The Dannon Company, Inc.; Consent Agreement With Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 952-3391]

The Dannon Company, Inc.; Consent Agreement With Analysis To Aid

Public Comment

AGENCY: Federal Trade Commission.

ACTION: 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 the Tarrytown, NY-based frozen yogurt manufacturer from

misrepresenting the fat, calories, saturated fat, or cholesterol in any

of its frozen yogurt products. The consent agreement settles

allegations stemming from nutritional claims made in advertisements for

Dannon's line of Pure Indulgence frozen yogurt.

DATES: Comments must be received on or before February 12, 1996.

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

Room 159, 6th St., and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Justin Dingfelder, Bureau of Consumer

Protection, Federal Trade Commission, S-4631, 6th Street & Pennsylvania

Ave., NW., Washington, DC 20580, (202) 326-3017.

Peter Metrinko, Bureau of Consumer Protection, Federal Trade

Commission, S-4624, 6th Street & Pennsylvania Ave., N.W., Washington,

DC 20580, (202) 326-2104.

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)).

United States of America Before Federal Trade Commission

In the Matter of The Dannon Company, Inc., a corporation .

[File No. 952-3391.]

Agreement Containing Consent Order To Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of The Dannon Company, Inc., hereinafter

sometimes referred to as proposed respondent, and it now appearing that

proposed respondent is willing to enter into an agreement containing an

Order to cease and desist from the use of the acts and practices being

investigated,

It is hereby agreed by and between The Dannon Company, Inc., by

this duly authorized officer and attorneys, and counsel for the Federal

Trade Commission, that:

1. Proposed respondent The Dannon Company, Inc., is a corporation

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

of the State of Delaware, with its office and principal place of

business located at 120 White Plains Road, Tarrytown, NY 10591.

2. Proposed respondent admits all the jurisdictional facts set

forth in the draft complaint here attached.

3. Proposed respondent waives:

a. Any further procedural steps;

b. the requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law;

c. all rights to seek judicial review or otherwise to challenge or

contest the validity of the Order entered pursuant to this agreement;

and

d. any claim under the Equal Access to Justice Act.

4. 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 draft

complaint contemplated thereby, 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.

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

constitute an admission by proposed respondent that the law has been

violated as alleged in the attached draft complaint, or that the facts

as alleged in the attached draft complaint, other than the

jurisdictional facts, are true.

6. 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. 234 of the Commission's

Rules, the Commission may, without further notice to proposed

respondent: (1) Issue its complaint corresponding in form and substance

with the draft complaint attached hereto 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. Delivery by

the Postal Service of the complaint and decision containing the agreed-

to Order to proposed respondent's address as stated in this agreement

shall constitute service. Proposed respondent waives any right it may

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 the

agreement

[[Page 63716]]

may be used to vary or contradict the terms of the Order.

7. Proposed respondent has read the proposed complaint and Order

contemplated hereby. It understands that once the Order has been

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

showing that it has fully complied with the Order. Proposed respondent

further understands that it may be liable for civil penalties in the

amount provided by law for each violation of the Order after it becomes

final.

Order

I

It is ordered that respondent The Dannon Company, Inc., a

corporation, its successors and assigns, and its officers, agents,

representatives, and employees, directly or through any partnership,

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

the manufacture, advertising, packaging, labeling, promotion, offering

for sale, sale or distribution of any frozen food product, 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, through numerical or

descriptive terms or any other means, the existence or amount of fat,

saturated fat, cholesterol or calories in any such product. If any

representation covered by this Part either directly or by implication

conveys any nutrient content claim defined (for purposes of labeling)

by any regulation promulgated by the Food and Drug Administration,

compliance with this Part shall be governed by the qualifying amount

for such defined claim as set forth in that regulation.

II

Nothing in this Order shall prohibit respondent from making any

representation that is specifically permitted in labeling for any such

product in regulations promulgated by the Food and Drug Administration

pursuant to the Nutrition Labeling and Education Act of 1990.

III

It is further ordered that respondent, its successors and assigns,

shall pay to the Federal Trade Commission, by cashier's check or

certified check made payable to the U.S. Treasury and delivered to the

Associate Director for Enforcement, Bureau of Consumer Protection,

Federal Trade Commission, 6th and Pennsylvania Ave., NW, Washington, DC

20580, the sum of $150,000. Respondent shall make this payment on or

before the tenth day following the date of entry of this Order. In the

event of any default on any obligation to make payment under this

section, interest, computed pursuant to 28 U.S.C. 1961(a), shall accrue

from the date of default to the date of payment.

IV

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

of dissemination of any representation covered by this Order,

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

request make available to the Federal Trade Commission for inspection

and copying:

1. All labeling, packaging, advertisements and promotional

materials setting forth any representation covered by this Order;

2. All materials that were relied upon to substantiate any

representation covered by this Order; and

3. All test reports, studies, surveys, demonstrations or other

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

call into question such representation or the basis upon which

respondent relied for such representation, including complaints from

consumers.

V

It is further ordered that respondent shall notify the Federal

Trade Commission at least thirty (30) days prior to any proposed change

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

the emergence of a successor corporation, the creation or dissolution

of subsidiaries or any other change in the corporation which may affect

compliance obligations arising out of this Order.

VI

It is further ordered that respondent shall, within thirty days

after service of this Order, distribute a copy of this Order to each of

its operating divisions, and to each of its officers, agents,

representatives, or employees engaged in the preparation or placement

of advertisements, promotional materials, product labels or other

materials covered by this Order.

VII

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

after service of this Order, file with the Commission a report, in

writing, setting forth in detail the manner and form in which it has

complied or intends to comply with this Order.

VIII

It is further ordered that this order will terminate twenty years

from the date of its issuance, or twenty years from the most recent

date that the United States or the Federal Trade Commission files a

complaint (with or without an accompanying consent decree) in federal

court alleging any violation of the order, whichever comes later;

provided, however, that the filing of such a complaint will not affect

the duration of:

A. Any paragraph in this order that terminates in less than twenty

years;

B. This order's application to any respondent that is not named as

a defendant in such complaint; and

C. This order if such complaint is filed after the order has

terminated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a federal

court rules that the respondent did not violate any provision of the

order, and the dismissal or ruling is either not appealed or upheld on

appeal, then the order will terminate according to this paragraph as

though the complaint was never filed, except that the order will not

terminate between the date such complaint is filed and the later of the

deadline for appealing such dismissal or ruling and the date such

dismissal or ruling is upheld on appeal.

Benjamin I. Berman,

Acting Secretary.

Analysis of Proposed Consent Order to Aid Public Comment

The Federal Trade Commission has accepted an agreement to a

proposed consent order from The Dannon Co., Inc., (``respondent'' or

``Dannon'').

The proposed consent order has been placed on the public record for

sixty (60) days for receipt of public 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 claims made by Dannon in its advertising for

Pure Indulgence frozen yogurt.

The Commission's complaint in this matter charges Dannon with

engaging in deceptive and unfair acts or practices in connection with

the advertising of Pure Indulgence. The complaint alleges that

respondents manufactured, advertised, offered for sale, sold or

distributed a frozen yogurt sold under the name ``Pure Indulgence,''

which it represented

[[Page 63717]]

was low in fat, low in calories, and lower in fat than ice cream. At

the serving size for frozen yogurt commonly consumed, Pure Indulgence

was not low in fat or low in calories. Further, Pure Indulgence was not

lower in fat than many ice creams.

The Commission's complaint alleges that the above representations

for certain flavors of Pure Indulgence, at the time the advertising was

disseminated, were false and misleading.

The consent order contains provisions designed to remedy the

violations charged and to prevent Dannon from engaging in similar

deceptive and unfair acts in the future.

Part I of the Commission's order prohibits respondent, in

connection with the manufacture, advertising, packaging, labeling,

promotion, offering for sale, sale or distribution of any frozen food

product, from misrepresenting, in any manner, directly or by

implication, through numerical or descriptive terms or any other means,

the existence or amount of fat, saturated fat, cholesterol or calories

in any such product. However, if any representation covered by this

Part either directly or by implication conveys any nutrient content

claim defined (for purposes of labeling) by any regulation promulgated

by the Food and Drug Administration, compliance with this Part shall be

governed by the qualifying amount for such defined claim as set forth

in that regulation.

Part II of the order provides that nothing in the order shall

prohibit respondent from making any representation that is specifically

permitted in labeling for any such product in regulations promulgated

by the Food and Drug Administration pursuant to the Nutrition Labeling

and Education Act of 1990.

Under the terms of Part III of the order, respondents shall pay

$150,000.00 to the U.S. Treasury.

Part IV of the order requires Dannon to maintain copies of all

materials relating to advertisements covered by the order and all

documents relating to substantiation of advertising claims covered by

the order.

Part V requires Dannon to notify the Commission of any changes in

corporate structure that might affect compliance with the order.

Part VI requires Dannon to distribute copies of the order to

certain company officials and employees and certain other

representatives and agents of Dannon.

Part VII requires Dannon to file with the Commission a report

detailing compliance with the order.

Part VIII provides for termination of the order twenty years from

the date of issuance.

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

proposed order, and it is not intended to constitute an official

interpretation of the agreement and proposed order or to modify any of

their terms.

[FR Doc. 95-30215 Filed 12-11-95; 8:45 am]

BILLING CODE 6750-01-M