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POM Spins FTC Ruling as Wonderful Victory for All Natural Products

Posted by Dale Buss on May 21, 2012 05:35 PM

POM Wonderful today hailed a ruling by an FTC administrative law judge as a big win for the company, which has been embroiled with the federal agency for nearly two years over the Federal Trade Commission's concerns that the creator of the pomegranate-juice craze was getting too boastful about the health benefits of its products.

But the FTC also hailed the decision by Chief Administrative Law Judge Michael Chappell as a big win. The judge "found that all respondents" from POM "violated the Federal Trade Commission Act by deceptively advertising that Pom products treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction and has entered an order against them." So who gets to declare victory?

POM says the agency's 335-page ruling "upheld POM Wonderful's right to share valuable, scientifcally validated information about the health benefits of its safe food with consumers." It issued a press release today through parent company Roll Global. "The FTC tried to create a new, stricter industry standard, similar to that required for pharmaceuticals, for marketing the health benefits inherent in safe food and natural food-based products," stated Craig Cooper, POM's chief legal officer. "They failed."

But the FTC judge upheld the agency's ruling to limit POM's more egregious health claims while allowing the company to continue to assert some basic nutritional benefits and limited health efficacy based on the historic and widely recognized properties of the ancient fruit.

Indeed, as it last week ruled in the case of Sketchers, which has agreed to reimburse consumers to the tune of $40 million, the FTC ruled that any POM marketing claims citing health benefits must be substantiated by scientific evidence.

POM can't represent health benefits unless "the representation is not misleading," Chappell said, and unless Pom has "competent and reliable scientific evicence to substantiate that the representation is true."

Cooper called the ruling "a huge win for us [and] the natural-products industry." Interestingly, just last week, POM lost a battle to Coca-Cola over Pom's complaint that a Minute Maid juice product didn't contain enough actual pomegranate juice to use the term on its label.

In its press release, POM concedes that it didn't win a clean sweep of its case against the FTC. "We disagree with the finding that some of our ads were potentialy misleading," the release said, without going into specifics. "Roll Global will make appropriate adjustments if necessary to prevent that impression in the future."

So POM believes it won a partial victory because it can continue to make benefit representations without prior approval by the FDA; Chappell said such restrictions would be "unnecessary overreaching."

At issue has been the agency's efforts to get POM to scale back health claims that it says are unsubstantiated by scientific research, such as inferring or claiming prostate-health benefits for drinkers of the juice without sufficient scientific evidence. POM executives complained that the FTC was now trying to get food and beverage companies to comply with the type of much tougher restrictions on health claims that the government already required of drug companies.

"The greater weight of the persuasive expert testimony in this case leads to the conclusion that where the product is absolutely safe, like POM products, and where the claim or advertisement does not suggest that the product be used as a substitute for conventional medical care or treatment, then it is appropriate to favor disclosure [to consumers]," POM quoted page 248 of the ruling. The company also said in its release that the FTC judge "affirmed the scientific validity behind the general health benefits of pomegranates."

After the FTC filed suit nearly two years ago, POM shifted its marketing to play up the sexy and seductive aspects of its fruit, rather than an explicit health message. But now POM is saying that "it is clear we will be able to continue to promote the health benefits of our safe food product without having our advertisements, marketing or public relations efforts pre-approved by the FDA and without having to rely on double-blind, randomized, placebo-controlled studies, the standard required for pharmaceuticals."

The FTC noted on its blog:

In the future, POM will need competent and reliable scientific evidence to support both disease claims and general claims about the health benefits, performance, and efficacy of its products. The order requires that POM’s evidence has to meet standards generally accepted in the relevant scientific field and that the company has to look at it in light of the entire body of relevant and reliable scientific evidence.

However, the order entered by the ALJ wasn't all the FTC staff had requested. For claims that any POM product was effective for preventing, treating, or curing disease, the FTC staff had asked the Judge to impose a requirement that POM get FDA approval first. The Judge said no, concluding that “would constitute unnecessary overreaching.”

What’s the next step? Right now it’s wait-and-see. The decision is subject to review by the full Commission on its own motion or at the request of any party.

Looks like less than a draw for POM Wonderful. [For more, see the New York Times' take on the ruling.]

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