Splenda Suit Points Up Dangers Of Ad Claim Cases

The recent number of lawsuits against artificial sweetener Splenda highlights the increasing risk companies face from competitors choosing to take them to court over comparative or misleading ad claims.

Industry insiders argue that such risk, combined with growing government scrutiny in the food and drug categories, has prompted some companies to curtail their marketing efforts when no law forces them to do so. Witness Kraft’s recent decision not to market some of its products to kids, and Bristol-Myers Squibb’s failure to advertise any new drug for a year.

Doug Wood, an advertising attorney with Reed Smith, New York, said that in the past, companies charged with a misleading or comparative ad complaint might have had to change or pull the ad, and that would be the end of it.

But things have changed. “The cases start to balloon,” Wood said. “Others are picking up these [cases] and are turning them into very expensive class-action suits, which has a real chilling effect on…advertising.”

So far, 10 cases involving federal court suits and state class-actions have been filed against McNeil Nutritionals, the Johnson & Johnson subsidiary that makes Splenda. All involve false or misleading claims against the Splenda slogan, “Made from sugar so it tastes like sugar.”

McNeil isn’t alone. Schick recently charged Gillette with deceptive advertising over its MP3 vibrating razor and its ads claiming the vibration gave a closer shave. A Connecticut court ordered Gillette to stop using a visual animation in its ad. Within weeks of the ruling, class-actions claiming Gillette harmed consumers with its ads were filed in eight states.

Splenda’s legal troubles began last year when Merisant, maker of NutraSweet and Equal, filed a false-advertising complaint with the National Advertising Division of the Better Business Bureau, the industry’s self-regulatory arm. McNeil responded by filing a suit in Puerto Rico seeking to have its ad claims ruled valid. Merisant and the Sugar Association—facing market-share loss to Splenda—then separately filed against McNeil to prevent it from associating its product with sugar. The class-action suits also followed.

Splenda ads featuring the sugar claim are still on the air.

McNeil has countered with its own suit against the Sugar Association, alleging it is the victim of a smear campaign. “We are clear in our communications,” said McNeil representative Monica Neufang.

“This is what happens with an advertising claim to a high-profile product,” said David Versfelt, attorney for the American Association of Advertising Agencies.

Some argue that marketing decisions made to protect a brand in today’s regulatory environment can hurt companies over time. The Distilled Spirits Council of the U.S. indefinitely yanked its TV ads in 1948. DISCUS rep Lisa Hawkins said, “By keeping ourselves off the air so long, we had reinforced the misperception that somehow spirits were different than beer or wine.”