Laura Rude-Barbato, a coffee shop owner in Imperial Beach, California, used to feed her children Nutella several times a week.
It was easy to identify with the advertising that depicted a frenzied mom serving up the chocolate-hazelnut spread with the tagline “breakfast never tasted this good,” said Rude-Barbato. Then she noticed the 10.5 grams of sugar per tablespoon.
“I had no idea,” she says. “I might as well have been giving my kids a brownie for breakfast.”
Rude-Barbato kicked the Nutella habit, then joined a class action lawsuit in a federal court in California that claimed Ferrero SpA’s U.S. unit misled consumers via labeling and marketing into thinking Nutella was healthy. In January, Ferrero settled the case and a similar one brought in New Jersey, without admitting guilt, for almost $7 million.
It turns out Rude-Barbato is no outlier. In 2011, Battle Creek, Michigan-based Kellogg Co. (K:US) consented without admitting guilt to a $5 million settlement in a class action claiming it touted Cocoa Krispies and Rice Krispies as helpful to children’s immunity without any clinical studies to back up the marketing.
Danone SA (BN), the world’s biggest yogurt maker, was targeted in a false-advertising lawsuit in a federal court in Ohio, claiming the company lacked conclusive evidence to say its Activia and DanActive products prevented illness. The company agreed in 2009 to pay consumers and lawyers at least $35 million. The company says it stands by its advertising.
Stephen Gardner, litigation director for the Center for Science in the Public Interest, a Washington-based consumer advocacy group, says all he has to do to find candidates for such cases is conduct yearly “supermarket sweeps.” In 2011 his group filed a federal lawsuit in California against General Mills Inc. (GIS:US) for marketing Fruit Roll-Ups, Fruit by the Foot and Fruit Gushers as “fruit flavored.”
CSPI says the snacks mostly consist of sugars, and Strawberry Fruit Roll-Ups don’t have any strawberries in them.
“We stand behind our products and the accuracy of the labeling of those products,” said a spokeswoman for Minneapolis-based General Mills, Maerenn Jepsen.
Jack Fitzgerald, a lawyer in California, said suing food makers can be more lucrative than the patent law practice he left in 2010. He’s among a group of lawyers that was awarded about 66 percent, or $4.6 million, of the Nutella settlements.
Fitzgerald is also representing consumers suing PepsiCo Inc. (PEP:US)’s Quaker Oats for touting some of its oatmeal and granola as wholesome even though they contain trans fats. Quaker declined to comment. He’s filed a similar case against Northfield, Illinois-based Kraft Foods Inc. (KFT:US)
“We do our best to make sure our labels give consumers accurate and useful information that complies with applicable government regulations and is presented responsibly,” said Basil Maglaris, a spokesman for Kraft.
Angel Garganta, a San Francisco-based attorney who defended Dannon, said a lot of these cases are “kind of silly.”
“Most consumers don’t care,” he said. “You tell them what these cases are about, and the responses are, ‘You’re kidding, someone is suing over that?’”
The Food and Drug Administration has the power to enforce rules requiring food and drink labels to be truthful. Yet it doesn’t always have the bandwidth to do so, said Marion Nestle, professor of nutrition, food studies and public health at New York University.
“So private lawyers are going into action,” she said. “They’re making real progress.”
Companies are overhauling their advertising as part of the settlements. On its Nutella labels, Ferrero consented to swapping “an example of a tasty yet balanced breakfast” to the phrase “turn a balanced breakfast into a tasty one.”
“We continue to stand by the quality and ingredients of Nutella hazelnut spread,” said Elise Titan, a spokeswoman for Ferrero USA Inc.
Still, the change was sweet vindication for Rude-Barbato, who said a blogger called her an idiot for joining the Nutella case.
“Moms are busy, and we don’t have time to stop and read every label,” she said. “There should be truth in advertising.”
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