Recently, I looked at the largest software piracy verdict ever. Now, I bring you the biggest attorney general consumer protection multi-state settlement ever reached with a food producer. Attorney generals from multiple states sued The Dannon Company, an American yogurt company that develops and markets dairy products in the United States. It is a subsidiary of Danone, which was was ranked best in class in a 2008 JPMorgan & Insight Investment study about the response of the world’s largest food companies to obesity and health-related concerns.
Some of its health claims seem to have been a little off, though. Dannon will pay $21 million to 39 states based on the Federal Trade Commission’s finding that the company did not have enough evidence to back up its claims that Activia yogurt and DanActive have beneficial bacteria which help relieve irregularity and help people fight off catching colds or the flu.
The moral of the story is that business owners need to be very careful about the message they spread to consumers. Be specific and do not stretch the truth, if you want to protect yourself from potentially having to pay out large sums for failing to provide accurate information about your products.