Kellogg Co. has agreed to pay $5 million to settle a class action lawsuit over claims made about the company’s Rice Krispies cereal.
The federal suit alleged that Kellogg falsely claimed the cereal boosts children’s immune systems. The company settled with the Federal Trade Commission over similar claims in June 2010.
In the summer of 2009, Kellogg launched a new ad campaign for Rice Krispies, which included product packaging claiming the cereal “Now helps support your child’s immunity” and that “Kellogg’s Rice Krispies has been improved to include antioxidants and nutrients that your family needs to help them stay healthy.”
Kellogg used the claims for just six months before being challenged by the Oregon attorney general. It settled with the AG, agreeing to destroy 2 million units of packaging and donating the cereal to charity organizations. The FTC then took action, and a number of private suits followed, which were consolidated into one class action in California federal court. The plaintiffs claimed that Kellogg did not have a clinical study that adequately supports its claims and that it failed to adequately disclose whether the inclusion of sugar and high fructose corn syrup negates or otherwise decreases any health and immunity benefits.
Under the terms of the class action settlement, Kellogg admitted no fault, but agreed to pay consumers $2.5 million (between $5 and $15 per consumer) and to donate $2.5 million worth of Kellogg products to charity. The company also agreed to discontinue making claims of immunity benefits unless it has competent and reliable scientific evidence to support the claims.
To read the settlement agreement in Weeks v. Kellogg, click here.
Why it matters: Will this settlement end Kellogg’s legal woes? In addition to facing litigation over its Rice Krispies claims, the company recently reached a $10.5 million settlement over attention-boosting claims made about its Frosted Mini-Wheats – claims that it had already settled with the FTC. Under the terms of its amended FTC consent order, Kellogg is now prohibited from making claims about any health benefit of any of its food products, unless the claims are backed by scientific evidence and are not misleading.