Yogurt producer pays $21 million to states following investigation of product health claims.
Last December, The Dannon Company, Inc. settled charges made by the Federal Trade Commission (FTC) that the company had allegedly exaggerated some of the health benefits of its Activia yogurt and DanActive dairy drink. As part of the settlement, Dannon agreed to pay $21 million to 39 states whose attorneys general collaborated with the FTC on the investigation. Those states are receiving these funds now.
According to the FTC’s complaint, Dannon had claimed, without sufficient scientific support, that one serving of Activia per day relieves temporary irregularity and that DanActive can help protect consumers from the cold or flu.
The FTC claimed that eight of ten scientific studies conducted with Activia showed no statistically significant results on regularity.
According to the terms of the settlement, Dannon has agreed to stop claiming that its products reduce the chance of catching the flu or a cold unless the Food and Drug Administration (FDA) approves such a message. Normally, FDA approval of health claims about food products is not required under the FTC Act, but in this case FDA approval would provide a definitive avenue for Dannon to renew making its health claims. Dannon also agreed to stop advertising effects on regularity unless it can provide at least two more studies to support these claims.
In September, 2009, Dannon settled a separate class-action suit claiming that the company exaggerated its products’ health benefits. Dannon agreed at that time to set up a $35 million fund to reimburse buyers of Activia or DanActive.
In neither of Dannon’s settlements did the company admit any wrongdoing. On the contrary, Dannon claims that it never marketed its products misleadingly.