potential customers every day. However, this doesn't mean food claims should be issued without thought; an untrue or misleading claim could lead to fines and class-action lawsuits that can potentially cost businesses millions.
ICYMI: Just last Friday, we published a blog entitled "Class Action Lawsuits Call Food Claims into Question." It seems great minds think alike, as over the weekend, the Los Angeles Times published an excellent piece entitled "Too good to be true? More food companies settling over questionable advertising claims." The piece chronicles the trials and tribulations of Neurobrands LLC, Nutella, Naked Juice and Vitaminwater as they dealt with various court cases centered around health-centric claims. The piece also showcases how these lawsuits are becoming big business: UCLA, UC Berkeley and Harvard University have all added food law departments or classes to deal with the rush of food safety issues. It also highlights California as the epicenter of the outbreak of food-related claims litigation:
"But others say the trend is another example of frivolous lawsuits and liberal California laws. So many food-related suits have been filed in the Northern District of California — where jurors are assumed to be liberal and health-conscious — that it’s known as 'The Food Court.'"
Over the weekend, another prominent brand was implicated in a potential class-action lawsuit: PepsiCo's Quaker Oats brand is under fire from New York and California consumers. The product is advertised as "100% natural" but consumers are arguing that the presence of glyphosate (the active ingredient in weedkiller Roundup) negates the claim. For what it's worth, the level of glyphosate is well below levels established by federal regulators, but the consumers may have a point to argue in court.
While it remains to be seen what will happen with Quaker Oats, food industry executives should be prepared for anything, and that includes potential blow-back from consumer advocacy groups about marketing claims. To be better prepared for future claims, read ourPrimer about the Ongoing Epidemic of Class Action Lawsuits Challenging Food Claims.
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at email@example.com to talk about anything food-related.
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