Eggland's Best Settles FTC Charges over
Allegedly Deceptive Cholesterol Claims

FTC News Release
February 10, 1994

Eggland's Best, Inc. has agreed to settle Federal Trade Commission charges that its advertising and promotional materials deceptively represented that Eggland's eggs will not increase consumers' serum (blood) cholesterol, and that they are superior to regular eggs in this respect. Eggland's has agreed, under the settlement, not to misrepresent the amount of nutrients or other ingredients in its eggs or foods containing egg yolks, to have scientific substantiation to support future health-benefit claims for such foods and, for one year, to label certain egg packages with a corrective notice stating that no studies show Eggland's eggs are different from other eggs in their effect on serum cholesterol.

Eggland's is located in King of Prussia, PA. The FTC complaint, which details the charges, cites several statements found in Eggland's national print and broadcast advertisements. These ads included statements such as:

As sources for these and other statements, the ads refer to certain clinical studies. According to the FTC complaint, however, Eggland's falsely represented that the studies prove that adding 12 Eggland's Best eggs per week to a low-fat diet will not increase serum cholesterol. In addition, the FTC alleged that Eggland's failed to substantiate representations that its eggs will not increase serum cholesterol and that they are superior to ordinary eggs in their effect on serum cholesterol. Finally, the FTC alleged as false Eggland's representations that its eggs are low in saturated fat, and also superior to ordinary eggs in this respect.

The proposed consent agreement to settle these allegations would require Eggland's to clearly and prominently place on certain egg packages the statement:

"There are no studies showing that these eggs are different from other eggs in their effect on serum cholesterol."

The statement would have to be included for one year on packages of eggs being sold in every area where the advertising challenged by the FTC ran for at least 12 weeks, or where it ran for any length of time between Jan. 1, 1993 and Feb. 1, 1994.

The settlement also contains several provisions that would apply to the company's future marketing of eggs or any food containing egg yolks. Specifically, the proposed settlement would prohibit Eggland's from misrepresenting the amount of cholesterol, total fat, saturated fat or any other nutrient or ingredient in such foods. Further, the proposed order would prohibit Eggland's from making any claim not substantiated by competent and reliable scientific evidence about the effect of such products on serum cholesterol. Competent and reliable scientific evidence also would be required to support any claims Eggland's makes about the health benefits of such foods, including their effect on heart disease.

In addition, whenever Eggland's makes future advertising claims about the cholesterol, fat, or saturated fat content of any such food, it would have to disclose the average cholesterol content of the food in milligrams and as a percentage of the Maximum Daily Value for cholesterol established by the Food and Drug Administration (FDA) or in absence of an effective final FDA regulation the daily intake limit of cholesterol advised by the National Academy of Sciences, the Surgeon General of the Public Service or the American Heart Association. The settlement also contains provisions designed to ensure that these disclosures would be clear and prominent.

Notwithstanding the above restrictions, the settlement would allow Eggland's to make claims that specifically are permitted in labeling under regulations promulgated by the FDA pursuant to the Nutrition Labeling and Education Act of 1990.

A final provision in the proposed settlement would prohibit Eggland's from misrepresenting the results of any test or study about any food it sells in the future.

On Dec. 3, 1993, the National Advertising Review Board (NARB) referred its case records to the Commission, citing Eggland's refusal to comply with the NARB review panel findings.

The Commission vote to announce the proposed consent agreement for public comment was 4-1, with Commissioner Deborah K. Owen concurring in part, and dissenting in part, and Commissioners Mary L. Azcuenaga, Roscoe B. Starek III and Dennis A. Yao issuing separate statements.

In a separate statement, Commissioner Mary L. Azcuenaga agrees that there is reason to believe that Eggland's Best made deceptive advertising claims and joins in approving the order except for the paragraph that contains corrective advertising provisions. In imposing a corrective advertising remedy, Azcuenaga said, the Commission must consider whether advertising has played a substantial role in creating in the public's mind a false belief about a product that will linger on after the false advertisement ceases. In this case, she said, there is no direct evidence that Eggland's Best's ads created a lingering false impression about the effects on serum cholesterol of its eggs. She also noted that because Eggland's Best's advertisements had run for a relatively short period of time, it was unlikely that such a lingering false impression had been created. "Without a stronger showing of the need for corrective advertising under [the relevant legal standard]," Azcuenaga said, "I cannot support including a corrective advertising provision in the proposed order."

In her separate statement, Commissioner Deborah K. Owen said that she concurred in the decision to issue a complaint, and to provisionally accept a consent agreement, but dissented with respect to the required corrective advertising. She concluded that the Eggland's case did not meet the classic Warner-Lambert test for two reasons. First, in contrast to Warner-Lambert, where the claims were made for decades and swamped both print and network primetime media, Commissioner Owen noted that there was "no evidence that Eggland's campaign was so similarly saturated and extended that long after it ceases, a substantial portion of the public will continue to believe the challenged claims in the absence of the corrective advertising that the Commisssion has provisionally accepted." Second, she observed that in the Eggland case, unlike Warner-Lambert, the public has been exposed to a "barrage of contrary information. … Because the information that eating eggs is likely to increase serum cholesterol will continue to be widely disseminated to consumers through media sources, it is unlikely that the false beliefs regarding the effects of Eggland's Best eggs on serum cholesterol, or their comparative benefits to other eggs, will be maintained. In sum, the half-life of Eggland's advertising campaign is probably very short." With respect to the remedy itself, while requiring corrective advertising on the carton label may have been a well intentioned effort to limit the remedy, Owen found it nonetheless "highly ironic that [it] has been mandated in a medium where the original deceptive claims were never made." Owen concluded that corrective advertising might be appropriately required in other cases as a function of "well defined and implemented policy," rather than of "respondents' willingness to agree to the remedy."

In a separate statement, Commissioner Roscoe B. Starek III said he has reluctantly decided to support the corrective advertising provision of the order. "I have determined that a limited corrective advertising requirement is an appropriate remedy here," Starek said. "[W]e have strong evidence that the company's ads have been successful in creating in the minds of their consumers a belief that their eggs are meaningfully superior to other eggs," according to Starek. Starek stated that he also was persuaded by the careful crafting of the corrective remedy, which would not be unreasonably costly, and is designed to reach consumers who are preparing to purchase Eggland's product instead of the population at large.

In a separate statement, Commissioner Dennis A. Yao, supporting the terms of the consent agreement, said that he would have preferred that the complaint include an implied heart disease allegation. Although the proposed order does include a requirement that health claims, including claims about heart disease, be substantiated by competent and reliable scientific evidence, Yao said that he believes that the industry and the public would best be served if the Commission communicated its belief that an implied health claim has been made.

The FTC has published a consumer fact sheet titled "Food Advertising Claims" that discusses several common health-related claims and offers advice to consumers for analyzing them. The FTC fact sheet notes that too much cholesterol in a diet has been associated with health risks and reminds consumers that the Surgeon General has advised that fat intake be kept to no more than 30 percent of daily calories.

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