New Zealand-based A2 Milk Co. is to see advertising claims it has made in the US referred to the country’s Federal Trade Commission.
The National Advertising Division (NAD), which looks into claims under the US advertising industry’s system of self-regulation, sent A2 Milk Co.’s claims on its A2 Milk product, including assertions the milk is “easier on digestion” and “may help some avoid discomfort” to the FTC for further investigation.
In a statement issued by the Council of Better Business Bureaus, which administers the NAD, said A2 Milk Co.’s claims were initially challenged by US dairy trade body The National Milk Producers Federation (NMPF).
The NMPF maintained A2 Milk Co. “falsely promises consumers that its product is ‘easier on digestion’ as compared to conventional milk and that consumers can ‘avoid digestive discomfort’ and will ‘feel the difference’, the statement read.
The federation “also stated that A2 Milk Co. falsely claims that conventional milk is likely to induce ‘painful bloating, wind, cramps, [gut] inflammation’ and other uncomfortable symptoms”.
The statement said the NAD had passed the matter to the FTC after A2 Milk Co. “declined to participate in a review of its advertising claims”.
Formed in 2000, A2 Milk Co. has built a growing business in New Zealand and in select international markets – including the US – supplying dairy and infant-formula products that do not contain the A1 protein it claims causes discomfort.
The NAD said the NMPF had argued that A2 Milk Co.’s health claims and the scientific theory underlying the claims are “unsupported and that the insufficiency of A2 Milk Co.’s evidence has been acknowledged by governmental regulators including the European Food Safety Authority, Food Standards Australia New Zealand and the New Zealand Food Standards Authority”.
The NAD said A2 Milk Co. had noted the California Department of Food and Agriculture, Milk and Dairy Food Safety Branch (CDFA) “reviewed the advertiser’s substantiation for core claims critiqued in the NMPF’s complaint and found that the claims appearing on the A2 Milk label complied with Title 21 of the Code of Federal Regulations and the California Food and Agriculture Code”.
The NAD statement added: “Further, [A2 Milk Co.] maintained that NMPF’s challenge selectively presents incomplete and outdated research and observations made without the benefit of recent research, including irrelevant references to foreign regulatory review of prior unrelated claims.”
A2 Milk Co.’s largest markets are New Zealand, Australia and China. However, it is building a business in the US and recently secured listings with Walmart.
A2 Milk Co. does not break out the sales it generates in the US. It did report combined sales for the UK and the US for the year to 30 June, which it said reached NZD32.4m, up 54%. The markets made a combined EBITDA loss of NZD27.6m, which was 23% higher from a year earlier.
A2 Milk Co. could not be reached for immediate comment on the referral of the matter to the FTC.