Consumer Law

It has been a bad few weeks for breakfast cereal manufacturers.  First the Federal Trade Commission took Kellogg to task for making false and unsubstantiated claims for its Frosted Mini-Wheats cereal.  According to the FTC's complaint, Kellogg claimed that Frosted Mini-Wheats were "clinically proven" to improve children's attentiveness by 20%.  According to the FTC, Kellogg had studies showing that only about 50% of children showed any improvement in attentiveness and less than 10% showed improvement of 20% or more.  Thus, based on the results of Kellogg's own studies the FTC alleged that the claims were false and violate the FTC Act.  As part of the consent order settling the matter, Kellogg is prohibited from making comparable claims about Frosted Mini-Wheats unless the claims are true and not misleading.  The order also "fences in" Kellogg from making claims about cognitive health, process, or function provided by Frosted Mini-Wheats or any morning food or snack food unless those claims are true and substantiated.  The order also prohibits Kellogg from misrepresenting the results of tests, studies, or research regarding any morning or snack food product. 

Not to be outdone, the Food and Drug Administration took aim at Cheerios Toasted Whole Grain Oat Cereal manufactured by General Mills.  According to a warning letter issued by the FDA, claims made on the label promote Cheerios "for conditions that cause it to be a drug because the product is intended for use in the prevention, mitigation, and treatment of disease."  The problematic claims on the cereal box state that consumers can lower their cholesterol by 4% in 6 weeks by eating Cheerios.  These claims, according to the FDA, "indicate that Cheerios is intended for use in lowering cholesterol and therefore in preventing, mitigating, and treating the disease hypercholesterolemia."  The FDA's position is that Cheerios "may not be legally marketed with [these claims] in the United States without an approved new drug application.  The letter makes a number of other assertions, including that Cheerios is "misbranded" because of the "unauthorized health claims in its labeling."  Absent from the FDA's letter is any assertion that the claims are false.

While the two actions have some similarities, the FTC's action is likely to benefit consumers, while the FDA's action is likely to make consumers less well off.  Kellogg made very aggressive establishment claims and lacked the data to support those claims.  Therefore, the FTC's complaint and consent order are justified and help prevent consumers for overpaying for a product that does not provided the claimed benefits.  On the other hand, the FDA's position is based on the fiction that consumers would understand the Cheerios box as communicating the message that Cheerios is intended as a treatment for hypercholesterolemia, rather than intended as a breakfast food that also happens to provide some benefits beyond alleviating one's hunger in the morning.  This will deprive consumers of valuable information.