Tip:  False advertising claims against business competitors are a staple for helping maintain or establish market share and dominance in the food and beverage industry, but agency regulations and timeliness are important factors that cannot be ignored in making claims against your rivals.

“If you break open a coconut, what’s inside? Coconut milk.” – So said Nancy Chapman, the Executive Director of the Soyfoods Association of North America, as reported on NPR the other morning in response to the latest salvo from Congressional representatives writing to the Food and Drug Administration in favor of the National Milk Producer’s Federation over the perceived lack of enforcement against “misbranded” products calling themselves “milk.”  You know the ones – soy milk, coconut milk, rice milk, pistachio milk. (Yes, many others say “coconut water”).

The problem pointed out by the Congressional representatives, is that the Code of Federal Regulations (21 CFR 131.110) actually defines milk as a lacteal secretion:

(a) Description. Milk is the lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows. Milk that is in final package form for beverage use shall have been pasteurized or ultrapasteurized, and shall contain not less than 8 1/4 percent milk solids not fat and not less than 3 1/4 percent milkfat. Milk may have been adjusted by separating part of the milkfat therefrom, or by adding thereto cream, concentrated milk, dry whole milk, skim milk, concentrated skim milk, or nonfat dry milk. Milk may be homogenized.

So products that come from plant based proteins which aren’t secretions shouldn’t be allowed on the market with the “milk” label, or so they claim.  All this, the representatives assert, is correlated with the falling price of milk while sales of plant-based “milks” have grown 250% in the past five years to $894.6 million (that’s a problem for lacteal secretion milk producers, not for the protein-plant-based manufacturers).  The NPR piece goes on to report that some consumers believe that the products contain similar nutrients, thereby adding to a case for consumer confusion.  And consumer confusion, is good grounds for competitors to take each other to court.  This debate between producers over what should be called “milk” goes back many years – Planet Money (another NPR source) noted it back in 2010 regarding the “bastardization of dairy terms.”

And the debate over these proper dairy definitions has increased to a healthy clip in the courts where competing brands often challenge each other, especially over the type of market share resulting in the multi-billion dollar markets surrounding dairy products.

One such case recently hinged on the lack of an FDA definition for Kefir.  Lifeway Foods sued Millennium Products a probiotic beverage company and CocoKefir seeking an injunction to stop them from calling a coconut water based product “kefir”.

cocokefir

Lifeway first wrote a cease-and-desist letter to Millennium reiterating some previous FDA warnings from an inquiry into CocoKefir (You can read the original FDA warning letter to CocoKefir back from November of 2011 here) (and you can read Lifeway’s letter to Millennium here).  The problem is that the FDA warning came back in 2011 and the FDA closed out its investigation regarding CocoKefir back in 2013.  Here’s the closeout letter finding that CocoKefir had addressed the violations raised in the FDA’s 2011 letter – and did not instruct or direct that CocoKefir stop using the term “kefir.”  And the FDA had, in 2011, pointed out that:

We are concerned that the brand name of the product, “CocoKefir,” may potentially be misleading because it appears to imply that the product is a dairy beverage. Use of bolding and an alternate font makes the word “Kefir” appear more prominently featured than the word “Coco.”  Kefir is commonly understood to be a dairy beverage of fermented milk from cows, sheep, or goats.

In spite of what appears to have been FDA and FTC consideration of the issues and conclusion of the matter, Lifeway brought suit looking to stop the practice and a federal District Court has now denied their request for an injunction to stop the alleged unfair practice of calling a product that isn’t based on dairy, “kefir”, and dismissed their  false advertising complaint.

The FDA conclusion of the matter as well as the time lapse were seminal points in the opinion of the District Court denying the preliminary injunction Lifeway sought and also in the Court’s later opinion granting Millennium’s motion to dismiss the complaint brought by Lifeway for false advertising and unfair competition based on Millennium’s claims that Lifeway simply waited too long (from 2011) to bring a suit in 2016 over false advertising claims when it should have known from defendants’ social media presence and their interaction with the FDA that they had not withdrawn their product from the market:

Defendants have relied on the FDA’s Close Out Letter approving of their labels and proceeded to develop their business accordingly. They would not have continued to invest in their brand had they known that Plaintiff would bring suit five years after discovery of their brand.

While not a substantive determination that “kefir” need not come from dairy, the District Court did note that the term was not yet defined:

Plaintiff’s claims are largely based on its assertion that kefir must contain dairy in order to be called kefir. If kefir must be a dairy-based beverage, then Defendant’s product could be misleading because it does not contain dairy. Plaintiff cites a wide range of dictionary definitions and websites supporting its argument that kefir must contain dairy. However, these sources are minimally convincing. As mentioned above, kefir only recently rose to popularity. As Plaintiff’s concerns of irreparable harm indicate, the market for kefir is relatively small and not yet fully developed. Thus, these websites’ and dictionary’s definitions do not provide a convincing definition of kefir, but rather, a surface-level understanding of a relatively new product. These definitions are not ones on which the FDA or any regulatory body has chosen to rely. On the contrary, the FDA has reviewed the core of Plaintiff’s claim and found it to be unworthy of regulatory action. The 2011 warning letter from the FDA to CocoKefir stated in relevant part that the FDA was concerned the name CocoKefir would mislead consumers to believe it was a dairy-based beverage. However, after CocoKefir’s response, the FDA was satisfied that CocoKefir was neither misleading nor mislabeled.

Furthermore, Plaintiff’s attempts to define kefir as a necessarily dairy-based beverage based on the word kefir’s inclusion in various FDA regulations is unconvincing. Plaintiff points out that “kefir cultured milk” is listed as an example of “cultured milk” in 21 C.F.R. §113.112(f). The mere inclusion of the word kefir in the regulation defining cultured milks is not proof that kefir must be a dairy-based beverage. It proves nothing more than the fact that there may be kefirs which are a type of cultured milk. Defendant points out that “soy milk” products are not mislabeled by virtue of calling itself milk despite its lack of dairy. Plaintiff responds by arguing, simultaneously, that kefir has a more historical and specific definition as a dairy-based drink than soy milk while also arguing that it has spent “millions” of dollars branding its kefir as a dairybased drink. If the meaning of kefir was so clear and “enshrined,” it would seem unnecessary to spend millions of dollars specifically branding kefir as a dairy-based beverage.

While this isn’t a resounding endorsement of the argument Millennium made in its brief that “Kefir is a fermenting agent used to ferment a wide range of liquids including coconut water,” it is a decidedly sympathetic passage and shows the great deference paid by courts in false advertising suits to both action and lack-of-action on the part of federal regulators (especially the FDA in food-related false advertising claims) with regard to the precise definition or implications of product claims.

So, while the opinion may rely on the timing and lack of diligence in bringing the lawsuit back in 2011 or earlier to stop the practice, it is entirely likely that a timely claim would still find no purchase based on the lack of a federal standard for what constitutes, or is meant by, “kefir.”

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