Sugar Information, Inc

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In THe Marrer oF SUGAR INFORMATION, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-23808. Complaint, Nov. 1, 1972—Decision, Nov. 1, 1972 Consent order requiring two sugar industry trade associations of New York City, among other things to cease making false and unsubstantiated weight — reduction claims for refined sugar and misrepresenting its nutritional value in weight-reduction dieting. Respondents are further required to run full-page corrective ads in various publications listed in the order. CoMPLaINnT Pursuant to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Sugar Information, Inc., Sugar Association, Inc., and Leo Burnett Company, Inc., corporations, hereinafter referred to as respondents, have violated the provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

_ Paracrapy 1. Respondents Sugar Information, Inc., and Sugar Association, Inc., are trade associations organized, existing and doing business as corporations under and by virtue of the laws of the State of New York, with their principal office and place of business located at 254 West 31st Street, New York, New York. Respondents Sugar Information, Inc., and Sugar Association, Inc., were organized and are maintained for the purpose of promoting, fostering and advancing the interests of their members who consist of firms engaged in busi- 712 FEDERAL. TRADE. COMMISSION: DECISIONS Complaint 81 FIC.

Tiessés | ‘relating to the'sugar industry; including” but: not t limited t to ‘growers, refiners, and processors.. - obi: Bil Par. 2. Respondent Leo Burnett Company, Tne; is a: a corporation ‘organized, existing: and doing business: under andby: ‘virtue of the laws ofthe State of Delaware, with its-office'and principal place of business Jocated at Prudential: Plaza, Chicago, Pllinois. < © : Par. 3. Respondents -Sugar: Association, Tne, and: Sugar Informa: tion, Inc., have been and now are engaged in a wide range of activities of mutual interest to their members including but not limited to the dissemination, publishing, and° distribution of advertisements and _ promotional material concerning the uses, purposes, utility, characteristics and effects ‘of sugar, which‘ comes: within the classification of “food,” as said term is. defined in the Federal Trade Commission Act. Par. 4. Respondent. Leo Burnett, Company, Inc., is now, and for some time last past has been, an advertising agency of Sugar Association, Inc.; and Sugar Information,:Inc., and: tow and for-some time last. past, has prepared and placed. for publication and has caused the dissemination of. _advertising.. material, including’ but not limited to.the advertising referred. to. herein, to promote the..sale: of sugar, and :products containing sugar, : which cone. within. the- classification of “food,” as said term | is defined: in the: Federal ‘Trade’ Commission Act.

Par. 5. In the course and conduct of their said. businesses, respondents have disseminated, and caused the dissemination of certain advertisements concerning sugar and products containing sugar by the United States mails and by various’ means in commerce, as “commerce” is defined in the Federal Trade Commission Act, including but not limited to, advertisements inserted in magazines and other advertising media, for the purpose.of inducing and which were likely to induce, directly or indirectly, the purchase of said products; and have disseminated, and caused the dissemination of, advertisements concerning said products by various means, including but not limited to the aforesaid media, for the purpose of inducing and which were likely to induce, directly or indirectly, the purchase of said products in commerce as “commerce” is defined in the BR ederal Trade Commission Act. ce Par. 6. Typical. of the statements and representations in. said advertisements, disseminated as aforesaid, but not all inclusive thereof, are the following: oe

FEDERAL: TRADE. COMMISSION Complaint DECISIONS a Lad ie} wa

720 FEDERAL.iTRADE COMMISSION -DECISIONS Complaint 81 FLC: | Par. 7. Through the use of said advertisements and others similar thereto not specifically set out herein, disseminated as aforesaid, respondents have represented and are now representing, directly and id by implication, that :

A. There-is a reasonable basis from which to conclude that. the consumption of sugar, and-foods. containing sugar, such as soft drinks, — ( es, or candy. bars,’before meals. contributes. significantly: and ‘relia ly. to. the reduction of human weight and to >. the maintenance of reduced human weight.

B. Consumption of sugar and foods containing sugar; such as: soft ; am cones; Or: -candy« bars,: ‘before . mes will: resuh in: reduced. daily. caloric intake.

C:.Sugar isa: amiquely suitable source of energy for persons attenipt- ‘ing to lose'weight or to prevent. weight gain, because it provides more ‘energy, per calorie than other foods: :

Pax. 8. In truth and in fact:

A. Respondents had no reasonable basis from. which to ‘conclude that ‘the: consumption of sugar, and foods containing sugar, such as soft, drinks, ‘icecream, ones, or. candy:; bars,. before. meals.. contributes, significantly and reliably to the reduction of human. weight and to the maintenance of reduced human weight..

B. Consumption of sugar and foods containing sugar such as soft drinks, ice cream cones, or candy bars, before meals may result in increased daily caloric intake.

C. Sugar is not a uniquely suitable source of energy, in terms of the quantity of energy provided per calorie, for persons attempting to lose weight or to prevent weight gain. All foods contain the same amount of energy per calorie, since calories are a measurement of the energy value of food.

Therefore, the advertisements referred to in Paragraph Six were and are misleading in material respects and constituted, and now constitute, “false advertisements” as that term is defined in the Federal Trade Commission Act, and the statements and representations set forth in Paragraphs Six and Seven were, and are, false, misleading and deceptive.

Par. 9. Respondents have represented, through the use of the aforesaid advertisements and otherwise, directly and by implication, that consumption of sugar and foods containing sugar before meals is an effective means of reducing human weight and maintaining reduced human weight. There existed at the time of said representations no reasonable basis. to support. said representations pertaining to the health and dietary qualities of said food products. SUGAR INFORMATION, INC., ET AL. 721 V1 Decision and Order _ Therefore, the aforesaid acts and practices were, and are, false, misleading, deceptive and unfair. .

Par. 10. In the course and conduct ‘of its aforesaid business, and at all times mentioned herein, respondents Sugar Association, Inc., and Sugar Information, Inc., as-agents or representatives of its membership constituency, have been, and now are, in substantial competition, in commerce, with corporations, firms and individuals representing. or _ engaged in the food industry.

Par. 11. In the course and. conduct of its aforesaid business, and at all times mentioned herein, respondent Leo Burnett Company, Inc., has been,.and now is, in substantial competition in- commerce with _ other advertising agencies.

. Par. 12. The use by respondents of the aforesaid false, misleading and deceptive statements, representations and practices and the dissemination. of the aforesaid: “false advertisements” has had, and now has, the capacity and tendency to mislead members of the consuming public into the erroneous and mistaken belief that: said statements and representations were and are true and into the purchase of substantial quantities of sugar and products containing sugar. Par. 18. The aforesaid acts and practices of respondents including the dissemination of “false advertisements,” as herein alleged, were and are all to the prejudice and injury of the public and of respondents’ competitors and constituted, and now constitute, unfair and deceptive acts and practices in commerce and unfair methods of competition in commerce in violation of Sections 5 and 12 of the Federal Trade Commission Act.

Decision And ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereto with violation of the Federal Trade Commission Act, and the respondents: ‘having been: served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint to-issue herein, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission’s rules; and 422 FEDERAL. TRADE .COMMISSION. ‘DECISIONS Decision: and Order 81 F.T.C.

‘The Commission having thereafter considered the matter and having ‘determined that it had reason to believe that the. respondents have violated the said Act, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed eonsent agreement and placed such agreement on the public.record for a period of thirty (30) days, and having duly considered the:comments filed thereafter. pursuant.to Section 2.34(b) of its rules,’ respondents then having submitted an agreement. modified ‘in light of said comments, now in further: conformity -with: the procedure . prescribed in Section 2.34(b) of its rules, the Commission hereby issues’ - its.complaint, makes: the following jurisdictional: findings, and. ehters the following order;.

1, Respondents Sugar Information, Inc., and Sugar Association, Inc., are. each: corporations organized, existing and. doing business under and: by virtue of the laws of the State of New York,:with:their offices:and: principal places of business located: at 254 West! 31st. Street, ' inthe city of New York, State of New York. - aaa fies ‘2. The Federal Trade Commission has: jurisdiction of the: subject matter of this proceeding: and ‘of the Tespondents, » and the » Proceeding is in ‘the public interest. ae , “ORDER © - I. It is ordered, That respondents Sugar Information, Inc.,. and Sugar Association, Inc., corporations, and their officers, agents, representatives and employees, only as officers, agents, representatives and employees of Sugar Information, Inc., and Sugar Association, Inc., directly or through any corporate or other device, in connection with the advertising, offering for sale, sale or distribution of refined sugar and products containing refined sugar forthwith cease and desist from: 1. Disseminating, or causing the dissemination of, any advertisement by means of the United States mails or by any means in commerce, as “commerce” is defined in the Federal ‘Trade Commission Act, which represents, directly or by implication, that: (a) Refined. sugar makes any contribution to. weight ‘reduction or to the prevention of weight gain, unless there exists a reasonable basis from which respondents could draw such a conclusion.

(b) Refined sugar supplies food energy uniquely suitable _ for persons attempting to lose weight or prevent weight gain. (c) For purposes of weight reduction or the prevention of weight gain, food energy supplied by refined sugar acts other . than as a body fuel.

SUGAR: INFORMATION, ‘INC., ET AL: 723 TW. Decision and Order 2. 'Disseminating, or. causing the dissemination of, any adver- ' tisement concerning dieting undertaken for the purposes of weight reduction or the prevention of weight gain’ by means of the United States mails or by any means in commerceé as “commerce” is defined in the Federal Trade Commission Act, ‘which * misrepre- ‘sents in any manner the nutritional value of refined sugar. dt is provided, ‘however, That-nothing contained in this order shall be construed'as prohibiting accurate representations of refined sugar’s role in and contribution to a balanced diet undertaken for the purpose _ ‘of weight reduction or for the prevention of weight gain, where: supported by cothpetent scientific or médical authority; or as prohibiting accurate’ representation of any non-nutritional characteristic of refined ‘sugar. so A ‘statement: ‘as to the qualities or: attributes of refined sugar’ can amount to an ‘implied: ‘uniqueness claim if it is made in a context which conveys an impression of utiiqueness for refined sugar. ‘However, statements as to the qualities’ or ‘attributes of refined 's sugar covered by this — ‘order ‘will’ not’ constitute''a; Violation: thereof for’ the: sole: ‘reason ‘that such: ‘statements ould: Iso: bé tnade swith respect: to other ‘products: 3, /Disseniitiating, ér° ‘causing the dissernination’ of any‘ adver: tisement by means of the United: States’ mails’or by any means for the purpose of inducing or which is likely to induce, directly or indir rectly, the purchase of refined sugar in commerce, as “commerce” is defined in the Federal Trade Commission Act, which contains any of the representations, acts or practices prohibited in subparagraph 1 or the misrepresentation prohibited in subparagr aph.2 above,. .

IL. It is further ordered and agreed, That respondents Sugar Information, Inec., and Sugar Association, Inc., cause dissemination of a full-page printed: messagé in the: following publications and issues thereof:

.. McCall’s December 1972: :..

‘1 . 2. Saturday: Review: December 1972 =.

3. National Geographic. February 1973 ° 4, Time February 1973 5. Vogue February 1973 © 6. Parents April 1973 os . Reader’s Digest (B)' April 1973 :

The aforesaid message shall: contain a clear and conspicuous disclosure as follows: eee Do’ you recall the messages we brought you in the past about sugar? How something with; sugar in it before heals could help you: curb your appetite?5 1 6 1 2 15 1808 2633 2 2 12.849503 : 724 FEDERAL’ TRADE ._ COMMISSION. DECISIONS Decision and -Order 81 EF-.T.C.

We hope. you didn’t get the idea that: our little diet tip was any magic formula for losing weight. Because there are no tricks, or shortcuts, the whole diet subject is very complicated. Research hasn’t established that consuming sugar before meals will contribute to weight reduction or even keep you from gaining weight. Lt is provided, however, That in the event the effective date of this order occurs after the final date on which an advertisement may be submitted for placement in any of the specified publications and issues thereof, the aforesaid message may be placed in a subsequent i issue of the same magazine(s).. ;

It is. further ordered, That. respondents shall forthwith distribute a.copy of this order to each of their operating divisions. . It is further ordered, That, respondents notify the Commission at least thirty (80) days prior to any proposed change in the corporate respondents such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation. or dissolution of subsidiaries or any. other change i in the corporations which may affect compliance obligations arising out of the order. It is further ordered, That respondents shall, within sixty (60) days after service of this order upon them, each file with the Commission a report, In writing, setting forth in detail the manner and form. of their compliance with this order.