30 December 2010, U.S. – The Dannon Company could not back claims of its yogurt and dairy products made in National advertising and must now pay $21 million to settle the Federal Trade Commission charges.
Dairy drink DanActive, which is made by Dannon, was being advertised nationwide that the drink helped prevent cold and flu. One daily serving of Activa, also made by Dannon, was said to relieve temporary digestive irregularity and help with “slow intestinal transit time”.
These exaggerated claims of health benefits provoked a complaint by attorneys general of 39 states with the FTC against the Dannon Company.
It is both a state and federal law that all claims about health benefits of products made by companies must be must be backed by competent and reliable scientific evidence. The lawsuit was filed when the FTC could not find sufficient backing to the claims made.
The outcome is a first, “the largest multi-state settlement to date involving a food producer”, according to Pennsylvania attorney general Tom Corbett. This is a good warning to other companies pushing the limits of the health benefit claims of their products.
Jon Leibowitz, Chairman of the Federal Trade Commission, said in his written statement that “consumers want, and are entitled to, accurate information when it comes to their health”. “Companies like Dannon shouldn’t exaggerate the strength of scientific support for their products.”
Besides the $21 million settlement the Dannon Company must pay to the 39 states whose attorneys general originally filed the complaint, they are prohibited from making any claims of health benefits, safety and efficacy of its probiotic products without the Food and Drug Administration’s substantiation of said benefits. Getting FDA approval is not typical but it was felt necessary by the FTC to ensure compliance to the settlement.
This is Dannon’s second lawsuit. The first was a class-action suit that resulted in $35 million to be paid to consumers for their claims.