The Kellogg Company is in hot water, or perhaps, milk. They have reached a settlement with the Federal Trade Commission after claiming that Kellogg's Rice Krispies "helps support your child's immunity," with "antioxidants and nutrients that your family needs to help them stay healthy." The cereal maker, famous for popular commercial jingles such as "Snap Crackle Pop," had printed claims on their boxes indicating that their cereal was especially healthy. The FTC found that these claims were unsubstantiated.
This comes after Kellogg was fined by the FTC for claiming that Frosted Mini-Wheats had been clinically shown to improve kids' attentiveness by nearly 20%. The FTC has now prohibited Kellogg from making claims about any health benefit of any food unless the claims are backed by scientific evidence and not misleading.
After the Mini-Wheats incident, Kellogg promised not to make "claims about the benefits to cognitive health, process, or function provided by any cereal or any morning food or snack food unless the claims were true and substantiated." But the FTC says that less than a year later, Kellogg was making unsubstantiated claims about its cereal yet again. "We expect more from a great American company than making dubious claims not once, but twice that its cereals improve children's health," said FTC Chairman, Jon Leibowitz, in a press release, Thursday.
The FTC Commission voted 5-0 to modify the 2009 Mini-Wheats settlement. "As a trusted, long-established company with a presence in millions of American homes, Kellogg must not shirk its responsibility to do the right thing when it advertises the food we feed our children," said FTC Commissioner Julie Brill and Chairman Jon Leibowitz in a separate statement.
In the end, the settlement amounts to a slap on the wrist for a company the size of Kellogg, with a market cap of over $20 billion. The settlement does not constitute an admission of a law violation. When the Federal Trade Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.