The latest reminder that manufacturers must consider the costs and benefits of promoting health and nutrient content claims on product labeling:
Campbell’s Soup Company recently paid $1.4 million to settle a class action lawsuit that alleged its “Low Sodium” tomato soup labeling misled consumers. The soup allegedly contained the same amount of sodium as the company’s regular soup, but Campbell’s sold it for a premium price. (The complaint also alleged Campbell’s Healthy Request tomato soup claimed it was “Low in Fat,” even though it contained more fat than the company’s regular soup.)
Campbell’s denies liability and contends it complied with applicable laws.
The purpose of this posting is not to comment on the factual or legal support for the parties’ claims or defenses. The issue is that regardless of the merits, defending and resolving lawsuits arising out of product labeling claims can be very expensive. Companies that invest proactively to minimize their litigation risks may avoid incurring these costs.
Yale University’s Rudd Center for Food Policy and Obesity recently published a study that found parents often misinterpreted the meaning of nutrient content and health claims presented on kids’ cereals. The cereals included an “average [of] 3.1” “nutrition-related” messages per box, but they also contained an average of 35 percent added sugar by weight.
The study concluded that its participants misinterpreted the claims in two ways. First, they “inferred” that the sugary cereals were “more nutritious” than competing products, despite their “below average . . . nutritional quality.” Second, they attached broader meanings to the manufacturers’ health claims than their “literal interpretation.” For example, 74% of the parents believed that an “‘antioxidants and vitamins’ (i.e. immunity) claim meant it might keep their child from getting sick.”
Most critically, the authors concluded the parents’ “beliefs predicted greater willingness to buy the cereals.” Please recall my article regarding the Kwikset case that allowed a false advertising class action to proceed, because claims on “labels matter.” Manufacturers of foods that some authors may deem have “below average . . . nutritional quality” may want to conduct a cost-benefit analysis evaluating the potential increased sales from advertising health claims against the risk that findings like those from the Yale study may support an unfair competition class action claim, as well as possible negative publicity in the court of public opinion. Public interest groups may also attempt to support efforts to expand the jellybean rule to further limit manufacturers’ use of these claims.
Please see my new article in Food and Beverage Packaging regarding exaggerated labeling claims and potential liability for false advertising and unfair competition.