Currently browsing posts about: FTC (Federal Trade Commission)

Dec 26 2011

Lobbying in action: PepsiCo vs. kids’ marketing guidelines

Lobbyists are supposed to report what they do and how much money they spend doing it, but this information is not easily available to the public.

CBS News reports that PepsiCo spent $750,000 to lobby government last quarter.  This comes to roughly $3 million annually, a drop in PepsiCo’s annual $30.6 billion sales in the U.S.—$57.8 billion worldwide.

What is Pepsi lobbying about?  Open Secrets publishes the filing information on its website.

PepsiCo lobbied the House, Senate, Executive Office of the President, FTC, FDA, and USDA, focusing on these issues, among others:

  • Childhood Obesity (generally, no specific legislation)
  • Food and beverage labeling (generally, no specific legislation)
  • Marketing and advertising issues in response to Interagency Working Group on Food Marketed to Children (IWG) (see previous posts)
  • Restrictions on use of supplemental nutrition assistance program (no specific legislation)
  • Implementation of S. 3307-healthy, Hunger-Free Kids Act of 2010
  • Biofuels policy generally

I’m especially interested in lobbying against the IWG guidelines.  Pepsi, of course, was not alone in opposing them.  As I noted in a previous post, the the Sunlight Foundation reported on food companies lobbying against them.

Media companies also opposed the IWG guidelines, as shown by Viacom’s annual filing with the Security and Exchange Commission, a document forwarded to me by Jeffrey Chester of the Center for Digital Democracy:

…some U.S. policymakers have sought limitations on food and beverage marketing in media popular with children and teens. In April 2011, the Interagency Working Group on Food Marketed to Children (the “IWG”)…requested comment on proposed nutritional restrictions for food and beverage marketing directed to children and teens aged 17 years and under.

Although the guidelines are nominally voluntary, if implemented by food and beverage marketers, they could have a negative impact on our Media Networks advertising revenues, particularly for our networks with programming targeted to children and teens.

Congress asked the FTC to set up the Interagency Working Group to propose guidelines on marketing foods to kids.  Did it really think food companies would accept such guidelines, voluntarily at that?

As I keep pointing out, food companies have to market to kids to sell products and grow sales every quarter.

If they don’t sell products to kids in the U.S., they will intensify efforts to sell products to kids in developing countries, thereby outsourcing childhood obesity.

Surely it’s time for mandatory rules about marketing junk foods to kids?  If not now, how about soon?

Dec 17 2011

Congress caves in again. Delays IWG recommendations.

It’s hard to believe how thoroughly Congress is in bed with the food industry but here is another example: the House has just inserted language in the Consolidated Appropriations Act of 2012  requiring the Federal Trade Commission’s Interagency Working Group (IWG) on Food Marketed to Children to conduct a cost/benefit analysis of the final recommendations in its report.

This, of course, will delay or even kill the IWG’s recommendations for voluntary nutrition standards for marketing foods to kids (see previous posts).

Get this: Section 626 of the Act says:

None of the funds made available in this Act may be used by the Federal Trade Commission to complete the draft report entitled “Interagency Working Group on Food Marketed to Children: Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts” unless the Interagency Working Group on Food Marketed to Children complies with Executive Order 13563.

And what, pray tell, is Executive Order 13563?  Agencies may:

  • Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs
  •  Tailor its regulations to impose the least burden on society
  • Select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits
  •  To the extent feasible, specify performance objectives
  • Identify and assess available alternatives to direct regulation

Recall that the industry spent a reported $37 million to oppose the IWG recommendations.  Apparently, it was money well spent.

Let’s hope the Senate has sense enough to delete this section so that the FTC can put its long-delayed and already watered-down standards in place.

Additions, December 18: No such luck.  Consider this passed.  Thanks to Michele Simon for pointing out that Congress cannot legally require a cost/benefit analysis of the IWG guidelines because they are voluntary and, therefore, not regulations.  And thanks to Margo Wootan for explaining how and where to contact Congress.

 

Oct 19 2011

Consumer groups complain to FTC about PepsiCo’s digital marketing to kids

This morning, the Center for Digital Democracy announced that consumer groups have filed a complaint (and see the appendices) with the Federal Trade Commission against PepsiCo.

Why?  Because of the ways PepsiCo uses digital marketing techniques to push its products to children and adolescents.

These include:

  • Disguising marketing as video games, concerts, and other “immersive” experiences
  • Claiming to protect teen privacy while collecting a wide range of personal information
  • Using viral techniques that violate FTC guidelines

The report points to Pepsi’s Hotel 626 video game as a particularly egregious example.

Also this morning, Public Health Law & Policy released a comprehensive report on the kinds of digital marketing tactics that are now used routinely by fast food, snack food, and soft drink companies. The report identifies specific marketing campaigns from PepsiCo, McDonald’s, and others that exploit kids’ use of digital media.

I can’t wait to see what the FTC does with this.

In the meantime, here’s Michele Simon’s enlightening report on what it’s like to play Hotel 626.

And Lori Dorfman of the Berkeley Media Studies Group sends these case studies on digital marketing to kids:

 

Oct 12 2011

House holds hearings on nutrition standards for food marketing to kids

Reports are coming in on the House hearings on the IWG report recommendations.  The IWG, recall from the previous post, is an Interagency Working Group of four federal agencies attempting to set nutrition standards for foods allowed to be marketed to kids.

This first report comes from Broadcasting & Cable:

The first panel of a joint hearing Wednesday on government-proposed food marketing guidelines featured government officials explaining that the principles, announced last April, are only voluntary recommendations to Congress that industry can ignore if they chose, while legislators, primarily Republicans, countering that they represent Big Brother government intruding into meal planning for families and a focus on marketing, without scientific backing, rather than focusing on more physical activity.

Republican lawmakers, it seems, want more science.  That’s always step one in undermining public health proposals: attack the science.  Subsequent steps, you may recall, include attacking critics, focusing on physical activity, and blaming personal responsibility for obesity and its consequences.

According to Healthwatch, Representative Henry Waxman (Dem-Calif)

Compared Republican defenders of unbridled food marketing to children to past champions of the tobacco industry. [He]  drew parallels between Wednesday’s hearing on proposed voluntary marketing restrictions and a 2003 hearing during which some Republicans promoted the safety of smokeless tobacco.

“I just find this an amazing hearing,” Waxman said. “The only thing I can analogize it to is after all the tobacco issues we discussed for many years, Republicans took charge and we never heard anything more about tobacco. Then, suddenly we had a hearing about tobacco.

And the hearing was about how smokeless tobacco should be encouraged as a way for smokers to give up smoking. It was geared to promoting an industry that no doubt supported financially many of the members. I wonder if this hearing is about the same subject.”

What I find most disturbing is the FTC’s backing down on the recommendations which were agreed upon by four federal agencies and voluntary.  CNN reports that David Vladeck, director of the FTC Bureau of Consumer Protection, said:

The coalition of government agencies is “in the midst of making significant revisions” to the original proposal.

Among the changes he suggested are narrowing the age group targeted and focusing on children aged 2 to 11 instead of up to age 17 and allowing marketing of the unhealthier foods at fundraisers and sporting events.

Vladeck also said that his agency would not recommend that companies change packaging or remove brand characters from food products that don’t qualify, as was originally suggested in the guidelines.

“Those elements of packaging, though appealing to children, are also elements of marketing to a broader audience and are inextricably linked to the food’s brand identity,” Vladeck said at the hearing.

This, as I keep pointing out, is about protecting corporate health at the expense of children’s health.

Sad.

Sep 28 2011

Help! Rescue the government’s marketing-to-kids nutrition standards!

I’ve just gotten an urgent plea from Margo Wootan at the Center for Science in the Public Interest (CSPI).

Please encourage everyone to write to President Obama, First Lady Michelle Obama, and federal agencies to support the nutrition standards for marketing foods to kids.

As I’ve discussed previously, these were created jointly by the Interagency Working Group (IWG) of four federal agencies—CDC, FDA, FTC, and USDA.

Under intense pressure from the food and entertainment industries and their friends in Congress, the IWG’s proposed guidelines—voluntary, no less—are in danger of being withdrawn.

Doing that might help corporate health but would do nothing for public health.

CSPI organized 75 researchers (including me) to send a letter to the President urging support of the voluntary guidelines and expressing dismay at the campaign of disinformation aimed at getting them withdrawn.

Junk-food advertisers, in the guise of the Sensible Food Policy Coalition, have attacked the voluntary guidelines as an assault on the First Amendment, a point debunked by top Constitutional experts, and claimed that adopting the voluntary guidelines would result in job losses, based on a flimsy industry “study.”

….It would be a real setback for children’s health if the Administration backed down on strong guidelines for food marketing to children, especially given the transparently specious arguments of junk-food advertisers….Denying the science on food marketing and childhood obesity is like denying the science on global warming or evolution.

But the food industry is dug in on this one.  For example, a reader sent me this letter from Tom Forsythe, Vice President, Corporate Communications, General Mills (excerpts follow with my comments in brackets):

Your email notes that we have lobbied against the Interagency Working Group (IWG) proposal.  That is correct.  We have serious concerns about the IWG proposal.

Our most advertised product is cereal – and we stand behind it.   Cereal is one of the healthiest breakfast choices you can make….If it is a General Mills cereal, it will also be a good or excellent source of whole grains.

Childhood obesity is a serious issue – and General Mills wants to be part of the solution.  But if the issue is obesity, cereal should perhaps be advertised more, not less.

…You can be assured than food and beverage companies have studied every letter, comma and period in the proposal.  We know what it says, and what it does not.

For example, we know that 88 of the 100 most commonly consumed foods and beverages could not be marketed under the IWG guidelines.  The list of “banned” items under the guidelines would include essentially all cereals, salads, whole wheat bread, yogurt, canned vegetables, and a host of other items universally recognized as healthy [Note: I'm not at all sure this is true--MN].

Despite the characterizations used to advance them, the IWG guidelines would not be voluntary, in our view.  The IWG guidelines are advanced by two of the agencies most responsible for regulating the food industry, as well as the agency most responsible for regulating advertising.  Ignoring their “voluntary guidance” would not be an option for most companies.

Regulation has already been threatened (even demanded) should companies choose not to comply – and litigation would inevitably follow.

The IWG guidelines also conflict with most existing government programs and definitions relative to food.  For example, many products that meet the U.S. Food and Drug Administration’s current definition of “healthy” could not be advertised under the IWG guidelines [It would be interesting to see examples].

Many products included in the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program fail the IWG standards, as do most products encouraged and subsidized under the USDA’s Women, Infants and Children Feeding Program (WIC) [If so, this is a sad commentary on what we encourage low-income mothers and children to eat].

Finally, your email suggests companies should focus on providing feedback via public comment.  We agree.  We have reviewed every detail of the IWG proposal – and we remain opposed, as our public comment explains.

My interpretation: if food companies are this upset, the guidelines must be pretty good.

Companies have the right to sell whatever they like.  But they should not have the right to market it as healthy or to kids.

Tell the IWG you support their guidelines.  Tell the White House to protect the guidelines.  Now, please.

 

 

Sep 6 2011

The food industry vs. nutrition standards: a First Amendment issue?

I just received a message from Samantha Graff, the director of legal research at Public Health Law & Policy, an advocacy group in Oakland, California.

This morning, she writes, 36 legal scholars—including several experts on the First Amendment—weighed in on the food industry’s fight against proposed nutrition standards for foods and beverages marketed directly to children.  This is the very issue I wrote about in yesterday’s San Francisco Chronicle column and have discussed in previous posts.

In a letter sent this morning to federal agencies, the legal scholars point out that because food and beverage companies are free to ignore the nutrition recommendations, the draft principles “do not restrain or compel anyone’s speech. They are not, in fact, government regulations at all.”

A key industry strategy has been to recruit lawyers to write white papers charging that the proposed nutrition standards violate First Amendment rights to free speech.

Recall that Congress asked the FTC to join with the FDA, CDC, and USDA to recommend standards for food products marketed to kids.  These agencies, collectively known as the Interagency Working Group on Food Marketed to Children (IWG), issued Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts.   This report outlines proposed voluntary standards that have been open for public comment.

My initial reaction: the standards were much too generous.  But that’s not how the food industry sees them.  Food companies realized that the standards exclude large proportions of the junk foods they currently market to kids.

They created a new lobbying group, “Sensible Food Policy Coalition” (shades of George Orwell’s 1984).   This group is doing everything it can to block the proposed standards.   Its website links to white papers opposing the recommendations on First Amendment grounds.

David Vladeck, director of the FTC’s Bureau of Consumer Protection, responded to some of these claims in a recent blog post, in which he emphasizes the voluntary nature of the proposals.

I’ve said it before and repeat: I am not a legal scholar but intention seems to matter in legal decisions.  The intent of the First Amendment was to protect political and religious speech. I cannot believe that the intent of the First Amendment was to protect the right of food companies to market junk foods to kids.

Marketing to children is unethical.  It should be stopped.  And it’s the government’s responsibility to do it.

Jul 14 2011

Last chance to comment on proposed kids’ food marketing standards

Today is the last day to comment on the federal Interagency Working Group’s (IWG) proposed nutrition standards for marketing food products to kids.  The IWG is a joint project of four federal agencies with at least some responsibility for public health: FTC, FDA, USDA, and CDC.

As I discussed back in April, I thought the IWG standards were generous and gave food companies plenty of room to market junk foods with impunity.  Maybe, but that’s not how food companies see it.  They think it will cause so much havoc with their marketing that they are fighting back, big time.

Large food companies joined together to create the “Sensible Food Policy Coalition.”  This entity paid for an economic assessment.  On July 8, the Coalition released Global Insight’s report of this assessment—a call to arms arguing that the “administration’s misguided ad restrictions would cost 74,000 American jobs.”

The report’s point is that restricting advertising would have unintended economic consequences, particularly losses in sales and revenues, and therefore jobs.  The report estimates an astonishing loss of $28.3 billion from manufacturing and retail sales, just in the first year, translating to “at least 74,000 lost jobs.”

This makes me think that the standards may have some merit.  Campbell Soup, for example, has just announced that because its low-salt soups aren’t selling, they are putting the salt back in.  Oh.

In any case, industry pushback seems to be having an effect.  As I discussed in my post a week or so ago, David Vladeck of the FTC used his blog to discuss industry mythology about the proposed standards.  I thought his statement backpedaled on even a hint of federal regulation of food marketing to kids.

MYTH #2: The Working Group’s proposal is regulation by the back door

….This is a report to Congress, not a rulemaking proceeding, so there’s no proposed government regulation. In fact, the FTC Act explicitly forbids the Commission from issuing a rule restricting food advertising to children. So the FTC couldn’t issue a rule on this subject if it wanted to, which it doesn’t. Simply put, a report like this can’t be a rule — whether it’s delivered to Congress by the front door, the back door, or the kitchen door.

The IWG is collecting comments on its proposals through close of business today.  If you need a rationale for filing a comment, read Larry Cohen’s piece in the Huffington Post.

Comments don’t have to be long or complicated.  Just say what you think.

Go to this site to file them.

Or go to the PreventObesity site for additional suggestions.

Do this today!

 

 

 

May 23 2011

POM Wonderful vs. the FTC: what this is about

On May 24, an administrative law judge will deal with the matter of the Federal Trade Commission’s (FTC) complaints that health claims made for POM Wonderful pomegranate juice are unsubstantiated by science.

To review:  last September, the FTC complained that the company was advertising its juice with unsubstantiated claims like these:

  • Clinical studies prove that POM Juice and POMx prevent, reduce the risk of, and treat heart disease, including by decreasing arterial plaque, lowering blood pressure, and improving blood flow to the heart;
  • Clinical studies prove that POM Juice and POMx prevent, reduce the risk of, and treat prostate cancer, including by prolonging prostate-specific antigen doubling time;
  • Clinical studies prove that POM Juice prevents, reduces the risk of, and treats, erectile dysfunction.

The FTC argues that these claims are false because POM Wonderful’s studies do not prove what the company claims.  The FTC particularly takes exceptions to the company’s advertisements:

If you want to follow the legalities, the FTC provides a handy summary.

According to FoodNavigator.com, this company must be supporting armies of lawyers:

POM is currently embroiled in a complex web of litigation, having itself launched legal action against the FTC alleging it had exceeded its statutory authority by establishing a two-clinical trial standard to back claims.

It has also filed actions against Coca-Cola Minute Maid, PepsiCo Tropicana and Ocean Spray alleging misleading claims about the contents of their pomegranate-containing juice products.

Separately, POM is itself accused of misleading consumers in a class action lodged in a Florida state court.

Leaving this particular company’s legal strategies aside, at issue is whether food health claims need to be backed up by science.   POM says it has the science.   The FTC says it doesn’t.   I will have more to say about that issue in subsequent posts.

In the meantime, it will be interesting to see what happens at the hearing.  Stay tuned.

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