The Dannon Co., the US unit of French food giant Danone, has decided to settle a 2008 lawsuit over the advertising of its Activia and DanActive yoghurts.

Dannon said on Friday (18 September) that it would set up a "fund" worth US$35m to reimburse consumers who had bought the brands, which formed the centre of the suit brought against the company last year. The lawsuit had accused Dannon of using false advertising to promote the yoghurts.

Under the settlement, Dannon will change the labeling and marketing of Activia and DanActive to "increase the visibility of the scientific names of the unique strains of probiotics that are in each of these products", the firm said.

Dannon's Michael Neuwirth added: "The decision to settle this case is based on the company's desire to avoid the distraction and expense of litigation and to quickly resume 100% focus on making products that provide proven health benefits to millions of highly satisfied consumers. This resolves the plaintiff's concerns while affirming the essence of the claims of Activia and DanActive, which are substantiated by years of scientific research."