65 Lawsuits Filed Against Big Fries and Big Chains
Raw Foods Be the Fast Food of the Future?
usual California lawyers will continue to use the state’s own
unique laws to tackle food policy issues as two recent lawsuits based
upon Prop 65’s notice requirements illustrate.
he doesn’t sue “small fries,” Raphael Metzger, a Southern
California “Prop 65” plaintiff’s attorney, has filed
an action in Los Angeles Superior Court against Burger King and McDonald’s
alleging that the firms have to post Prop 65 health warnings in their
restaurants because their french fries (like french fries everywhere
along with other fried and baked foods) contain acrylamide, a carcinogen.
Prop 65 warning notices are required for acrylamide exposures in excess
of 0.2 mg., which is far lower than the amount per serving found in
many foods. Metzger’s suit also includes an Unfair Competition
Claim. Industry has responded by noting that Prop 65 has an exception
for cooking necessary to render food palatable or kill microorganisms.
Plaintiffs Prop 65 attorneys are now stating that Metzger’s lawsuit
might push the envelope on federal legislation to preempt Prop 65 labeling
of processed food products. Talk about a possible self-inflicted wound.
the Contaminants and Natural Toxicants Subcommittee of the FDA’s
Food Advisory Committee recently met to assess the safety of acrylamide.
At the meeting the FDA estimated that there is a 500 fold safety factor
for current acrylamide exposure and a Swedish study concluded that
there is no link between acrylamides and cancer.
Attorney General Bill Lockyer has filed Prop 65 lawsuits against 5
supermarket chains claiming that they violated the act by not posting
warning notices that fresh tuna, swordfish and shark contain high
levels of mercury. The California Grocers Association responded that
the organization is working with the AG’s office on a proposed
notice. It appears that restaurants will be next in line.
Extends “Sliding Scale” COPPA Consent Rule; Fines Company
FTC has extended the COPPA rule allowing sliding scale parental consent.
The sliding scale rule was scheduled to expire on April 21. The FTC’s
action extends the rule until April 21, 2005.
requires that a website operator obtain verifiable parental consent
when collecting personal information from children 12 and younger.
Under the sliding scale rule, if the website operator is not going
to release the child’s information to a third party, then verifiable parental
consent can be obtained by email, or obtaining the parent’s address
or telephone number and confirming the parent’s consent by letter
or telephone call. Once the rule expires, consent can only be obtained
by a written consent form, credit card verification, calling a toll
free number, digital certificate or use of a PIN.
Separately, Ohio Art, the maker
of the Etch-A-Sketch toy, has agreed to pay a $35,000 penalty for
collecting personal information from children without obtaining verifiable
parental consent, collecting more information than was necessary,
not providing parents with the opportunity to review the child’s
personal information and not providing opt out alternative.
Expect to see continued strict enforcement of COPPA by the FTC. Zackler & Associates
can audit your online marketing for COPPA compliance.
SUES TO BLOCK SEAGRAM DEAL
concerns that a proposed agreement to acquire Seagram’s wine and
spirit business will lead to less competition in the sale and distribution
of rum, the Federal Trade Commission has brought suit in October 2001
to block the transaction. Under the proposed deal, Diageo PLC and Pernod
Ricard S.A. were to jointly acquire the assets of Vivendi Universal
S.A.’s Seagram Wine and Spirits business. Seagram and Diageo
are currently the number two and three sellers of rum in the United
States. The number one seller of rum in the U.S. market is Bicardi.
FTC alleges that if the deal were to be approved, the new number three
rum distributor would have only a two-percent market share, leaving
the Bicardi and Diageo/Seagram with effective duopoly control of the
proposed merger would consolidate the second and third largest U.S.
rum producers, leaving only two large sellers of rum in the United States.
This will create a dangerous likelihood of reduced competition and higher
prices for the consumers of rum,“ said Joe Simons, the Director
of the FTC Bureau of Competition.
the companies involved in the transaction are hoping to resolve FTC
concerns and reach a settlement before the case comes to trial. If
the deal were allowed to proceed, Diageo, the world’s number one alcohol
and spirits company, would acquire 61% of Seagram’s liquor assets,
including Crown Royal, VO Canadian whiskeys, Captain Morgan and Myers
rums, 7 Crown American whisky and Sterling Vineyards. Pernod would get
the remainder of Seagram’s alcohol business, including Chivas
Regal, Glen Grant, Royal Salute and Glenlivit whiskies, Seagram’s
Extra Dry gin and Martell cognac. Earlier this year, the deal was approved
by European regulators after the acquiring companies agreed to divest
certain Seagram’s assets including Sandeman ports and sherries
and Seagram’s coolers and mixers divisions.
APPROVES NESTLE PURCHASE OF RALSTON PURINA
December 11, 2001, the FTC approved a proposed consent decree that
will allow Nestle Holdings, Inc. to complete its $10.3 billion purchase
of Ralston Purina Company. FTC said the consent decree ensures that
the combined companies will not control the dry cat food market in
the United States. Under the consent decree, Nestle has agreed to
divest Ralston Purina’s Meow Mix and Alley Cat brands to J.W. Childs Equity Partners
(d.b.a. Hartz Mountain). Nestle has also agreed to relinquish its international
trademarks in the brands and to co-pack both brands for Childs for up
to two years. Childs has agreed not to re-sell the cat food assets for
five years without the FTC’s consent.
the terms provided by this consent decree, Nestle would acquire, among
other things, Meow Mix, the best selling cat food brand in the country,
and as a result would have nearly a 45% share of the U.S. dry cat food
market across all levels of distribution. The order will ensure that
Childs becomes a strong competitor in the market for dry cat food, to
the benefit of consumers nationwide,” said the FTC’s Joe
Simons. Nestle’s current pet food business includes the Friskies,
Fancy Feast, Mighty Dog and Alpo brands. Ralston Purina’s remaining
pet food brands include Dog Chow, Cat Chow and Purina Special Care.
Even after the divestments, Nestle will now control 45% of the U.S.
pet food market.
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