In a case of first impression, the National Advertising Division reviewed the use of the “fair trade” seal by TransFair, the licensor of the Fair Trade seal in the United States, as well as Avon Products “mark.” body product line use, a licensee of the seal.

Both cases were brought by challenger Dr. Bronner’s Magic Soaps, a maker of personal care items. In the TransFair case, the NAD analyzed whether the “Fair Trade” single-ingredient seal was identical to its whole-product seal. The NAD also reviewed whether TransFair and its licensees typically market an entire product line as Fair Trade Certified even though the products are required to contain only 2 to 5 percent fair trade ingredients in order to display one of the seals.

While the NAD said the single ingredient and whole-product seals are similar in appearance, it determined that there was little potential for consumers to view the two seals side by side and confuse them.

However, the NAD determined that authorized TransFair statements such as “By choosing this Fair Trade Certified product, you are directly supporting a better life for farming families through fair prices, direct trade, community development, and environmental stewardship,” and “Fair Trade Certification means our collection helps farmers around the globe help themselves by investing in their farms and communities, encouraging the development of business skills and mandating environmentally sustainable farming methods. After all, what’s fair is fair,” conveyed an inaccurate message regarding the degree to which licensed products are “Fair Trade” products.

TransFair’s statements should be modified to make it “clear to consumers that 1) the seal represents fair trade certification of ingredients, or that the product is using some ‘Fair Trade Certified Ingredients’; and 2) personal care products need only contain 2-5 percent fair trade certified ingredients in order to bear one of the two composite product seals,” the NAD said.

In the second case, the NAD turned to the use of TransFair seals on Avon’s “mark.” product line.

The NAD noted that Avon’s use of the TransFair seals should be adjusted by its TransFair decision, but it also determined that Avon should modify its print and Internet advertisements. Avon included photos of farm workers and headings like “I [heart] making a DIFFERENCE” and “Help change the world with four of the best body care products on earth,” for products targeted primarily to young women, the NAD noted.

“The print and Internet advertisements send a much stronger ‘Fair Trade’ ingredient content message than the mark. product packaging,” the NAD said, recommending that Avon discontinue its use of photographs and headings that state the impact its products have on the fair trade movement.

Noting that print and Internet advertising provide sufficient space to fully educate consumers about the fair trade content of its products and their impact on enhancing fair trade practices, the NAD said that Avon should “provide consumers with all of the information regarding the products’ impact on fair trade so that consumers can make an informed purchase decision.”

To read the NAD’s press release about the decisions, click here.

Why it matters: The NAD said the issues in the case were a matter of first impression, but noted that in recent years it has “observed a dramatic rise in environmental and social impact advertising claims in the marketplace. Because customers cannot easily verify for themselves whether social impact claims, such as ‘Fair Trade Certified,’ are truthful or meaningful, purchasers often rely on advertising, including certification marks, to determine what public interest benefits the products offer. As a result, advertising self-regulation plays an important role in helping to ensure the truth and accuracy of such claims.”