Dannon to Pay $21 Million to Settle Charges It Overstated Yogurt's Health Benefits

Dannon ActiviaA sweeping investigation into Dannon's nationwide marketing of its Activia and DanActive brands has resulted in the yogurt giant's agreeing to pay $21 million to 39 states to settle charges of deceptive advertising of its dairy products' health benefits.

The settlement, announced simultaneously by the Federal Trade Commission and by state attorneys general, resolves allegations that Dannon exaggerated the benefits to consumers of two popular products that contain bacteria known as probiotics. According to the FTC complaint, Dannon claimed its DanActive dairy drink could prevent colds and flu, and a daily serving of Activia could regulate the digestive system.

The case is the largest attorney general consumer protection multi-state settlement reached with a food producer, and serves as a warning to manufacturers making unsubstantiated health claims to promote their products.

Under state and federal law, manufacturers can only advertise the curative effects of approved drugs, and cannot associate such claims with food products. Further, the lawsuit alleged Dannon's claims were not backed by competent, reliable or legitimate scientific research, which runs contrary to Dannon's television, Internet and print ads that stated there was scientific proof.

"Companies are not entitled to make statements that they can't back up," said Oregon Attorney General John Kroger. Oregon, the lead state in the case, will receive $1.06 million under the agreement.

Dannon's misrepresentations were repeatedly aired in TV commercials featuring actress Jamie Lee Curtis telling viewers that many people suffer from digestive irregularity, and assuring them that a daily serving of Activia could help. In fact, clinical studies cited in the Texas attorney general's office's lawsuit suggest a person benefits only when he or she consumes three servings of Activia per day for two weeks.

Dannon in its advertising relied on a specious claim that Activia contained a bacterial strain with purported health benefits, trademarked under the name Bifidus Regularis.

State investigators also accused Dannon of improperly claiming its DanActive yogurt drink could boost the immune system and help prevent colds, flu and diarrhea in children. As with Activia, Dannon peddled DanActive as a product enriched with healthful bacteria, trademarked under the name L. casei Immunitas, that could improve the digestive system. According to regulators, both claims were unlawful because neither Activia nor DanActive has been approved by the federal government as a drug, and marketing foods as treatments for disease or illness is the legal equivalent of marketing unapproved drugs.

"These types of misleading claims are enough to give consumers indigestion," FTC Chairman Jon Leibowitz said in a statement. "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."

Under the terms of the agreement, Dannon is prohibited from claiming that any yogurt, yogurt drink, or probiotic product reduces the likelihood of getting a cold or the flu, relieves digestive irregularities, or offer any other health benefits, unless the claims are approved by the FDA.

Increase your money and finance knowledge from home

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »

Getting out of debt

Everyone hates debt. Get out of it.

View Course »

Add a Comment

*0 / 3000 Character Maximum