WhiteWave Foods Co (NYSE:WWAV)’ caught in ECJ trial wave

Posted by Chris Bell September 16, 2013 0 Comment 1026 views

A spade should be called a spade and anything different would mean you are masking what it really is. Similarly when WhiteWave Foods Co (NYSE:WWAV) tried to call sugar, ‘evaporated cane juice’, it will lead to consumer confusion irrespective of how much more appealing it sounds.

Very recently, the company was compelled to settle a certain lawsuit for referring to sugar as evaporated cane juice or ECJ. The Food drug Administration says that is misleading in that it indicates that sugar cane syrup from which this sweetener is derived, actually comes from juice, which as a matter of fact, it does not.

Numerous cases

This is not an isolated case. There are numerous cases such as these across the industry. Consumers are becoming more health conscious and food manufactures are scrambling to make the products seem more healthy and wholesome. From this perspective, consuming something that is derived from juice against something derived from sugar sounds a great deal more nutritious.

Despite the settlement by the company, things are still pretty much in a limbo with reference to ECJ. This is primarily because conflicting decisions are being issued by various courts and there is no clarity about who should have jurisdiction about deciding matters such as these.

What’s in a word?

Trader Joe’s as well as Kellogg’s Kashi brands trial lawyers have been weighed down with various lawsuits against different companies that list ECJ on product labels instead of printing sugar. Chobani, the Greek yogurt maker tried to have its own lawsuit dismissed citing lack of jurisdiction. They believed that ideally, the FDA is the body that decides these issues.

However, the judge said that he was not convinced that these claims should actually be stayed or dismissed on the grounds of primary jurisdiction. This simply means that courts have the power to determine how appropriate use ECJ is. The premise behind this is that though standards of identity can prove to be beneficial to the consumer, they can also be potentially used as a protection racket.

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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