Bee-Sweet, Inc., et al.; Proposed Consent Agreement With Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 902-3304]

Bee-Sweet, Inc., et al.; Proposed Consent Agreement With Analysis

to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition, this

consent agreement, accepted subject to final Commission approval, would

prohibit, among other things, a North Carolina corporation and its

officer from representing that bee pollen products are effective as a

cure or in mitigating certain conditions and physical ailments, and

from misrepresenting the existence, contents, validity, results,

conclusions, or interpretations of any test or study.

DATES: Comments must be received on or before January 9, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Ronald Waldman, FTC/New York Regional,

150 William S., Suite 1300, New York, N.Y. 10038. (212) 264-1242.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of

the Commission's Rules of Practice (16 CFR 2.34), notice is hereby

given that the following consent agreement containing a consent order

to cease and desist, having been filed with and accepted, subject to

final approval, by the Commission, has been placed on the public record

for a period of sixty (60) days. Public comment is invited. Such

comments or views will be considered by the Commission and will be

available for inspection and copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of

Practice (16 CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order to Cease and Desist

In the Matter of: Bee-Sweet, Inc., a corporation; and Benny G.

Morgan, individually and as an officer and director of said

corporation.

The Federal Trade Commission having initiated an investigation of

certain acts and practices of Bee-Sweet, Inc., a corporation, and Benny

G. Morgan, individually and as an officer of said corporation,

hereinafter sometimes referred to as proposed respondents; and it now

appearing that proposed respondents are willing to enter into an

agreement containing an order to cease and desist from the acts and

practices being investigated.

It is hereby agreed by and between proposed respondents, and their

attorney, and counsel for the Federal Trade Commission that:

1. Proposed respondent Bee-Sweet, Inc. is a corporation organized,

existing, and doing business under and by virtue of the laws of the

State of North Carolina, with its office or principal place of business

located at 10370 North, NC Highway 150, Clemmons, North Carolina 27012.

2. Proposed respondent Benny G. Morgan is an officer of said

corporation. Individually and in concert with others, he formulates,

directs, and controls the acts and practices of corporate respondent.

Respondent Benny G. Morgan's business address is 10370 North, NC

Highway 150, Clemmons, North Carolina 27012.

3. Proposed respondents admit all the jurisdictional facts set

forth in the draft of complaint here attached.

4. Proposed respondents waive:

(a) Any further procedural steps;

(b) The requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law; and

(c) All rights to seek judicial review or otherwise to challenge or

contest the validity of the order entered pursuant to this agreement.

5. This agreement shall not become part of the public record of the

proceeding unless and until it is accepted by the Commission. If this

agreement is accepted by the Commission, it, together with the attached

draft complaint, will be placed on the public record for a period of

sixty (60) days and information in respect thereto publicly released.

The Commission thereafter may either withdraw its acceptance of this

agreement and so notify the proposed respondents, in which event it

will take such action as it may consider appropriate, or issue and

serve its complaint (in such form as the circumstances may require) and

decision, in disposition of the proceeding.

6. This agreement is for settlement purposes only and does not

constitute an admission by proposed respondents of facts, other than

jurisdictional facts, or of violations of law as alleged in the draft

of complaint here attached.

7. This agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Sec. 2.34 of the Commission's

Rules, the Commission may, without further notice to proposed

respondents: (1) issue its complaint corresponding in form and

substance with the attached draft of complaint and its decision

containing the following order to cease and desist in disposition of

the proceeding; and (2) make information public in respect thereto.

When so entered, the order to cease and desist shall have the same

force and effect and may be altered, modified, or set aside in the same

manner and within the same time provided by statute for other orders.

The order shall become final upon service. Delivery by the U.S. Postal

Service of the complaint and decision containing the agreed-to order to

respondents' addresses as stated in this agreement shall constitute

service. Proposed respondents waive any right they might have to any

other manner of service. The complaint may be used in construing the

terms of the order, and no agreement, understanding, representation, or

interpretation not contained in the order or in the agreement may be

used to vary or contradict the terms of the order.

8. Proposed respondents have read the proposed complaint and order

contemplated hereby. They understand that once the order has been

issued, they will be required to file one or more compliance reports

showing that they have fully complied with the order. Proposed

respondents further understand that they may be liable for civil

penalties in the amount provided by law for each violation of the order

after it becomes final.

Order

Definitions

For purposes of this order, the following definitions shall apply:

A. ``Bee pollen product'' shall mean any product intended for human

consumption or use consisting in whole or in part of bee pollen and/or

bee propolis in any form.

B. ``Competent and reliable scientific evidence'' shall mean tests,

analyses, research, studies, or other evidence based on the expertise

of professionals in the relevant area, that has been conducted and

evaluated in an objective manner by persons qualified to do so, using

procedures generally accepted in the profession to yield accurate and

reliable results.

It is ordered that respondents Bee-Sweet, Inc., a corporation, its

successors and assigns, and its officer, Benny G. Morgan, individually

and as officer of said corporation, and respondents' agents,

representatives, and employees, directly or through any corporation,

subsidiary, division, or other device, in connection with the

manufacturing, labeling, packaging, advertising, promotion, offering

for sale, sale, or distribution of any bee pollen product in or

affecting commerce, as ``commerce'' is defined in the Federal Trade

Commission Act, do forthwith cease and desist from representing, in any

manner, directly or by implication, that:

A. Consumption of any bee pollen product is effective in the cure

or mitigation of: (1) Allergies, (2) arthritis, (3) anorexia, (4)

obesity, (5) fatigue, (6) arteriosclerosis, (7) anemia, (8) lack of

sexual stamina, (9) back pain, (10) digestive disorders, (11) pulse

irregularities, (12) acne, (13) bleeding, (14) burns, (15) colds, (16)

sore throats, (17) tonsillitis, (18) ulcers, or (19) urinary

infections.

B. Any bee pollen product is an effective antibiotic for human use.

II

It is further ordered that respondents Bee-Sweet, Inc., a

corporation, its successors and assigns, and its officer, Benny G.

Morgan, individually and as officer of said corporation, subsidiary,

division, or other device, in connection with manufacturing, labeling,

packaging, advertising, promotion, offering for sale, sale, or

distribution of any product or service for human consumption or use in

or affecting commerce, as ``commerce'' is defined in Federal Trade

Commission Act, do forthwith cease and desist from making any

representation, in any manner, directly or by implication, that any

such product or service for human consumption will have any effect on a

user's health or physical condition, unless at the time of making such

representation respondents possess and rely upon competent and reliable

scientific evidence that substantiates the representation.

III

It is further ordered that respondents Bee-Sweet, Inc., a

corporation, its successors and assigns, and its officer, Benny G.

Morgan, individually and as an officer of said corporation, and

respondents' agents, representatives, and employees, directly or

through any corporation, subsidiary, division, or other device, in

connection with the manufacturing, labeling, packaging, advertising,

promotion, offering for sale, sale, or distribution of any product or

service for human consumption or use in or affecting commerce, as

``commerce'' is defined in the Federal Trade Commission Act, do

forthwith cease and desist from misrepresenting, in any manner,

directly or by implication, to existence, contents, validity, results,

conclusions, or interpretations of any test or study.

IV

Nothing in this order shall prohibit respondents from making any

representation that is specifically permitted in labeling for any bee

pollen product by regulations promulgated by the Food and Drug

Administration pursuant to the Nutritional Labeling and Education Act

of 1990.

V

Nothing in this order shall prohibit respondents from making any

representation for any drug that is permitted in labeling for any such

drug under any tentative final or final standard promulgated by the

Food and Drug Administration, or under any new drug application

approved by the Food and Drug Administration.

VI

It is further ordered that respondents, or their successors and

assigns, within thirty (30) days of the date of service of this order,

shall send to each person or company that purchased for resale any bee

pollen product from any respondent during the twelve (12) month period

preceding the date of issuance of this order, a letter in the form set

forth in Appendix I hereto. Each such letter shall be sent via the

United States Postal Service, first class mail, postage pre-paid, to

the last known address of the intended recipient.

VII

It is further ordered that for three (3) years after the last date

of dissemination of any representation covered by this order,

respondents, or their successors and assigns, shall maintain and upon

request make available to the Federal Trade Commission for inspection

and copying:

A. All materials that were relied upon in disseminating such

representation; and

B. All tests, reports, studies, surveys, demonstrations, or other

evidence in their possession or control that contradict, qualify, or

call into question such representation, or the basis relied upon for

such representation, including complaints from consumers.

VIII

It is further ordered that:

A. Within thirty (30) days of the date of service of this order

respondents shall distribute a copy of this order to respondents'

officers, agents, representatives, and employees engaged in the

marketing or sale of any bee pollen product.

B. For a period of seven (7) years from the date of service of this

order respondents shall distribute a copy of this order to each of

respondents' officers, agents, representatives, and employees who

become engaged in the marketing or sale of any bee pollen product. Such

distribution shall be made within three (3) days of each such person's

becoming so engaged.

IX

It is further ordered that:

A. Respondents shall notify the Federal Trade Commission at least

thirty (30) days prior to any proposed change in the corporate

respondent such as dissolution, assignment, or sale resulting in the

emergence of a successor corporation, creation or dissolution of a

subsidiary, or any other change in the corporation that may affect

compliance obligations arising out of this order;

B. For seven (7) years from the date of service of this order,

Benny G. Morgan shall notify the Federal Trade Commission within thirty

(30) days of the discontinuance of his present business or employment

and of his new business or employment the activities of which include

the advertising, offering for sale, sale, or distribution of: (1) any

bee pollen product or (2) any product or service advertised, offered

for sale, sold, or distributed for effect on a user's health or

physical condition. Each such notice shall include Benny G. Morgan's

new business address and a statement of the nature of the business or

employment in which he is newly engaged as well as a description of his

duties and responsibilities in connection with the business or

employment.

X

It is further ordered that respondents shall, within sixty (60)

days of the date of service of this order, file with the Federal Trade

Commission a report, in writing, setting forth in detail the manner and

form in which they have complied with this order.

Appendix I

(To be Printed On Bee-Sweet, Inc. Letterhead)

[Date]

Dear Customer, We at Bee-Sweet have voluntarily entered into an

agreement with the Federal Trade Commission (``FTC''). We have

agreed to a cease and desist order under which we are writing to

each of our purchasers for resale of bee pollen products. The

purpose of this letter is to inform you that according to the FTC,

health claims previously made by Bee-Sweet for bee pollen products

are unsubstantiated by competent and reliable scientific evidence

and, according to the FTC, are false.

The FTC order requires that for any representation to be made

that a product or service will affect a user's health or physical

condition, we must have competent and reliable scientific evidence

that substantiates the representation. Bee-Sweet's promotional

literature must comply with these FTC requirements.

Sincerely, Benny G. Morgan, President, Bee-Sweet, Inc.

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted, subject to final

approval, an agreement to a proposed Consent Order from Bee-Sweet, Inc.

and its principal, Benny G. Morgan.

The proposed Consent Order has been placed on the public record for

sixty (60) days for receipt of comments by interested persons. Comments

received during this period will become part of the public record.

After sixty (60) days, the Commission will again review the agreement

and the comments received and will decide whether it should withdraw

from the agreement or make final the agreement's proposed order.

This matter concerns advertising for Bee-Sweet's bee pollen and bee

propolis products. The Commission's complaint charges that the

respondent's advertising contained false and unsubstantiated claims, in

violation of Sections 5 and 12 of the FTC Act.

In particular, the complaint alleges that the Bee-Sweet ads falsely

claim that bee pollen is effective in the mitigation or treatment of:

(1) Allergies, (2) arthritis, (3) anorexia, (4) obesity, (5) fatigue,

(6) arteriosclerosis, (7) anemia, (8) lack of sexual stamina, (9) back

pain, (10) digestive disorders, and (11) pulse irregularities. The

Complaint further alleges that the ads falsely claim that competent and

reliable scientific studies have proven that consumption of bee pollen

is effective in the mitigation and treatment of numerous diseases and

conditions, including: (1) Allergies, (2) athrities, (3) anorexia, (4)

obesity, (5) fatigue, and (6) arteriosclerosis.

The Complaint also alleges that the Bee-Sweet ads contain false

claims that bee propolis is effective in the mitigation or treatment

of: (1) Acne, (2) allergies, (3) bleeding, (4) burns, (5) colds, (6)

sore throats, (7) tonsillitis, (8) ulcers, and (9) urinary infections;

that bee propolis is an effective antibiotic for human use; and that

competent and reliable scientific studies have proven that consumption

of bee propolis is effective in the mitigation and treatment of ulcers.

The Complaint finally alleges that Bee-Sweet implied that it had a

reasonable basis for each of the above claims. According to the

Complaint, Bee-Sweet did not have a reasonable basis for making these

claims.

Paragraph I of the Order prohibits respondents from claiming that

consumption of any bee pollen product is effective in the mitigation or

treatment of the above conditions and ailments, or that any bee pollen

product is an effective antibiotic for human use.

Paragraph II of the Order prohibits Bee Sweet from representing

that a product or service will affect a user's health or physical

condition unless, at the time of making the representation, it has and

relies upon competent and reliable scientific evidence that

substantiates the representation.

Paragraph III of the Order requires respondents to cease and desist

from misrepresenting the existence, contents, validity, results,

conclusions, or interpretations of any test or study.

Paragraph IV of the Order provides that nothing in the order shall

prohibit respondents from making any representations specifically

permitted in labeling for any bee pollen product by regulations

promulgated by the Food and Drug Administration pursuant to the

Nutrition Labeling and Education Act of 1990.

Paragraph V of the Order provides that nothing in the order shall

prohibit respondents from making any representation for any drug that

is permitted in labeling for any such drug under any tentative final or

final standard promulgated by the Food and Drug Administration, or

under any new drug application approved by the Food and Drug

Administration.

Paragraph VI of the order requires respondents to send, to each

person or company that purchased respondent's bee pollen product for

resale within the twelve month period preceding the date of issuance of

the order, a notice regarding the FTC findings.

The remainder of the Order contains standard record-retention and

notification provisions.

The purpose of this analysis is to facilitate public comment on the

proposed Order. It is not intended to constitute an official

interpretation of the agreement and proposed Order or to modify in any

way their terms.

Donald S. Clark,

Secretary.

[FR Doc. 94-27569 Filed 11-7-94; 8:45 am]

BILLING CODE 6750-01-M