Danone subsidiary settles lawsuit with $35 million payout
The Dannon Company, American-based subsidiary of French dairy group Danone, has announced the US$35 million (A$40.6m) settlement of a class action lawsuit regarding alleged misleading advertising for its Activia and DanActive products.
Under the settlement, Dannon will make certain changes and enhancements to the labeling and marketing of Activia and DanActive to increase the visibility of the scientific names of the unique strains of probiotics that are in each of these products. Dannon also agreed to create a fund of up to $35 million to reimburse qualified consumers for the cost of buying the products.
Filed in January 2008, the case centred on complaints that the company had exaggerated the health benefits of certain yoghurt products in their advertising, a claim which Dannon denies.
“The decision to settle this case is based on the Company’s desire to avoid the distraction and expense of litigation and to quickly resume 100 per cent focus on making products that provide proven health benefits to millions of highly satisfied consumers,” Michael Neuwirth, spokesperson for The Dannon Company, explained. “This resolves the plaintiff’s concerns while affirming the essence of the claims of Activia and DanActive, which are substantiated by years of scientific research.”
Dannon said they were cooperating with the Federal Trade Commission (FTC), which is currently reviewing similar claims. The FTC routinely reviews consumer advertising and Dannon advised they were confident the matter will also be resolved soon.
