POM Wonderful battles feds over questionable ads
After federal regulators ruled the company's ads were misleading, the juice maker prepares to fight on.
POM Wonderful's ads are hard to miss: they're bold, and not only because of the deep-red color of the pomegranate juice they promote. The spots have promised consumers they could "cheat death" while sipping "heart therapy."
Now the U.S. Federal Trade Commission has ruled that the advertisements are misleading and can't be used unless they're backed by "two randomized, well-controlled, human clinical trials," according to a ruling from the agency Wednesday.
But POM Wonderful isn't going along with the FTC's decision.
The company will fight on and appeal in federal court, according to a statement given to MSN Money. It marks the continuation of a fight between POM and the agency, which began in 2010 when the FTC sued POM to halt the ads.
"POM Wonderful categorically rejects the FTC's assertion that our advertisements made any misleading disease treatment or other health claims," the company said. "This order ignores what $35 million of peer-reviewed scientific research, centuries of traditional medicine and plain common sense have taught us: Antioxidant-rich pomegranate products are good for you."
The ruling may impact other health food makers, since the FTC said its order "requires competent and reliable scientific evidence to support claims about the 'health benefits, performance or efficacy' of any food, drug or dietary supplement."
The broader implications for the food industry is one motivation POM Wonderful gave for its decision to appeal the ruling.
"By holding health food companies to pharmaceutical research standards and 'implying' disease treatment claims that are not being made, the FTC is going to stifle research across the entire food industry," the company said in its statement.
Regardless of how the fight turns out, POM Wonderful has built a nationally recognized brand with its ad campaign. Once virtually unknown, pomegranate juice is now consumed from the bottle, used in cocktails and sold in bottled teas, largely due to the marketing campaigns from POM Wonderful.
POM Wonderful's products had sales of more than $130 million 2011, according to the Wall Street Journal. The company is owned by closely held Roll Global.
More on Money Now
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The farm bill includes a 15-cent levy on the sale of fresh-cut trees. A similar measure was killed in 2011.
- Should you get a store credit card?
- The best credit cards of 2013
- Can a new chief exec keep GM on course?
- 'Tips for Jesus' big spender unmasked?
- Chinese investors are buying up Detroit
- Mega Millions jackpot hits $344 million
- 5 reasons to think twice about a balance transfer card
- Will I have to pay taxes because of a foreclosed home?
- 5 things that won't affect your credit scores
[BRIEFING.COM] Red figures continue to prevail on stock monitors as the major indices remain pinned well below the unchanged line. Some areas though -- like the small-cap and mid-cap stocks -- are getting hit harder than others.
At this juncture, the Russell 2000 is down 1.4% while the S&P Midcap 400 Index is off 1.3% compared to a 0.8% drop for the S&P 500. It would be remiss not to add that, on a year-to-date basis, the Russell 2000 (+30%) and the S&P Midcap 400 ... More
More Market News
The company is planning a 10-for-1 split, which will cut its share price dramatically.