Dannon pays millions over false yogurt claims

The company that makes Activia yogurt and DanActive dairy drink will have to cough up $56 million US to settle a deceptive advertising charge and class-action suit related to the two products.

The products contain beneficial bacteria called probiotics. But both the Federal Trade Commission, and a U.S. District Court found that the probiotics in Dannon's products were not beneficial enough for the company to claim that they would prevent colds or flu, nor relieve irregularity.

While Dannon's ads said the benefits of its products were scientifically proven, the FTC found that Dannon's claims were scientifically proven to be false.

"These types of misleading claims are enough to give consumers indigestion," said FTC chairman Jon Leibowitz.

'These types of misleading claims are enough to give consumers indigestion.' —Jon Leibowitz, Federal Trade Commission

"Consumers want, and are entitled to, accurate information when it comes to their health. Companies like Dannon shouldn't exaggerate the strength of scientific support for their products."

In order to settle the misleading advertising charge Dannon agreed to pay $21 million to the U.S. government.

It's also prohibited from claiming that any yogurt, dairy drink or probiotic food or drink reduces the likelihood of getting a cold or the flu. It can't claim that Activia yogurt will relieve irregularity, nor can it say that its products will slow intestinal transit time unless it can produce two well-designed human clinical studies that support those claims.

Dannon is also prohibited from misrepresenting the results of any studies or clinical trials.

In the case of the class-action suit, Dannon will pay $35 million into a fund that will be used to pay people who purchased its products based on the false claims. Much of the money will also go to pay legal fees associated with the suit. Any money that is left over will go towards helping feed the hungry.