There’s no law that requires products sold in the U.S. to be marked or labeled “Made in USA” or have any other disclosure about their amount of U.S. content. But that hasn’t stopped pet food manufacturers from using Old Glory to cash in on consumer’s preference for goods made in the U.S.
“Made in the USA” is one of the most important considerations when choosing a pet product, and manufacturers have responded by glutting the market with a plethora of patriotic “Proudly Made in the USA” labels. Labeling products as “Made in the USA” has become one of the industry’s most highly effective – and profitable – marketing tools of the past decade.
That’s because “Made in the USA” sells. In fact, almost 8 in 10 American consumers say they would rather buy an American-made product than an imported one. And they’re willing to pay more for it – a lot more for it – and they’re paying for it in more ways than one.
Some say that influence is predatory, that certain pet food companies are capitalizing on consumer’s fear of foreign ingredients by patriot-washing their products – worse, some are being accused of deliberately making false and misleading claims about the amount of U.S. content of their pet products.
Sick of being swindled, consumers sue over iffy “Made in the USA” claims
Sick of being swindled by the patriotic swill, consumers are filing class action lawsuits – one after another – accusing pet food companies of using deceptive marketing practices by misleading consumers by failing to comply with the Federal Trade Commission (FTC) “Made in the USA” policy.
Six class action lawsuits have been filed in the last month alone against pet food giants Nestle Purina Petcare (Merrick Pet Care; Castor and Pollux Natural Petworks), J.M. Smuckers (Big Heart Pet Brands; Milo’s Kitchen), Tyson Foods (Nudges Pet Treats), Fromm, and two separately filed lawsuits against Wysong Corp. for falsely labeling certain pet food and pet treat products as “Made in the USA”, when it allegedly includes ingredients sourced outside the U.S.
What are these lawsuits based on?
Quite simply, it is deceptive for a product to be advertised or labeled “Made in USA” if a product is not “all or virtually all” made up of ingredients that were raised, grown, harvested, mined, or created in America. Even if a product contains a small amount of an imported ingredients (such as vitamins and minerals) that is significant to its form, use or function, it cannot be advertised or labeled as “Made in the USA.”
So, even if the imported vitamins and minerals only make up a small part of the total wholesale cost of producing the product, the FTC will also considered how significant an ingredient is to the function of the product. For example, a “complete and balanced” pet food is required to have a Nutritional Adequacy Statement on the label, otherwise it cannot be legally sold as a nutritionally adequate food.
How does the FTC define “all or virtually all”?
Unfortunately, this “virtually all” standard is vague – and the FTC has declined to come up with a formula for manufacturers.
The commission doesn’t specifically say what it means, just that “the products should contain no – or negligible – foreign content.”
Instead, the FTC makes each determination on a case-by-case basis; leading many companies to avoid the unknown outcome of such an investigation by adopting the much safer (although decidedly less appealing and less profitable) qualified claim, such as “Made in the USA with imported ingredients” claim instead.
In the case of pet food advertising, the FTC would have a hard time with an unqualified claim if it includes imported vitamins and/or minerals (premixes). Why? Because in making the final determination, the Commission will not only consider the amount of the foreign material, but they will also consider the significance of the ingredient (or part) to its function.
Therefore, any claim that a product is “complete,” “balanced,” “100% nutritious,” or claims of a similarly nature that suggests a product is suitable for sole nourishment when it is not, in fact, nutritionally adequate for such purpose is a potentially unsafe product. For this reason, an AAFCO nutritional adequacy statement is one of the most important aspects of a dog or cat food label.
What is the difference between an “unqualified claim” and a “qualified claim”?
Because companies struggle with what “all or virtually all” means, they can’t be certain what percentage of foreign material they can get away with and still make the “Made in the USA” claim.
Of course, if a product doesn’t meet the FTC’s definition of “all or virtually all” fuzzy line in the sand, then companies can use what’s called a “qualified claim.” In other words, they can say, for example, it was “Assembled in the USA with foreign materials,” or some similar wording. Basically, a qualified claim contains a disclosure that the product was not made entirely in the U.S..
What is the difference between an “express claim” and an “implied claim”?
Here’s where companies can really get into trouble: not realizing that an implied claim is just as binding as an express claim. Essentially they both end up doing the same thing (meaning it was “Made in the USA”), they just do it in a completely different manner.
Quite simply, a “Made in the USA” claim is any wording on a label or an advertisement that says it was made in America or words to that effect, without any other disclaimer (such as “Made in the USA with foreign ingredients”), is an “express claim.”
An “implied claim”, on the other hand, depending on the context, is a slippery and sneaky way that pet food companies can get into a lot of trouble (and consumers need to be wary of). An implied claim is one that uses U.S. symbols or geographic references, such as U.S. flags, outlines of U.S. maps, or references to U.S. locations of headquarters or factories, may, by themselves or in conjunction with other phrases or images, convey (or give the impression) a claim of U.S. origin.
But, what happens when a less-than-reasonable consumer sees a package with a U.S flag, or just red, white and blue stars and stripes on it (even if, in tiny mouse print, it says on the back it was “distributed by…” or “Made in China”)?
Answer: If the overall impression it makes is that it is a product of the US., then that is an implied claim.
Which may be fine – if it actually is “Made in the USA” – but if it isn’t, then that claim would be considered false and misleading.
So, strictly speaking, companies should be very careful when using certain graphic images, colors or symbols that could convey (or give the impression) without words, that the product is made in the U.S. with ingredients from the U.S.
Comprehending and complying with the complex web of confusing laws
Complying with the “Made in USA” standard is not as straightforward as it may seem. In fact, it’s a pretty complicated and at times, utterly confusing.
The term is woven in a complex web of laws within the Federal Trade Commission Act which, in principal, is governed by the Federal Trade Commission that is largely responsible for regulating the “Made in USA” marketing claim to prevent deception and unfairness in the marketplace.
But, the FTC isn’t the only agency involved in dealing with the wily claim; further complicating the matter is that the enforcement of the claim is shared by no less than four different federal agencies.
Stay with me here.
Currently, the FTC, Food and Drug Administration (FDA), the United States Department of Agriculture (meat and poultry) and the U.S. Customs Service (country of origin labeling) share jurisdiction over claims made by manufacturers of food products.
Julia Solomon Ensor, an attorney in the FTC Bureau of Consumer Protection’s Division of Enforcement, clarified the division of jurisdiction over pet food by saying that any questions or complaints about such labels on pet foods and treats “would be reviewed in tandem with the FDA, the federal authority on food and drug labels.”
The FTC and the FDA operate under a Memorandum of Understanding, where they have a collaborative working relationship and will commonly issue joint letters in areas that overlap in terms of deception.
In general though, the FTC has assumed primary responsibility for regulating food advertising, while FDA has taken primary responsibility for regulating food labeling. In other words, the FDA will not take action over food advertising claims and the FTC will not take action over labeling claims. There is a system of regulation; the jurisdiction is just split between the FDA and the FTC.
State and local governments can also go after businesses that violate advertising laws; usually this is the responsibility of the state attorney general, the consumer protection agency, and the local district attorney. And of course consumers and competitors may also proceed directly against the advertiser in a court of law.
In practice, however the division between authority is not always clear.
Since the jurisdiction is divided between the FDA & the FTC, what is the difference between advertising and labeling?
Labeling includes any labels and other written, printed, or graphic matter on the package or of its containers or wrappers that accompany the package. Specifically, it including “anything involved in informing the sales transaction, including written material sold with a product, such as brochures, catalogs, and mailers, etc.”
Advertising typically includes paid for pieces in third party media, such as magazines, periodicals and newspapers, and advertisements broadcast through media such as radio, television and the Internet.
Although advertising and labeling are not mutually exclusive; there exists a liaison agreement between the two agencies, whereby the FTC defers to the FDA when deceptive claims that appear on the labeling of food, and the FDA defers to the FTC on deceptive advertising.
Where does AAFCO fit into the picture?
AAFCO has no regulatory authority, whatsoever, over “Made in the USA” claims, but they do caution companies to be careful to follow the FTC rule on “Made in the USA” claims.
The FTC has made clear their role with AAFCO and the FDA with regards to their jurisdiction over the marketing of pet food, saying:
“The Commission is not relinquishing jurisdiction over the labeling and advertising of dog and cat food. In fact, pet food labeling and advertising, including labeling and advertising for foods for pets…must still comply with Section 5 of the FTC Act. In enforcing Section 5, however, the Commission will be unlikely to challenge advertising claims under the FTC Act that are consistent with labeling claims that satisfy the requirements of the AAFCO Model Regulations or the regulations issued by the FDA.”
What is the Federal Trade Commission Act?
Very briefly, the Federal Trade Commission Act (“FTC Act”) generally regulates advertising, as an “unfair trade or practice” of section 5, or under section 12 which explicitly provides that it is unlawful for anyone to disseminate any false advertising in connection with the purchase of foods or drugs.
For example, Section 5 of the FTC Act prohibits “unfair or deceptive acts or practices,” and, in the case of food products, Sections 12 and 15 of the FTC Act prohibit “any false advertisement” that is “misleading in a material respect.”
Where does the FDA and the Federal Food, Drug, and Cosmetic Act fit in?
Most of you know by now (I hope) that pet food products made domestically may contain imported ingredients and that no requirement exists for a package to list the source of each ingredient. Even so, the FDA prohibits pet food companies from make a false or misleading statement or claim on a label.
FDA’s authority is embodied in part in Section 403(a) of the Federal Food, Drug, and Cosmetic Act (FDCA) which prohibits “labeling [that] is false or misleading in any particular.”
The FDCA generally prohibits misbranding, which is defined as using a “false and misleading label or labeling, or having a label which does not contain the information specified in the Act, such as directions for use of the product and warnings about potential health dangers.”
The acid test: can the ad mislead a less-than-reasonable consumer?
The FTC says that they will find an ad deceptive, if it is likely to “mislead consumers acting reasonably under the circumstances, and that representation or omission is material.”
Historically, when suing companies for false advertising, it must be shown that a reasonable person could be deceived by the advertisement. However, the courts now often try to protect less-than-reasonable consumers, and adopt an ignorant-consumer standard, because half the population has a less-than-average ability to reason (their words, not mine).
Therefore, courts side with clueless consumers who are particularly vulnerable to deceptive and fraudulent practices. They believe that most consumers possess very limited knowledge of the likelihood that pet food products claiming to be “Made in the USA” could be sourced with ingredients from foreign countries.
Bottom line: pet food companies should be very careful with “Made in the USA” claims
With increased consumer and media attention on the pet food industry lately regarding transparency in labeling, it seems that more and more companies are finding themselves slapped with legal complaints.
Particularly for pet food companies using “Made in USA” claims, either explicitly or by implication with the use of images such as the U.S. flag or map, they should pause to consider…is it worth the risk?
Because, unless they want to endure an ugly, expensive and embarrassing lawsuit (which could very likely have a devastating impact on their company), they should realize that consumers have a much higher level of awareness about pet food labeling than ever before and they aren’t afraid of fighting a multi-billion dollar industry – especially if they feel their beloved fur baby’s health might have been put at risk by phony “Made in the USA” claims.
How does the FTC find out about unlawful ads?
For the most part, the FTC relies on consumers and competitors to report unlawful advertising. However, Julia Solomon Ensor, an attorney at the FTC, noted that the majority of complaints about U.S.-origin claims come from competitors of companies making the claims:
“The consumer has very little ability to analyze on his or her own whether the claim is true or not,” she said. “Usually the person in the best position to know whether it’s true or false is a competitor.”
Still, consumers can – and should – make complaints about pet food advertising that they feel might be misleading or untruthful.
Again, with regards to false and misleading labeling complaints, consumers should notify the FDA about pet food labeling concerns.
What can the FTC do with violators?
Theoretically, if FTC investigators are convinced that an ad violates the law, they usually try to bring the violator into voluntary compliance through informal means. If that doesn’t work, the FTC can issue a cease-and-desist order and bring a civil lawsuit on behalf of people who have been harmed. If that doesn’t work then they can bring out the big guns and they can seek a court order (injunction) to stop an iffy ad while an investigation is in progress. Worse, if the FTC busts a company for phony ads, they can require an advertiser to run corrective ads – ads that state the correct facts and admit that an earlier ad was deceptive!
Who to complain to about questionable “Made in the USA” food claim?
Suspect a violation? If you believe that a product promoted as “Made in USA” is not America-made or contains significant foreign parts or processing, then by all means you should file a complaint with the federal government!
Food labeling (except for meat and poultry):
U.S. Food and Drug Administration (FDA)
10903 New Hampshire Ave.
Silver Spring, MD 20993-0002
Phone: (888) INFO-FDA (463-6332)
Food advertising (except for meat and poultry):
Federal Trade Commission (FTC)
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, D.C. 20580
Phone: (877) FTC-HELP (382-4357)
Meat and poultry labeling:
Food Safety and Inspection Service (FSIS)
U.S. Department of Agriculture
1400 Independence Ave., S.W.
Washington, D.C. 20250-3700
Phone: (888) MPHotline (674-6854)
Meat and poultry advertising:
Federal Trade Commission (FTC)
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, D.C. 20580
Phone: (877) FTC-HELP (382-4357)
If you are aware of import or export fraud (such as questionable country-of-origin labeling claims) call the U.S. Customs Service Commercial Fraud Hotline, 800-ITS-FAKE. Note: Country of origin labeling laws (COOL) are an entirely different subject (which I have written about extensively and will do so again).
Resource: The FTC’s Enforcement Policy Statement and its business guide, Complying with the Made in USA Standard, spell out the details of the standard, with examples of situations when domestic origin claims would be accurate and when they would be inappropriate. See www.ftc.gov/os/statutes/usajump.htm for more information.