Pacific Rice Products, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF PACIFIC RICE PRODUCTS, INC.

CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SECS. 5 AND 12 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3395. Complaint, Aug. 17, 1992--Decision, Aug. 17, 1992 This consent order prohibits, among other things, a California company from misrepresenting the contents, validity, results, conclusions or interpretations of any test or study; and from representing that any food produces any health benefit, unless the respondent possesses and relies upon competent and reliable scientific evidence to substantiate the representation. Appearances For the Commission: Philip L. Broyles, Michael Milgrom and Mark D. Kindt.

For the respondent: Peter Goodman, Brobeck, Phleger & Harrison, San Francisco, CA.

COMPLAINT The Federal Trade Commission, having reason to believe that Pacific Rice Products, Inc., a corporation ("respondent"), has violated the provisions of the Federal Trade Commission Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges:

PARAGRAPH 1. Respondent is a California corporation, with its office or principal place of business located at 1275 Santa Anita Court, Post Office Box 2060, Woodland, California. PAR. 2. Respondent has advertised, offered for sale, sold or distributed food products, including Vita Fiber Rice Bran. PAR. 3. The acts and practices of respondent alleged in this complaint have been in or affecting commerce. Complaint 11S F.T.C.

PAR. 4. Respondent disseminated or caused to be disseminated an advertisement and point-of-purchase materials for Vita Fiber Rice Bran, a food within the meaning of Section 12 of the Federal Trade Commission Act, 15 U.S.C. 52. This advertisement and point-ofpurchase materials were disseminated by various means in or affecting commerce, including newspapers distributed across state lines, for the purpose of inducing the purchase of such foods by members of the public.

PAR. 5. Typical of respondent's advertisements, but not necessarily all-inclusive thereof, are the advertisements attached hereto as Exhibits A, B, C and D. The aforesaid advertisements and others contain the following statements:

(A) REDUCE CHOLESTEROL (Exhibit A.) (B) THE KEY TO A HEALTHY HEART™ (Exhibit A.) (C) Can help reduce cholesterol as a dietary supplement. (Exhibit B.) (D) Lowers LDL. (bad cholesterol) (Exhibit B.) (E) Improves HDL/LDL ratio which is the best measure of heart attack risk. (Exhibit B.) (F) CAN HELP REDUCE CHOLESTEROL AND LESSEN THE RISK OF HEART DISEASE (Exhibit B.) (G) FIGHTS CHOLESTEROL (Exhibit B.) (H) Clinical studies show that VITA FIBER Rice Bran Special Fiber Formulation can help reduce blood cholesterol levels. (Exhibit C.) (I) U.S.D.A. tests show medium grain rice bran is best for binding bile acids which has a strong correlation with the ability to reduce cholesterol. (Exhibit C.) (J) Ounce for ounce, Vita Fiber Rice Bran has nearly twice the total dietary fiber as oat bran. (Exhibit D.) (K) Helps reduce the risk of heart disease. (Exhibit B.) PAR. 6. Through the use of the statements referred to in paragraph five (H) and (I), above, and others in advertisements and promotional materials not specifically set forth herein, respondent has represented, directly or by implication, that tests and clinical studies have proven that Vita Fiber Rice Bran will help reduce the serum cholesterol levels of consumers who add it to their diets. PAR. 7. In truth and in fact, tests and clinical studies have not proven that Vita Fiber Rice Bran will help reduce the serum cholesterol levels of consumers who add it to their diets. Therefore, PACIFIC RICE PRODUCTS, INC. 765 763 Complaint the representation set forth in paragraph six was and is false and misleading.

PAR. 8. Through the use of the statements referred to in paragraph five, above, and others in advertisements and promotional materials not specifically set forth herein, respondent has represented, directly or by implication, that:

(A) Consumption of Vita Fiber Rice Bran lowers cholesterol; (B) Consumption of Vita Fiber Rice Bran will help reduce the consumer's risk of heart disease; and (C) Consumers who add Vita Fiber Rice Bran to their diets will improve the ratio of HDL-to-LDL cholesterol in their blood. PAR. 9. Through the use of the statements set forth in paragraph five and others not specifically set forth herein, respondent has represented, directly or by implication, that at the time it made the representations set forth in paragraph eight, respondent possessed and relied upon a reasonable basis for such representations. PAR. 10. In truth and in fact, at the time respondent made the representations set forth in paragraph eight, it did not possess and rely upon a reasonable basis for making such representations. Therefore, respondent's representation as set forth in paragraph nine was and is false and misleading.

PAR. 11. Respondent's dissemination of the aforesaid false and misleading representations as alleged in this complaint constitutes unfair and deceptive acts or practices in or affecting commerce and the dissemination of false advertisements in violation of Sections 5(a) and 12 of the Federal Trade Commission Act. Complaint 115 F.T.c.

EXHIBIT A Lilkdigeu vers REDUCE CHOLESTEROL VITA FIBER"

RICE BRAN THE KEY TOA HEALTHY HEART ™ RECOMMENDED. ROBERT E. KOWALSKI, THE 8 WEEK CHOLESTEROL CURE * Cen help reduce cnclestezol when partot a low fat, low cholesterol diet. oe Na arly twice the { ‘ * Tastes great Ov itsell, inn nf de Ad ae 2 Preducts, Inc.

3, Ef Paso, TX mS ee eee ee eee ee eee ee ee ee ee lo I en MANUFACTURERS CCURCN | EXFIRES 12'31/e¢ | . | SAVE “ ¢ ] ee5 1 21 1 4 3 1401 2068 9 18 21.792404 :5 1 21 1 4 4 1494 2054 87 57 34.468925 Reta5 1 21 1 4 5 1594 2022 48 89 47.030186 Gre5 1 21 1 4 6 1657 2053 85 36 22.568687 coubon5 1 21 1 4 7 1761 2044 41 46 81.953003 pers 1 21 1 4 8 1822 2049 121 45 89.070229 purchase.4 1 21 1 5 0 1169 2083 774 32 -1 5 1 21 1 5 1 1169 2110 2 2 61.977760 15 1 21 1 5 2 1402 2102 4 3 51.458702 :5 1 21 1 5 3 1494 2086 95 25 96.257179 RETAILER:5 1 21 1 5 4 1645 2085 37 28 71.617043 You5 1 21 1 5 5 1696 2083 43 31 64.594467 wil5 1 21 1 5 6 1754 2090 28 25 91.692749 te5 1 21 1 5 7 1797 2089 146 36 21.150574 rermburs2c4 1 21 1 6 0 626 2094 1317 63 -1 5 1 21 1 6 1 626 2094 9 38 48.857388 I5 1 21 1 6 2 1182 2098 93 32 90.565208 VITA5 1 21 1 6 3 1287 2099 114 32 90.565208 FIBERS 1 21 1 6 4 1494 2119 32 25 96.585808 for5 1 21 1 6 5 1536 2120 35 24 96.928467 thes 1 21 1 6 6 1582 2120 46 26 96.051147 faces 1 21 1 6 7 1636 2122 56 30 96.928436 values 1 21 1 6 8 1700 2122 24 26 96.630569 of5 1 21 1 6 9 1732 2122 43 26 93.288940 this5 1 21 1 6 10 1785 2130 119 27 57.826744 coupen5 1 21 1 6 11 1888 2129 55 16 52.698727 pit:s4 1 21 1 7 0 628 2132 1317 72 -1 5 1 21 1 7 1 628 2151 7 35 67.050316 I5 1 21 1 7 2 1183 2136 98 55 96.863884 RICE5 1 21 1 7 3 1292 2132 109 63 97.008881 BRAN5 1 21 1 7 4 1492 2153 46 26 88.152435 $.085 1 21 1 7 5 1549 2153 16 25 96.590500 if5 1 21 1 7 6 1573 2154 112 25 91.758980 submitted5 1 21 1 7 7 1695 2156 20 23 96.967804 in5 1 21 1 7 8 1724 2151 146 53 96.652016 compliance5 1 21 1 7 9 1887 2154 58 23 77.779388 with4 1 21 1 8 0 1169 2180 774 43 -1 5 1 21 1 8 1 1169 2180 240 26 37.705406 eee5 1 21 1 8 2 1495 2185 77 25 95.574570 Pacific5 1 21 1 8 3 1596 2186 48 25 96.019485 Rice5 1 21 1 8 4 1663 2187 107 26 80.888260 Products’5 1 21 1 8 5 1794 2187 149 36 29.879463 redemption4 1 21 1 9 0 628 2203 1316 49 -1 5 1 21 1 9 1 628 2203 7 37 53.955074 |5 1 21 1 9 2 1165 2230 24 13 0.000000 25 1 21 1 9 3 1286 2220 61 25 37.579769 tite5 1 21 1 9 4 1494 2218 77 34 93.253723 policy,5 1 21 1 9 5 1591 2219 100 25 35.725700 availacle5 1 21 1 9 6 1709 2228 29 17 93.763046 on5 1 21 1 9 7 1759 2224 100 24 93.763046 request.5 1 21 1 9 8 1931 2226 13 16 64.817741 &4 1 21 1 10 0 629 2249 1315 36 -1 5 1 21 1 10 1 629 2259 15 25 38.388466 Vy5 1 21 1 10 2 1178 2250 17 35 47.686008 745 1 21 1 10 3 1353 2253 3 7 33.950111 ‘5 1 21 1 10 4 1494 2251 83 25 95.467819 values 1 21 1 10 5 1573 2260 16 17 94.475067 is5 1 21 1 10 6 1607 2253 36 26 94.618835 1/205 1 21 1 10 7 1669 2253 18 25 95.529922 of5 1 21 1 10 8 1701 2260 8 17 81.461533 a5 1 21 1 10 9 1721 2258 58 20 81.461533 cent.5 1 21 1 10 10 1794 2249 57 27 88.160431 Void5 1 21 1 10 11 1867 2259 77 16 80.049500 where4 1 21 1 11 0 628 2285 1186 26 -1 5 1 21 1 11 1 628 2294 3 2 25.898079 .5 1 21 1 11 2 1173 2283 80 28 36.508339 ha5 1 21 1 11 3 1510 2285 109 24 88.816040 rohibited5 1 21 1 11 4 1630 2293 22 16 60.552418 or5 1 21 1 11 5 1660 2287 55 23 60.552418 taxed5 1 21 1 11 6 1726 2286 29 33 96.913422 by5 1 21 1 11 7 1765 2286 49 24 91.463745 law.4 1 21 1 12 0 1179 2317 508 28 -1 5 1 21 1 12 1 1179 2326 16 9 41.688519 :5 1 21 1 12 2 1312 2317 70 27 24.421570 ee5 1 21 1 12 3 1495 2317 43 24 93.292732 Mails 1 21 1 12 4 1542 2318 145 24 17.453598 coucurs5 1 21 1 12 5 1661 2311 29 41 54.982796 to:4 1 21 1 13 0 631 2314 974 87 -1 5 1 21 1 13 1 631 2314 5 36 65.478073 |5 1 21 1 13 2 670 2335 88 33 61.628071 Goods 1 21 1 13 3 771 2335 113 34 89.894852 towards 1 21 1 13 4 900 2346 57 55 58.632053 pur5 1 21 1 13 5 961 2337 88 31 94.643059 chases 1 21 1 13 6 1066 2337 36 31 96.351616 of5 1 21 1 13 7 1193 2358 2 8 0.000000 f5 1 21 1 13 8 1299 2344 91 25 37.737202 fies 1 21 1 13 9 1495 2330 64 44 66.569191 Pack:5 1 21 1 13 10 1562 2351 43 23 14.193840 eR.2 1 22 0 0 0 632 2369 467 88 -1 3 1 22 1 0 0 632 2369 467 88 -1 4 1 22 1 1 0 632 2369 467 47 -1 5 1 22 1 1 1 632 2369 5 35 69.181885 {5 1 22 1 1 2 672 2383 56 21 13.953812 ones 1 22 1 1 3 742 2365 90 48 13.953812 120z.5 1 22 1 1 4 844 2373 52 29 96.411446 box5 1 22 1 1 5 913 2372 33 29 96.750969 of5 1 22 1 1 6 1090 2410 9 6 14.963028 ;4 1 22 1 2 0 633 2407 450 50 -1 5 1 22 1 2 1 633 2423 5 34 85.915039 |5 1 22 1 2 2 672 2411 79 29 95.176132 VITA5 1 22 1 2 3 766 2410 92 30 95.265602 FIBERS 1 22 1 2 4 873 2408 77 30 95.494522 RICE5 1 22 1 2 5 966 2407 117 31 61.877495 BRAN5 1 22 1 2 6 1072 2403 16 43 61.877495 |2 1 23 0 0 0 1496 2382 132 49 -1 3 1 23 1 0 0 1496 2382 132 49 -1 4 1 23 1 1 0 1496 2382 132 49 -1 5 1 23 1 1 1 1496 2382 43 24 87.789978 PO,5 1 23 1 1 2 1552 2383 74 48 38.849949 Foxit5 1 23 1 1 3 1605 2385 23 20 0.000000 72 1 24 0 0 0 1494 2415 117 25 -1 3 1 24 1 0 0 1494 2415 117 25 -1 4 1 24 1 1 0 1494 2415 117 25 -1 5 1 24 1 1 1 1494 2415 117 25 0.000000 8S57U-01F2 1 25 0 0 0 1152 2020 306 426 -1 3 1 25 1 0 0 1152 2020 306 426 -1 4 1 25 1 1 0 1152 2020 306 426 -1 5 1 25 1 1 1 1152 2020 306 426 95.000000 PACIFIC RICE PRODUCTS, INC. 767 763 Complaint EXHIBIT B panes COO renran Page 1 of 2 1CASE Sm PpEF KD DISPLAY: VITA FIBER CASE SIZE:

Outside Carton: 1.5°D x 21,5°W x $2,757 Case Pack: 12/12 02. _ SET UP SIZE: Le Dim.: 10.5"D x 10.0"W x 3.2 Base: 18°W x 13.25"D ae A Overall Height: 65.5" -~ Complaint 115 F.T.C.

doAuuUie LD VITA FIBER RICE BRAN FACT SHEET Page 2 of 2 PRODUCT DESCRIPTION Vita Fiber Rice Bran is a high fiber supplement made by Pacific Rice Products. Using a patent pending, all natural method that stabilizes the enzymes found in the oil of the rice bran. Pacific Rice produces a flaked product that preserves all of the many nutrients found in rice bran.

ATTRIBUTES BENEFITS Can help reduce cholesterol as 2 Helps reduce the risk of heart dietary supplement. disease.

Helps reduce the risk of colon cancer.

Contains 27% dietary fiber, nearly twice that of oat bran.

Improves the HDL/LDL ratio which is the best measure of beart attack risk.

Lowers LDL. (bad cholesterol) 100% RDA of Niacin 100% RDA of Magnesium 100% RDA of Thiamin $0% RDA of Phosphorus 30% RDA of Vitamin E 30% RDA of Ircn 20% RDA of Zinc 20% RDA of Copper Provides many vitamins and minerals.

Can be eaten directly from the package or used as an ingredient.

Sweetened with apple juice.

-Topping on yogurt, cereals, salads, etc. -High fiber supplement to muffins.

breads, pancakes, any baked foods.

-Tums any main dish into high fiber meals: soups. chili, spaghemi sauce...

Versatile in use.

Package Details:

UPC $1376-00515 UPC 51376-60520 KD SHIPPER 75 02. Jar 12 oz. Box Dim:

12 jars/case 12 boxes/case 1.5 x 21.5 x 42.75 Dim: Dim: Set up Dim:

11.25 x 8.5 x 6.75 Case wi. 9.0 Ibs.

Case cube: .37 ft.

Cases/pallet: 114 Pallet wt. 1071 Ibs.

22 Pallets per standard 10.5 x 10x 8 Case wt 10.5 lbs.

Case cube: .46 ft.

Cases/pallet: 84 Pallet wt. 927 Ibs.

45ft. truck lead.

Base: 18 x 13.25 Overall Height: 65.5 Holds 6 cases of the 12 oz. Vita Fiber box.

was PACIFIC RICE PRODUCTS, INC.

Complaint EXHIBIT C : | > peooucts Pacific Rice Products, Inc.

VITA FIBER RICE BRAN SPECIAL FIBER FORMULATION Clinical studies show that VITA FIBER Rice Bran Special Fiber Formulation can help teduce blood cholesterol levels.

VITA FIBER is a produc: made from rice bran, rice gezra, fruit fiber and juice. The rice bran in VITA FIBER is made from medium grain versus long grain rice. The reason for using medium grain rice is that U.S_D.A. tesis show medium grain rice bran is best for binding bile acids which has a strong correlation with the ability to reduce cholesterol. Mediurn grain rice is primarily grown in Northern California. The following are benefits of VITA FIBER over other rice bran products: 1.

2.

nN ~) Dietary Fiver - approximately 27% to 34%. Contains monounsaturated fat with natural cholesterol reducing capabilities. . Flavor - sweet/nutty.

. Texture - uniform grind.

. Odor - neural.

. All mediura grain rics.

. Lowest Free Fatty Acids - longest stability. . U.S.D.A, tests show medium grain bran best for binding bile acids which has a strong corselation with abilicy to reduce cholesterol. . Cleaners - free of hulls, seeds, rice chits. . Sanitarily produced and sterilized.

. Free from infestation.

Dearie ee ye Complaint 115 F.T.c, EXHIBIT D SPECIAL FIBER FORMULATI ow that the ingrecies of adie: low i ER RICE BRAN :s also T and intesi:znal disor Fxhibit D PACIFIC RICE PRODUCTS, INC. 771 763 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Cleveland Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorneys, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, 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 The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue Stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order: 1. Respondent is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its office and principal place of business located at 1275 Santa Anita Court, Post Office Box 2060, Woodland, California. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

Decision and Order 115 F.T.C.

ORDER It is ordered, That respondent Pacific Rice Products, Inc., a corporation, its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of any food product, do forthwith cease and desist from misrepresenting, directly or by implication, the contents, validity, results, conclusions or interpretations of any test or study.

Il.

It is further ordered, That respondent Pacific Rice Products, Inc., a corporation, its successors and assigns, and its officers, agents, representatives and employees, directly or through any corporation, subsidiary, division or other device, in connection with the advertising, offering for sale, sale or distribution of any food product, do forthwith cease and desist from representing, directly or by implication, that any health benefit may or will be derived from consumption of such product unless, at the time such representation is made, respondent possesses and relies upon competent and reliable scientific evidence that substantiates the representation. For purposes of this provision, to the extent evidence consists of scientific or professional tests, analyses, research, studies, or any other evidence based on the expertise of professionals in the relevant area, such evidence shall be competent5 1 6 1 14 5 1291 2252 68 35 96.805298 ands 1 6 1 14 6 1386 2253 164 36 88.728493 reliable only if those tests, analyses, research, studies, or other evidence are conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession or science to yield accurate and reliable results.

Ill.

It is further ordered, That for three (3) years from the date that the representations are last disseminated, respondent shall maintain PACIFIC RICE PRODUCTS, INC. 773 763 Decision and Order and upon request make available to the Commission for inspection and copying:

(A) All materials relied upon to substantiate any representation covered by this order; and (B) All tests, reports, studies, surveys or other materials in its possession or control that contradict, qualify or call into question such representation or the basis relied upon for such representation. IV.

It is further ordered, That respondent shall distribute a copy of this order to each of its operating divisions and to each officer and other person responsible for the preparation or review of advertising material, and shall secure from each such person a signed statement acknowledging receipt of a copy of this order. V.

It is further ordered, That respondent shall notify the Commission at least thirty (30) days prior to the effective date of any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations arising out of this order.

Vi.

It is further ordered, That respondent shall, within sixty (60) days after service of this order, file with the Commission a report, in writing, setting forth in detail the manner in which it has complied with this order.

Complaint 115 F.T.C.