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Archive for the ‘Food/Beverage Marketing’ Category
General Mills Uses Whole Grain Claims to Distract from Sugar Content
Wednesday, December 14th, 2011
By Cara Wilking, Staff Attorney
Like a good mother, General Mills loves all of her “Big G” cereals the same. Consumers, however, should not. The company has chosen to market all of its Big G cereals as containing “More Whole Grain Than Any Other Ingredient*” (the asterisk takes you to the disclaimer “*as compared to any other single ingredient”). The side panel states “That’s why it’s first on the ingredient list” and tells consumers the USDA suggests looking for foods that list whole grains first. A recent report by the Environmental Working Group found that parents should be especially aware of sugar content when buying breakfast cereals for children.
Federally mandated weight-based cereal serving sizes, and the industry sponsored front-of-package Nutrition Keys labeling scheme has meant that when consumers compare calories most cereals look just about the same. The Big G cereals Wheaties, Kix, Lucky Charms, Cookie Crisp, and Cinnamon Burst Cheerios all have 100 or 110 calories per serving. But sugar content and serving size by volume varies widely. For example, Kix and Cinnamon Burst Cheerios both list 110 calories per serving, but Kix has just 3 grams of sugar per 1 ¼ cup serving while the pre-sweetened Cheerios product has 9 grams of sugar per 1 cup.
General Mills’ use of a uniform campaign for its Big G cereals is designed to make its entire portfolio of products look healthy by distracting attention from sugar content. Its website even features a page about sugar comparing plain Cheerios (1 gram of sugar per serving) to Trix (10 grams of sugar per serving ) that asks: “From a calorie and nutrient standpoint, are both products a good breakfast choice?” The answer: “Yes, they are. In fact, all General Mills cereals are lower calorie, nutrient dense choices.”
Perhaps this campaign is a sign that its sugary cereals are losing market share? If it is, General Mills should put its resources into developing breakfast products that are actually healthy for children instead of trying to prop up sugary cereal sales with claims about whole grain content.
New Big G Cereal Boxes
Big G Cereal Box Side Panel
Lucky Charms Box
The Cost of McDonald’s Happy Meal Toys
Thursday, December 8th, 2011
By Cara Wilking, Staff Attorney
The passage of San Francisco’s Healthy Food Incentives Ordinance and McDonald’s recent decision to “comply” with the law by charging 10 cents in order to be able to include toys with meals that do not meet minimal nutritional criteria has engendered a lot of public debate. The following table summarizes information from a 2005 Massachusetts Appellate Tax Board decision with Happy Meal cost information from the period between 1999 and 2001:
Toy, Food, Condiment & Paper Costs to McDonald’s Restaraunts of Massachusetts (1999-2001) in US Dollars
|
|
Hamburger Happy Meal |
Cheese-burger Happy Meal |
4-piece McNugget Happy Meal |
Happy Meal Toy Only |
| Toy cost |
0.43 |
0.4299 |
0.4299 |
0.43 |
| Food cost |
0.3104 |
0.3561 |
0.4147 |
|
| Condiment cost |
0.0162 |
0.0162 |
0.0476 (average) |
|
| Paper cost |
0.0434 |
0.0340 |
0.049 |
|
| Total cost |
0.8000 |
0.8362 |
0.9412 |
|
| Menu Price |
1.99 |
2.39 |
2.69 |
1.69 |
For the periods covered, McDonald’s reported that it paid its toy supplier 43 cents per toy. The total cost to McDonald’s for the toy and packaging of the Happy Meals was greater than the cost of food for each Happy Meal type. McDonald’s included a toy with every Happy Meal and sold the toys separately for a retail price of $1.69. The company noted that it had a dedicated key on its registers in order to process separate toy sales.
In an issue advertisement run by McDonald’s explaining its 10 cent Happy Meal toy plan, the company wrote: “we feel a responsibility to our customers – including parents…who would like to have the option of purchasing…[a toy] separately for their kids.” In reality, prior to the ordinance all customers, including parents, had the option to purchase a toy separate from a Happy Meal. To comply with the letter and the spirit of San Francisco’s ordinance, McDonald’s could have stopped putting toys in with Happy Meals that did not meet nutritional criteria. Customers wanting to buy a toy separately, including parents, would then be treated as they always have been—rung up using the dedicated register key and charged the retail price of the toy.
The good news is that, as Michele Simon points out, there is an easy legal fix to the 10 cent toy strategy. In the short term, McDonald’s response amounts to an incredible missed opportunity to break away from a business model whereby the inedible portion of its children’s meals cost more to produce than the edible portion. The cost spent on toys could be spent to improve the nutritional profile of its children’s menu. The result could have been less trash in the form of discarded toys, a boon to fruit and vegetable producers all over the United States who supply McDonald’s, and, most importantly, healthier kids.
FOR MORE INFORMATION ABOUT PESTER POWER MARKETING STRATEGIES PLEASE SEE OUR PESTER POWER ISSUE BRIEF.
PHAI Releases New Resources to Use Law to Fight Junk Food Marketing to Kids
Wednesday, September 21st, 2011
Food and beverage marketing targeting children is a major focus of the food and beverage industry because, as the Institute of Medicine’s report on the subject bluntly declared, “marketing works.”
Deceptive and unfair marketing to promote high-calorie low-nutrient foods and beverages affect parent-consumer food purchasing decisions and induce demand among children for products that contribute to obesity and overweight. Such marketing campaigns can run afoul of an array of legal authorities that provide consumer protection from such practices.
PHAI conducted extensive 50-state research examining the provisions of state consumer protection laws of the United States that prohibit unfair, deceptive or unconscionable sales and marketing campaigns. Depending on the state, these consumer protection laws may be used by stakeholders in child health, including parents, as well as state attorneys general to stop unfair or deceptive marketing and advertising of unhealthy food and beverage products linked to overweight and obesity in children and adolescents.
The research focuses on the legal limits of: (1) direct marketing to children and teens in an effort to get them to use their own spending money to purchase food products for themselves; and (2) “pester power” marketing that targets children in an effort to get them to persuade their parents into buying products for them. To make it easy to find and compare state consumer protection laws, we have created an interactive map linking to consumer protection law profiles of every state and the District of Columbia.
Key findings of our state consumer protection research also are summarized in a report and a legal issue brief:
- Major Findings from 50-State Survey of State Consumer Protection Law to Limit Junk Food Marketing to Children by Cara Wilking, JD and Mark Gottlieb, JD summarizes and contextualizes our research (pdf).
- Reining in Pester Power Food and Beverage Marketing by Cara Wilking, JD applies our research to food marketers who appeal to kids’ ability to nag adults to purchase unhealthy foods (pdf).
A clear understanding of consumer protection rights and the sources of their legal authority will provide guidance for policymakers and advocates for children’s health who seek to curb these practices without the need for new legislation and regulatory measures.
Click to vist our interactve consumer protection map
This research was supported by the Robert Wood Johnson Foundation’s Healthy Eating Research Program (#66968).
Coca-Cola Unscathed by Happy Meal Changes?
Wednesday, July 27th, 2011
1.3 ounces of french fries are out. Caramel dipping sauce is out. A few apple slices are in. Sugary drinks, however, appear to be fully in the mix if not more so now. The 12 oz. “child’s size” Happy Meal soft drink, ranging from 110-120 calories for the non-diet carbonated options, remains the same. The new chocolate milk option has 170 calories and 25 grams of sugar. To put that into perspective, the container of caramel dipping sauce that will no longer be offered has 70 calories and 9 grams of sugar. As the fountain syrup supplier for McDonald’s, The Coca-Cola Company must be rather pleased that McDonald’s made no overt change to its default drink option for its “most popular” Happy Meal combinations–soda. Chocolate milk may compete with soda, but for parents concerned about calories McDonald’s has managed to position its Coca-Cola brand Happy Meal soda offerings as lower calorie alternatives to the flavored milk. Makes one wonder whether The Coca-Cola Company is whistling “badda ba, ba ba, I’m lovin’ it” in response to McDonald’s Happy Meal menu changes.
McDonald’s Happy Meals with Soda & Fries Still the “Most Popular” Meal Combinations
Tuesday, July 19th, 2011
by Cara Wilking, J.D.
The National Restaurant Association announced last week that a number of chain restaurants will be offering healthier children’s meal menu options. McDonald’s has opted not to participate in the initiative. Likely it will point to the fact that it already offers apple slices and milk and that it only advertises the healthier versions of its Happy Meals. These steps, however, do not appear to have translated into making its healthier Happy Meal combinations its most popular Happy Meal combinations.
In a letter dated June 7, 2011, McDonald’s touted its range of children’s menu options and included fact sheets providing nutritional information for its children’s meals. The fact sheets feature six Happy Meal combinations and state that the meal combinations pictured “represent two advertised meals, three most popular meals and Cheeseburger, Apple Dippers and low-fat milk meal.” According to McDonald’s Children’s Food and Beverage Advertising Initiative advertising pledge its “advertised meals” are the 4-piece Chicken McNuggets Happy Meal with apple dippers, low fat caramel dip and a jug of 1% low fat white milk and the Hamburger Happy Meal with apple dippers, low fat caramel dip and a jug of 1% low fat white milk. By process of elimination, the three “most popular” meal combinations emerge as:
- McDonald’s Chicken McNugget Happy Meal with small french fries and a 12 oz. soft drink,
- McDonald’s Hamburger Happy Meal with small french fries and a 12 oz. soft drink, and
- McDonald’s Cheeseburger Happy Meal with small french fries and a 12 oz. soft drink.*
The three most popular combinations include french fries and soda despite the fact that McDonald’s only advertises combinations with apple slices and milk. This is most likely because these less healthy options remain the default when filling Happy Meal orders. If McDonald’s is serious about child health it should take real measures to ensure that its healthiest Happy Meal options become its most popular options.
*McDonald’s was contacted last week to confirm this interpretation of its fact sheets and has yet to do so.
Organizations that Care About Health Should Play No Part in the Soft Drink Industry’s Effort to Rehabilitate Its Public Image
Monday, June 20th, 2011
by Cara Wilking, J.D.
CLICK HERE DOWNLOAD THIS POST AS A PDF
INTRODUCTION
The United States has the highest per capita rate of carbonated soft drink consumption in the world at 736 eight-ounce servings or 46 gallons per person in 2009.[1] The soft drink industry is dominated by three major companies: The Coca-Cola Company (“Coke”), PepsiCo. (“Pepsi”), and Dr. Pepper Snapple (“DPS”). Soft drink companies produce concentrate and fountain syrup, and are responsible for marketing existing products and developing new products. Bottlers mix concentrate from soft drink companies and mix it with sweeteners and water to produce bottled and canned beverages. The American Beverage Association (“ABA”) is the industry association representing the non-alcoholic beverage industry. While the United States still has the highest per capita consumption of carbonated soft drinks in the world, overall sales of full-sugar carbonated soft drinks have been declining in recent years. In response to this decline in sales, the soft drink industry has reinvigorated its efforts to engage the public via corporate social responsibility tactics designed to rehabilitate the image of its products.
SOFT DRINK INDUSTRY CORPORATE SOCIAL RESPONSIBILITY
As large corporations, Coke, Pepsi and DPS, all undertake corporate social responsibility (CSR) campaigns. Corporate social responsibility generally encompasses a company’s activities and value statements with respect to philanthropy, community, workplace diversity, safety, human rights, and environment. There are various reasons why companies pursue CSR including: organizational values, reaction to threats to transaction costs, brand and competitive positioning, marketing, publicity, and innovation.[2] Concerns generally motivating the soft drink industry’s CSR efforts are evident in The Coca-Cola Company’s 2009 Annual Report:
Consumers, public health officials and government officials are becoming increasingly concerned about the public health consequences associated with obesity, particularly among young people. In addition, some researchers, health advocates and dietary guidelines are encouraging consumers to reduce consumption of sugar-sweetened beverages, including those sweetened with HFCS or other nutritive sweeteners. Increasing public concern about these issues; possible new taxes and governmental regulations concerning the marketing, labeling or availability of our beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sugar-sweetened beverages may reduce demand for our beverages, which could affect our profitability.
When faced with such public concern, CSR efforts aim at “legitimizing a corporation’s activities and increasing corporate acceptance.”[3] Philanthropy and cause-marketing campaigns are key parts of the soft drink industry’s CSR efforts.
Soft Drink Industry Philanthropy
Coke and Pepsi both have corporate foundations that make grants to non-profit organizations and institutions. In 2008, the Coca-Cola Foundation Inc. made over $36 million in grants to organizations worldwide.[4] In 2009, the PepsiCo. Foundation, Inc. made $27.9 million in domestic grants.[5] In order to receive a grant, applicants must engage in work that meets the stated goals of the foundation, make an application and, once funded, follow the grant guidelines. The Coca-Cola Foundation and the PepsiCo. Foundation are required to publicly disclose grant recipients and total assets and expenditures to the Internal Revenue Service in order to maintain tax-exempt status.
Soft Drink Industry Cause-Marketing Campaigns
The use of cause-marketing campaigns is a growing trend facilitated by the rise of social networking online. Also referred to as “cause-related marketing,” cause-marketing traditionally has been defined as “a mutually beneficial collaboration between a corporation and a nonprofit in which their respective assets are combined to: create shareholder and social value; connect with a range of constituents (be they consumers, employees, or suppliers); and communicate the shared values of both organizations.”[6] Cause-marketing is distinct from corporate philanthropy because the corporate funds distributed “are not outright gifts to a nonprofit organization, so they are not treated as tax-deductible charitable contributions.”[7]
The Pepsi Refresh Project is an example of a cause-marketing campaign. Pepsi-Refresh is a program whereby members of the public submit ideas with a funding request and vote on whether or not to fund the concept. In 2010, PepsiCo pledged $20 million in funds for the Refresh campaign. This amount is distinct from its corporate foundation giving made through the PepsiCo Foundation and, as a marketing expenditure, is not subject to the same public disclosures required of private foundations. The underlying goal of the Pepsi Refresh cause marketing campaign is to sell more Pepsi products. When asked if Pepsi Refresh has been successful, Melisa Tezanos, Communications Director of PepsiCo Americas Beverages, replied:
Pepsi Refresh has been an overwhelming success. With over 2.8 billion (with a “B”!) earned media impressions, the project exceeded our internal benchmarks early in the year and we’ve seen an improvement in key brand health metrics. In fact, when Millennials, an important cohort group for Pepsi, know about the Refresh Project their purchase intent goes up.[8]
Ms. Tezanos clearly defines “success” not in terms of work done in the community funded by the program, but rather in terms of increasing the profile of Pepsi products and increasing sales amongst a key demographic. Social media is an important tool in cause-marketing campaigns as it facilitates the sharing of campaign materials that are embedded with product advertising and enables individuals to recruit other individuals to the campaign with relatively little effort.
ENSURING THE INTEGRITY OF YOUR ORGANIZATION’S HEALTH PROMOTION EFFORTS
The practical reality is that soft drinks are now for sale in almost every venue, e.g. hospitals, universities, youth centers, and public buildings via vending machines and on-site retail establishments. In addition, corporate philanthropy by the soft drink industry and other private companies provides funding to a number of institutions and organizations that also have an interest in health promotion. While organizations should re-examine traditional arms-length business relationships and donor/recipient relationships, emerging soft drink industry corporate social responsibility efforts that use cause-marketing and public relations tactics require special attention. As part of a deliberate CSR strategy, these campaigns are embedded with product advertising, and often require participants to enlist other participants via social networking online. In addition, cause-marketing seeks to build an association between a company’s products and a trusted non-profit organization in order to build market share. Organizations that care about health should establish a policy that identifies and distinguishes between traditional business relationships, corporate philanthropy and cause-marketing and should commit to not participate in cause-marketing campaigns that promote products, such as sugary drinks, that pose a public health threat.
[1] Beverage Digest, Special Issues: Top-10 CSD Results for 2009 (March 24, 2010), http://www.beverage-digest.com/pdf/top-10_2010.pdf.
[2] Michael J. Maloni & Michael E. Brown, Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry, 68 J. Bus. Ethics 35, 36 (2006).
[3] Guido Palazzo & Ulf Richter, CSR Business as Usual? The Case of the Tobacco Industry, 61 J. Bus. Ethics 387, 390 (2005).
[4] The Coca-Cola Foundation, Inc., 2008 Form 990-PF.
[5] PepsiCo. Foundation, Inc. 2009 Form 990-PF.
[8] Christie Garton, Pepsi exec dishes on Pepsi Refresh, future plans for cause marketing, USA Today (Nov. 5, 2010).
State Laws Prevent Local Control Over Much More Than Just Happy Meal Toys
Wednesday, May 18th, 2011
Prepared by Cara Wilking, J.D., Staff Attorney
Santa Clara County, CA and the City and County of San Francisco, CA enacted ordinances requiring restaurants to meet nutrition criteria for children’s meals that use incentive items such as toys to drive child consumer demand. Neither law bans the use of toys or other incentive items, and both laws are designed to protect children from being baited into requesting unhealthy meals. The Governor of Arizona recently signed into law a provision barring local governments from putting any limits on the use of “consumer incentive items” in “retail food establishment marketing.” Florida currently has an even broader law on the Governor’s desk that would prevent local control over “all matters related to the nutritional content and marketing of foods offered” at public food and lodging establishments. As chronicled by the LA Times, both of these laws were carefully orchestrated by the restaurant industry in response to so-called “toy bans.” In point of fact, both laws go far beyond Happy Meal toys.
In addition to protecting vulnerable child consumers, local governments regulate business conduct under their police power and zoning authority for a number of reasons including aesthetics, public health and public safety. Arizona’s consumer incentives law essentially exempts food retailers from any local regulation that may have an impact on their business activities related to consumer incentives. “Consumer incentives” are broadly defined to include: “any licensed media character, toy, game, trading card, contest, point accumulation, club membership, admission ticket, token, code or password for digital access, coupon, voucher, incentive, crayons, coloring placements or other premium prize or consumer product” associated with a meal served by or acquired from a restaurant, food establishment or convenience store. The legislation pending in Florida strips local control over “all matters related to the nutritional content and marketing of foods offered” at public food and lodging establishments.
Many communities maintain the character of their communities through local aesthetic-related zoning laws. Imagine a small city with a historic downtown preserved by local zoning ordinances to protect the aesthetic character of the city. The community becomes concerned when a quick service restaurant starts putting large signs in its windows marketing a combo meal with a wrapper that one can scan with one’s phone to get points towards a future purchase. A local authority goes out to talk to the franchise owner and ask him to remove the signs as they are not in keeping with the local zoning ordinance. The restaurant owner refuses to remove the signs. Under the legislation enacted in Arizona and pending in Florida, the city would be powerless to challenge the practice.
The as yet to be enacted Florida law, is so broad that it would prevent local governments from requiring additional nutritional disclosures to consumers about the calorie or sodium content of restaurant menu items. In addition, some states delegate consumer protection authority to city and county attorneys. Such authority was used by a city attorney to make the first formal challenge to misleading “Immunity” claims on children’s cereal marketed at the height of the swine flu outbreak. The pending Florida law arguably would even exempt any food marketing by a restaurant or public lodging from local city or county attorney enforcement of deceptive and unfair business practices laws.
A recent story by Reuters run in a number of news outlets analogized the current legislation to “cheeseburger” or “commonsense consumption” bills, also sponsored by the restaurant industry. Cheeseburger bills are on the books in over 20 states and bar personal injury claims against food makers and restaurants for injuries related to long term over-consumption of food. Many state cheeseburger bills, however, do not immunize food sellers from liability when they knowingly violate laws pertaining to marketing, distributing, advertising, labeling or sale of the goods such as state consumer protection statutes prohibiting deceptive, unfair or unconscionable trade practices. The very purpose of local ordinances tying child incentive items to nutritional quality is to protect children from the fundamentally unfair and deceptive use of toys to generate child requests for unhealthy foods. The Arizona and Florida laws contain no such exemption to allow local intervention to protect vulnerable consumers from deceptive and unfair food marketing.
The law in Arizona and the pending legislation in Florida, strip local governments not only of the ability to protect children from harmful business conduct, their expansive nature jeopardizes local control over many other important business conduct issues. These laws fundamentally change the rules of the game that local governments have depended on to maintain community character and to protect their communities.
Journal of Public Health Policy issues Call for Papers on changing food industry behavior
Thursday, April 28th, 2011
The Journal of Public Health Policy’s Co-Editor, Anthony Robbins and Editorial Board Member and Paulette Goddard Professor of Nutrition at NYU, Marion Nestle, have recently issued a Call for Papers for the Journal in an editorial entitled: Obesity as collateral damage: A call for papers on the Obesity Epidemic.
We at PHAI encourage colleagues in the field of public health law to respond to this Call. The editorial concludes with this thought-provoking question: “Does the industry need to overfeed the population to remain profitable?”
Arkansas State Consumer Protection Profile
Tuesday, March 1st, 2011
Download the Arkansas State Consumer Protection Profile (pdf)
Which state consumer protection provisions could be used to protect consumers from junk food marketing?
The Arkansas Deceptive Trade Practices Act (“ADTPA”) generally prohibits unconscionable, false and deceptive trade practices. Ark. Code §§ 4-88-107. It is unlawful to “[k]nowingly making a false representation as to the characteristics, ingredients, uses, benefits, alterations, source, sponsorship, approval, or certification of goods . . . .” Ark. Code §§ 4-88-107(1). With respect to the sale or advertisement of any good, the ADTPA outlaws: “(1) The act, use, or employment by any person of any deception, fraud, or false pretense; or (2) [t]he concealment, suppression, or omission of any material fact with intent that others rely upon the concealment, suppression, or omission.” Ark. Code §§ 4-88-108.
The ADTPA also makes it illegal to “[k]nowingly tak[e] advantage of a consumer who is reasonably unable to protect his or her interest because of (A) [p]hysical infirmity, (B) [i]gnorance, (C) [i]lliteracy, (D)
[i]nability to understand the language of the agreement, or (E) [a] similar factor.” Ark. Code § 4-88-107(8).
Does Arkansas law provide any special protections for child consumers?
The ADTPA’s provision outlawing knowingly taking advantage of consumers who are reasonably unable to protect their own interests is a potentially powerful protection for child consumers. Children, by virtue of their age may be ignorant of the distinction between advertising and non-commercial content, they may be fully or partially illiterate, and unable to understand disclaimers and terms of contests and promotions. In addition, food marketing targeted at children typically is blatantly aimed at a certain age group making it easier for a plaintiff to establish that the defendant “knowingly” sought to take advantage of that group.
Who can bring a lawsuit?
The Attorney General, private consumers and classes of private consumers can file suit.
What needs to be shown to make out a claim?
A plaintiff must show (1) a false, unconscionable, or deceptive act, (2) actual damages and (3) the act was the proximate cause of the injury alleged. Ark. Code § 4-88-113(f); Ashley County, Ark. v. Pfizer, Inc., 552 F.3d 659, 666 (Ark. 2009). A showing of intent to deceive is only required in limited cases. There is no definitive ruling under Arkansas law as whether reliance is a required element.
What are the powers of the Attorney General to protect kids from junk food marketing?
The Arkansas Attorney General may seek injunctive relief, Ark. Code § 4-88-104, investigate, Ark. Code §§ 4-88-105, 4-88-111, seek restitution for affected consumers, Ark. Code §§ 4-88-113, and petition a court for civil penalties of up to $10,000 per violation, Ark. Code §§ 4-88-113.
How does the law compensate consumers?
A plaintiff may recover actual damages. Ark. Code § 4-88-113(f).
Who is liable for attorney’s fees?
A successful private plaintiff may recover attorney’s fees. Ark. Code § 4-88-113(f).
DISLCAIMER: This legal summary is for informational purposes only. Please consult an attorney for legal advice. All information reflects legal research conducted in 2010.
Supported by the Robert Wood Johnson Foundation’s Healthy Eating Research Program (#66968).
Arizona State Consumer Protection Profile
Tuesday, March 1st, 2011
Download the Arizona State Consumer Protection Profile (pdf).
Which state consumer protection provisions could be used to protect consumers from junk food marketing?
Arizona’s Consumer Fraud Act (“CFA”) prohibits “[t]he act, use or employment by any person of any deception, deceptive act or practice, fraud, false pretense, false promise, misrepresentation, or concealment, suppression or omission of any material fact . . . in connection with the sale or advertisement of any merchandise . . . .” Ariz. Rev. Stat. § 44-1522. Under Arizona law, advertisement “includes the attempt by publication, dissemination, solicitation or circulation, oral or written, to induce directly or indirectly any person to enter into any obligation or acquire any title or interest in any merchandise.” Ariz. Rev. Stat. § 44-1521.
Does Arizona law provide any special protections for child consumers?
The CFA has no specific provision protecting children as vulnerable consumers. The CFA’s definition of “advertisement” does include indirect and direct attempts to induce consumers to buy products. Ariz. Rev. Stat. § 44-1521. Advertising aimed at children intended to generate “pester power” whereby children pester their parents into buying a product for them is a classic form of “indirect” food marketing. The inclusion of indirect marketing practices in the definition of “advertisement” may prove beneficial to consumers in cases where deceptive advertising is aimed at children but the parent is the ultimate purchaser.
Who can bring a lawsuit?
The Attorney General, private consumers and classes of private consumers can file suit under the CFA.
What needs to be shown to make out a claim?
A plaintiff must show that the defendant committed a deceptive or fraudulent act in connection with the sale of merchandise and that he or she was injured (suffered damages) as a result. Howell v. Midway Holdings, Inc., 362 F.Supp.2d 1158, 1164 (D. Ariz. 2005) (citing Dunlap v. Jimmy GMC of Tucson, Inc., 136 Ariz. 338, 342 (Ariz. App. 1983)). The CFA requires a showing that the defendant acted with intent when the misconduct alleged involves concealment, suppression or omission of a material fact. Ariz. Rev. Stat. § 44-1522. For private actions, the Arizona courts have interpreted the CFA to require a basic showing of reliance on the deception by the consumer. See, Peery v. Hansen, 585 P.2d 574, 577 (Ariz. App. 1978), and Siemer v. Associates First Capital Corp., 2001 WL 35948712 (D. Ariz. 2001). Arizona courts have held, however, that a private plaintiff’s reliance need not be reasonable: “An injury occurs when a consumer relies, even unreasonably, on false or misrepresented information.” Kuehn v. Stanley, 91 P.3d 346, 351 (Ariz. App. Div., 2004). See also, Stratton v. American Medical Sec., Inc., 266 F.R.D. 340, 348 (D.Ariz., 2009).
What are the powers of the Attorney General to protect kids from junk food marketing?
The Arizona Attorney General has the power to investigate, Ariz. Rev. Stat. § 44-1524, issue subpoenas, Ariz. Rev. Stat. § 44-1526, conduct hearings, Ariz. Rev. Stat. § 44-1526, promulgate procedural rules, Ariz. Rev. Stat. § 44-1526, and seek injunctive relief and restitution for consumers, Ariz. Rev. Stat. § 44-1528, and petition the court for up to $10,000 in civil penalties for willful violations of the CFA, Ariz. Rev. Stat. 44-1531(A). The Attorney General may seek restitution for affected consumers. Ariz. Rev. Stat. § 44-1528(A)(2).
How does the law compensate private plaintiffs?
Private individuals are entitled to actual damages. Dunlap v. Jimmy GMC of Tucson, Inc., 136 Ariz. 338, 342 (Ariz. App. 1983). In rare cases, a court may award punitive damages if the wrongdoer’s conduct “is wanton or reckless, shows spite or ill will or where the conduct demonstrates a reckless indifference to the interests of others.” Dunlap v. Jimmy GMC of Tucson, Inc., 136 Ariz. 338, 343 (Ariz. App. 1983).
Who is liable for attorney’s fees?
The Attorney General is entitled to attorney’s fees for prevailing in an action brought under the CFA. Ariz. Rev. Stat. § 44-1534. Consumers are not entitled to attorney’s fees for actions under Arizona’s CFA. Sellinger v. Freeway Mobile Home Sales, Inc., 521 P.2d 1119, 1123 (Ariz. 1974).
DISLCAIMER: This legal summary is for informational purposes only. Please consult an attorney for legal advice. All information reflects legal research conducted in 2010.
Supported by the Robert Wood Johnson Foundation’s Healthy Eating Research Program (#66968).
