The Federal Trade Commission says POM Wonderful LLC, its parent company Roll International Corp., its creators and an executive violated federal law by making false and deceptive claims about disease prevention and treatment.
The agency’s complaint names POM Wonderful President Matthew Tupper and company founders Stewart and Lynda Resnick, a billionaire California couple whose holdings also include florist retailer Teleflora, Fiji Water and companies that produce Wonderful Pistachios and Cuties clementines.
POM Wonderful said in a statement it disagrees with the FTC and its results have been encouraging. It said it has a right to share its research as it becomes available, especially because its food products do not have risks associated with pharmaceuticals.
“It’s a shame that the government is unable to understand this fundamental distinction, and instead is wasting taxpayer resources to persecute the pomegranate,” the Los Angeles-based company said.
The company’s statement did not offer specifics about the results of its research.
POM Wonderful is seen as starting the pomegranate craze that has spread to everything from tea to smoothies, hitting ice cream, martinis and salad dressings on the way. The company’s health claims are a hallmark of its advertising and a way to get people to pay more for the products than they would for others. POM Wonderful costs $3.99 for a 16-ounce bottle, while a one-month supply of POMx pills and liquid extract – sold by direct mail – costs $30.
The industry seems to be hurting in the economic downturn. Pomegranate juice sales reached $3.73 billion at retailers excluding Wal-Mart in the year ending Sept. 4, a drop of nearly half from the prior year, according to market research firm Spins Inc. In 2007, the market reached $11.78 billion.
POM spent $12.1 million on advertising last year, a rise of 26 percent from the prior year, according to Kantar Media.
POM Wonderful says on its website that it has spent more than $34 million to support scientific research on POM products since 1998. Study topics include muscle recovery, diabetes, antioxidant potency, heart disease, prostate cancer and erectile dysfunction.
Regulators said the ads were misleading in saying the research shows the juice or related pomegranate supplements prevent or treat certain diseases.
“Any consumer who sees POM Wonderful products as a silver bullet against disease has been misled,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. He said companies using scientific research in their advertising must have research that supports the claims.
The complaint asks that future claims about pomegranate-based products comply with Food and Drug Administration regulations, though that has not typically been required for compliance with trade laws. Having the FDA approve claims would give the company more guidance, the FTC said.
The company sued the FTC two weeks ago, hoping to have a judge declare the agency’s new advertising standards invalid. POM said in the complaint it filed in federal district court that the FTC was violating the company’s right to free speech and imposing an “undue hardship … by suddenly changing direction in the criteria it uses to evaluate deceptive advertising.”
POM questioned the FTC’s requirement that advertisers get approval from the FDA before making certain health claims about food, drinks or dietary supplements. The FTC said it has no comment on that lawsuit.
FTC complaints are not a conclusion or ruling that the law has been violated. The FTC will hold a hearing within eight months before an administrative law judge.
The FTC cited advertisements in national publications including The New York Times and Prevention, on Internet sites run by the company including pomwonderful.com and pompills.com, and elsewhere. Regulators question the scientific methods used and said some studies cited did not show POM Juice to be effective against the diseases.
The claims in POM ads that the FTC cites include:
_ “New research offers further proof of the heart-healthy benefits of POM wonderful juice. 30 percent decrease in arterial plaque … 17 percent improved blood flow … promotes healthy blood vessels….”
_ “Clinical studies prove that POM Juice and POMx prevent, reduce the risk of, and treat prostate cancer, including by prolonging prostate-specific antigen doubling time.”
_ “You have a 50 percent chance of getting (prostate cancer). Listen to me. It is the one thing that will keep your (prostate-specific antigens) normal. You have to drink pomegranate juice. There is nothing else we know of that will keep your PSA in check…. It’s also 40 percent as effective as Viagra.”
The agency also wants to prevent POM and its parents, founders and the executive “from making any other health claim about any food, drug, or dietary supplement without competent and reliable scientific evidence.”
The FTC said it reached a settlement in a related case with Mark Dreher, the former head of scientific research and regulatory affairs for POM Wonderful. He has agreed to a settlement that bars him from making any disease treatment or prevention claims in POM Wonderful advertising unless the claim is backed up.
Dreher also must not make health claims for other products without scientific evidence.
Such settlements do not mean there has been an admission of violating the law, the FTC said.