Dannon to Pay Yogurt Buyers $35 Million in Settlement
The Dannon Co. settled a class action lawsuit Friday over false advertising claims for its Activia and DanActive products.
As part of the agreement, Dannon said it would create a fund up to $35 million to reimburse consumers for the cost of buying Activia and DanActive yogurt. It will also change its labeling and marketing, including increasing the visibility of the scientific names of the strains of probiotics in the products.
The lawsuit, filed in the Central District of California in January 2008, claimed that Dannon overstated the yogurt’s health benefits. The settlement needs the approval of the U.S. District Court for the Northern District of Ohio.
People who purchased the products since they were introduced in 2006 (Activia) and 2007 (DanActive) will be able to file for reimbursement of up to $100. Dannon spent more than $100 million between January 2006 and July 2007 on marketing Activia, according to the lawsuit. As a result, the Activia line brought in $128 million in 2006 sales and was estimated to have sold approximately $300 million in 2007.
Dannon, a unit of France’s Groupe Danone, in a statement denied any wrongdoing and said it agreed to settle to “avoid the uncertainty and expense of further litigation.”
A Web site will be set up with details for consumers.
The Federal Trade Commission is reviewing similar claims that Dannon said it was cooperating with and was “confident the matter will be resolved soon.”
