Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Purina alleges false advertising, disparagement by competitor Blue Buffalo, (May 7, 2014)

By Linda O’Brien, J.D., LL.M.

Leading pet food manufacturer, Purina has filed a complaint in the federal district court in St. Louis, alleging that competitor Blue Buffalo engaged in a pattern of false and deceptive advertising regarding the nutritional claims and ingredients contained in Blue Buffalo’s pet food (Nestle Purina PetCare Company v. The Blue Buffalo Company Ltd., May 6, 2014).

Nestle Purina PetCare Company is a leading pet food and nutrition company that manufactures and sells pet food, pet treats, and related products in retail stores and on the Internet. Blue Buffalo is in the business of marketing and selling pet food, pet treats, and related products.

According to the complaint, Blue Buffalo product promotion strategy is centered on its ingredient claims and the value of its brand is dependent on such claims. Nutritional and ingredient claims pervade the company’s website, product packaging, print and television advertisements, and other advertising materials. In reliance on these claims, retailers and consumers are willing to pay a substantial price premium for Blue Buffalo products. Blue Buffalo spent over $50 million on advertising in 2013 and is poised to spend another $50 million in 2014. Many of these advertisements include materially false and misleading statements and were made with the specific intent to persuade consumers to purchase Blue Buffalo, according to Nestle Purina. Consumers of pet food have become more ingredient conscious and have relied on these false and misleading statements in making their decisions to purchase Blue Buffalo products.

Blue Buffalo’s marketing asserts that its products are superior to competitor brands because Blue Buffalo products are free from certain ingredients, such as chicken/poultry by–product meals, corn, and preservatives. Consumers have come to falsely associate Blue Buffalo with ultra-premium healthy pet food and Blue Buffalo charges ultra-premium prices based on the false attributes, the complaint alleged.

According to the complaint, independent scientific testing to determine ingredient content was conducted using samples of multiple formulas of Blue Buffalo pet food purchased at retail stores on both the East and West coasts. The testing revealed that for some Blue Buffalo products chicken/poultry by-products meals comprise up to 20 percent of the product by weight, despite the “NO Chicken Poultry By-Product Meals” wording on the product labels.

In March 2014, the National Advertising Division (NAD) of the Council of Better Business Bureaus found that Blue Buffalo engaged in misleading advertising practices with respect to its claims about competing products. In its ruling, NAD concluded that Blue Buffalo provided no evidence that the competing pet food manufacturers actively concealed the truth about the ingredients in their products. Blue Buffalo also provided no evidence that meat by-product meal was not a quality ingredient or not nutritious. NAD recommended that Blue Buffalo correct its television commercials by removing all unsupported allegations that its competitors are misleading consumers. Blue Buffalo was also instructed to change the comparison tool on its website that consumers can use to compare certain characteristics of Blue Buffalo’s products to those of its competitors.

As a result of Blue Buffalo’s willful conduct, Purina suffered irreparable harm, including irreparable harm to its reputation and goodwill and the reputation of its products, Nestle Purina claimed. Blue Buffalo has unjustly profited from the sales of its products that are based on consumer reliance on the false statements it has made about its products, the complaint alleged.

Nestle asserts claims for false advertising, commercial disparagement, and unjust enrichment, and violations of the Lanham Act. The action seeks declaratory and injunctive relief, compensatory and treble damages, pre- and post-judgment interest, costs of suit, attorneys’ fees, and any other just and proper relief.

The case is No. 4:14-cv-00859.

Attorneys: Carmine R. Zarlenga and Richard M. Assmus (Mayer Brown LLP) and David A. Roodman (Bryan Cave LLP) for Nestle Purina PetCare Company.

Companies: Nestle Purina PetCare Company; The Blue Buffalo Company Ltd.

News: Antitrust MissouriNews