Tuesday, November 12, 2013

Week 7 News Post

Nestle Subsidiary to Settle FTC False Advertising Charges; Will Drop Deceptive Health Claims for BOOST Kid Essentials

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Nestle HealthCare Nutrition, Inc., a subsidiary of Nestle S.A., the world’s largest food and nutrition company, agreed to drop deceptive ad claims about the health benefits of BOOST Kid Essentials drink--a nutritionally complete for children 1-13. A settlement resolving the FTC’s first case challenging probiotic ads was made (probiotics are natural bacteria known for helping with digestion and fighting bad bacteria).

Complaint charges from 2008 to 2009 were filed against Nestle HCN’s deceptive claims in TV and print ads for this drink. The probiotics in BOOST are embedded in the straw that comes with the drink which was featured in the ads. Ads claimed BOOST protects against colds and flu, prevents upper respiratory tract infections and reduces absences from school by strengthening the immune system. These claims that the probiotic drink would prevent kids from getting sick or missing school did not meet FTC scrutiny. The ads falsely claimed BOOST is clinically shown to reduce and protect kids from illness as well as helping them recover quickly from diarrhea.

Under the settlement, Nestle HCN agreed to stop claiming BOOST will reduce illness unless the claim is approved by the FDA; FDA approval is generally not needed for compliance with the FTC but they determined that requiring FDA pre-approval before Nestle HCN makes claims will provide clearer guidance and facilitate compliance. Nestle HCN also agreed to stop claims that BOOST will reduce sick absences and the duration of diarrhea in kids up to 13 if it is determined true by at “least two well-designed human clinical studies.” Nestle HCN is prohibited from making any claims about any benefits of probiotic and nutrition drinks unless claims are true and backed by competent, reliable scientific evidence. The FTC is helping parents by monitoring ads and stopping deceptive ones.

The Division of Advertising Practices is a division of the bureau and is the enforcer of federal truth-in-advertising laws focusing on: deceptive ads of fraud cure-all claims for dietary supplements and weight loss products, deceptive internet marketing practices for health issues, enforcement strategies for new ad techniques and media, ads of food to children like impacts on obesity, industry practices regarding marketing violent media, and alcohol and tobacco marketing practices. The puffery in this case was deceptive and advertisers did not have adequate substantiation for the claims made.

The FTC is made aware of potentially problematic ads by complaints from consumers, businesses, etc.; complaints were filed for a year about the claims Nestle HCN was making about BOOST. FTC investigations are generally nonpublic to protect the investigation and companies involved. A measure the FTC took to protect the public was a cease and desist order demanding Nestle HCN to stop the false health claims. A cease and desist order is contained within a consent order or a consent agreement. A consent order is for settlement purposes and does not constitute an admission of guilt by the advertiser. Nestle HCN agreed, so the FTC did not have to issue a litigated order to stop an ad claim filed in an administrative court. Substantiation gives the FTC authority to demand an advertiser prove its claims—to provide competent and reliable evidence for claims made. The FTC demanded Nestle HCN to sufficient evidence for their claims before they could be made again.

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