Carnation to Pay $90,000 Fine in Wake of Claims Its Ads Misled

Carnation Co. said Thursday that it had agreed to pay a total of $90,000 to nine states--including California--to settle allegations that it used misleading advertising to promote its new infant formula as unlikely to trigger allergies.

Los Angeles-based Carnation, without admitting any wrongdoing, also agreed to drop the word hypoallergenic from the labels of its Good Start formula product, which was introduced last November. The $90,000 will go toward paying the costs of the states’ investigations.

In February, Carnation, a subsidiary of Nestle, had previously announced that it was planning to drop the hypoallergenic claim from its product. The company also said it was aware of six medical reports of adverse reaction by infants who were fed Good Start.

Pediatricians groups have voiced their concerns about formulas labeled hypoallergenic. They say the products, which reduce but do not eliminate the potential for causing allergic reaction from cow’s milk, may mislead many mothers into believing the formulas are allergen-free.

Could Violate Consumer Laws

The attorneys general said Good Start ads could violate the consumer protection advertising laws in their states because the product was promoted as a hypoallergenic formula that “effectively resolved the symptoms in infants suffering from formula intolerance or milk allergy.” California Deputy Atty. Gen. Albert N. Shelden said the state’s investigation, which was part of a broader look at the health claims of food makers, also found that physicians who traveled on a company-sponsored media tour claimed that Good Start could not trigger an allergic reaction. The physicians also did not disclose that Carnation was paying for their travel expenses.

Carnation president, Timm F. Crull, said in a statement, “We are convinced that the characterizations made by the attorneys general in the settlement are not supported by the facts. However, solely in order to avoid the time and expense that contesting these characterizations would require, Carnation has entered into this agreement.”

The controversy caused by Carnation’s hypoallergenic claims have triggered a U.S. Food and Drug Administration investigation into similar formula products.

Looking Into Other Claims

Earlier this year, the FDA asked Carnation, Bristol Myers, maker of Nutramigen and Pregestimil, and Ross Laboratories, maker of Alimentum, to submit information supporting their hypoallergenic claims.

“We are still looking at the claims that are being made by these three companies,” said FDA spokesman Emil Corwin on Thursday.

Neither Bristol Myers nor Abbott Laboratories has altered the labeling of their products. “We have continued to label our product with the hypoallergenic claim,” said Ross spokesman Cathy Babington.

The other states involved in the settlement include Wisconsin, Illinois, Iowa, Massachusetts, Minnesota, Missouri, New York and Texas.