September 1st, 2010

FTC Subpoenas 48 Food Companies Regarding Marketing to Kids

By Rich Thomaselli
Advertising Age

Follow-up to 2008 Report Unlikely to Lead to More Regulation

The Federal Trade Commission is once again handing out subpoenas to companies that market food to children and teens.

Three years after initially delivering what is technically known as “orders to file special report” to 44 marketers, the FTC last week began sending subpoenas to 48 companies in order to prepare a follow-up to its 120-page report issued in 2008, “Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities and Self-Regulation.”

“This is a follow-up to measure the effects that self-regulation has had over the last three years,” said Carol Jennings, spokeswoman for the FTC’s Division of Advertising Practices/Bureau of Consumer Protection. “We are supportive of industry voluntary efforts to limit their marketing to kids and this will see whether more is needed.”

Ms. Jennings said the findings will be made available to the public.

A handful of marketers that received subpoenas in 2007 were left off the 2010 list, presumably because they have limited their marketing to children. Twelve companies on this year’s list are new, but 36 companies are once again receiving subpoenas—including Yum Brands, which was called out by FTC Chairman Jon Leibowitz in a December 2009 speech in which he said, “Many companies that market heavily to children and teens have yet to join or make a commitment. Why, for instance, hasn’t Yum Brands, with its KFC, Taco Bell, and Pizza Hut chains, stepped up? Or Chuck E. Cheese and IHOP? Or the marketers of Air Heads and Baby Bottle Pops?”

Calls to Yum Brands were not returned. A spokeswoman for CEC Entertainment, parent company of Chuck E. Cheese, said she could not comment without having seen the subpoena.

Some have speculated that the new round of subpoenas was a prelude to Congressional hearings and possible legislation, but Ms. Jennings refuted that.

“We are not proposing any regulation,” she said.

Anthony DiResta, an attorney specializing in advertising, marketing and media at Washington firm Manatt Phelps & Phillip, agreed with Ms. Jennings and said he did not see legislation in the future.

“Given the current political climate and the way the polls are suggesting Congress may change after November, I don’t see it happening,” he said. “In order for Congress to hold hearings or empower the FTC to do anything close to rule-making, that would require a very, very progressive and activist legislative effort. I just don’t think right now that’s in the winds.”

But Mr. DiResta, a former director of the FTC’s Southeast Regional Office, did say that marketing food products to children very much remains on the FTC’s radar.

“The FTC sees marketing to children as a high priority,” he said. “They see children as a vulnerable group that warrants special protection, just as they did the elderly. Given the new technological developments, like iPhones and location-based marketing, they see the emerging technologies can really have an impact on kids.”

While some marketers still have questions about where this will lead, the American Association of Advertising Agencies said it is not concerned that any limitations on marketing could mean diminished revenue for ad agencies.

“We share the advertisers’ commitment to do right by the children of America,” said Dick O’Brien, VP-government relations for the 4A’s. “That trumps any short-term economic considerations.”

MARKETERS RECEIVING 2010 FTC SUBPOENAS

(marketers in bold did not receive a similar subpoena in 2007)
Boskovich Farms
Burger King Holdings
California Giant
Campbell Soup Co.
CEC Entertainment
Chiquita Brands International
The Coca-Cola Co.
Coca-Cola Bottling Co.
Coca-Cola Enterprises
ConAgra Foods
Dairy Management
Danone Foods
Del Monte Fresh Produce
Doctor’s Associates
Dole Food Co.
Dr. Pepper Snapple Group
Dunkin’ Brands
General Mills
Grimmway Enterprises
Hansen Natural Corp.
The Hershey Co.
Hinkle Produce
Hostess Brands
Imagination Farms
Kellogg Co.
Kraft Foods
LGS Specialty Sales
Mars, Incorporated
McDonald’s Corp.
McKee Foods Corp.
National Fluid Milk Processor Promotion Board
Nestlé USA
PepsiCo
Perfetti Van Melle USA
The Procter & Gamble Company
Ralcorp Holdings
Ready Pac Produce
Red Bull North America
Rockstar
Sonic Corporation
Stemilt Growers
Summeripe Worldwide
Sunkist Growers
Sunny Delight Beverages Co.
The Topps Co.
Unilever United States
Wendy’s/Arby’s Group
Yum Brands

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