Private Label Wins Legal Victory Over National Brand

Private label won over national brand in court this week as a jury ruled against Mead Johnson’s claims that a private label competitor’s infant formula was less nutritious than its Enfamil LIPIL Infant Formula. PBM Products, LLC, the makers of store brand infant formulas, had filed a lawsuit in April of this year, claiming that Mead Johnson had engaged in false and misleading campaigns against its store brand products, which are sold at Walmart, Target and Krogers, among others.The claim focused specifically on Mead Johnson’s direct mailing to more than 1.6 million consumers, which featured a blurry picture of a cartoon duck next to a clear picture of the same image, suggesting that other formulas offered inferior ingredients that could result in poor eye and brain development for babies. PBM also cited statements made in Enfamil LIPIL advertisements that store brand formulas are a “cut-back in nutrition” compared to the Mead Johnson products. But the nutritional supplements that Mead Johnson refers to as LIPIL and touts in ads offer the same pair of fats (DHA, or docosahexaenoic acid, and ARA, or arachidonic acid) PBM offers in its products, per the company. “It’s a gross, false, misleading ad . . . We have the same exact source of the lipids, with the same exact levels from the same exact supplier,” said Joe Shields, director of public relations for PBM Products. “Really, what it means is that store brand formulas are nutritionally equivalent to national brand formulas like Enfamil.”PBM was awarded $13.5 million in damages by a jury in the U.S. District Court for the Eastern District of Virginia—one of the largest damages awards ever granted for a false advertising case. This is the third false advertising case that PBM has won against Mead Johnson, with the first two filed in 2001 and 2002, although it’s first that has focused specifically on the LIPIL ingredients and settled by a jury decision.Enfamil’s advertising had been handled by WPP Group’s OgilvyOne, but last month Mead Johnson changed agencies to the Publicis Groupe team of Saatchi & Satchi and Digitas. Mead Johnson spent $1.9 million on advertising last year, and an estimated $5.1 million over the first three quarters of 2009, per Nielsen.“The [goal] of our marketing efforts are to focus on the quality of our products and the benefit they provide and the world-class science and R&T on which those innovations are based,” said Chris Perille, vice president of corporate communications, who emphasized that the company had documented in published clinical studies the benefits of the LIPIL ingredients. “What we will do is what we have always done—communicate quality of products, benefits they provide and the scientific basis and proof. It’s about what our products do and not what the other products don’t.”The decision comes at a time when private label is seeing a surge. In August, Nielsen reported a rise in the sector of 7.4 percent compared to 2008, while a report from Mintel GNPD this summer also cited an improvement in creative packaging and quality ingredients.Robert Pasikoff, founder and president of BrandKeys, sees this legal victory as an example of a national brand underestimating a private label and a lesson for big brands in the future. “You can’t be as flip as you used to be when things came in black-and-white cans with a stenciled label on them,” said Pasikoff. “They are real and active competitors in most spaces and you have to be careful about how you go up against them.”

Brand Marketing

Private Label Wins Legal Victory Over National Brand

Alex Palmer

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Alex Palmer