Dannon Agrees to Pay States $21 Million to Resolve Advertising Issues

The Federal Trade Commission has announced the settlement of allegations
that The Dannon Co. exaggerated the health benefits of its Activia® yogurt
and DanActive® dairy beverage. Under the terms of the settlement, Dannon
does not admit any law violations, but agrees to stop promoting its yogurt
as a product that relieves temporary irregularity or its dairy beverage as a
product that reduces the likelihood of getting a cold or the flu, unless certain
conditions are met. These include that the immunity claims are specifically
permitted by the Food and Drug Administration and the irregularity claims
are substantiated by competent and reliable scientific evidence.

The company also agreed to pay $21 million to the 39 states whose attorneys
general were also investigating its advertising claims. According to a news
source, Dannon has indicated that it will in the future clarify that Activia’s
benefits require three servings of the product daily. The company reportedly
said in a statement, “Millions of people firmly believe in, benefit from and
enjoy these products, and Dannon will continue to research, educate and
communicate about the benefits of probiotics on the digestive and immune
systems.” A $35 million fund the company established earlier in the year to
resolve a class-action lawsuit involving similar allegations has apparently paid
out less than $1 million to date. See MSNBC.com, December 15, 2010.