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Dannon Settles Activia Lawsuit

Sep 21, 2009 | Parker Waichman LLP Last year we wrote that Dannon Co. was being sued for claiming that some of its yogurts provide a health benefit that other yogurts do not. A class action suit filed in California’s Los Angeles federal court accused Dannon of falsely advertising its Activia, Activia Lite, and DanActive products and claimed Dannon initiated a massive false advertising campaign to convince consumers to pay more for yogurt containing probiotic bacteria.

Now, reports the LA Times, Dannon just settled the false-advertising lawsuit. The yogurt giant also agreed to create a $35-million fund meant to reimburse those consumers who bought Dannon’s Activia and DanActive yogurts. Dannon denied the claims and did not admit to any wrongdoing, said the LA Times, but stated that it settled because it wished "to avoid the distraction and expense of litigation," quoting spokesman Michael Neuwirth.

Probiotic is a term that means “for life.” The human intestinal tract is filled with a huge amount of helpful, probiotic bacteria, which is a good thing since the human body is designed to have symbiotic relationships with probiotic bacteria that assist in digestion and destroy harmful microorganisms. Science indicates that as the body ages, the intestinal tract becomes more rigid at only accepting intestinal flora it recognizes; it is difficult for the body to recognize or tolerate new good bacteria. Also, good bacteria decrease; therefore, it is important to supplement with probiotics, initiating this process early on in life.

Anecdotal evidence suggests friendly bacteria help a variety of digestive problems; however, in the United States, no health claims for probiotics have been approved. The United Nation’s Food and Agriculture Organization defines probiotics as live microorganisms … which confer a beneficial health effect on the host. In other words, for bacteria to be considered a probiotic, it must be beneficial to humans. As a result, if food manufacturers label a food as containing probiotics, the benefits must be proven by research.

Dannon has agreed to amend its labeling and claims of Activia and DanActive, making the scientific names of the so-called probiotics more visible; Dannon will also remove the word “immunity” from DanActive, said the LA Times. Currently, labeling for DanActive states it has "a positive effect on your digestive tract's immune system," reported the LA Times. That statement will be changed to state that DanActive will "interact with your digestive tract's immune system."

According to the LA Times, the refund will apply to consumers who purchased Activia and DanActive yogurts up to $100 per customer, citing court papers. Consumers will be required to complete a claim form, said the LA Times that will be accessible once the U.S. District Court for the Northern District of Ohio has approved the settlement.

Dannon Co, a unit of France’s Groupe Danone and has relied on Activia and DanActive to help boost its U.S. yogurt business. Activia was launched in the U.S. in 2006; DanActive, in 2007. Both are expected to account for at least 40 percent of the company’s U.S. yogurt business in 2008, Juan Carlo Dalto, Dannon chief executive, told Reuters last year.

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