January 10, 2011
Mr. David Vladeck, Director
Bureau of Consumer Protection
Federal Trade Commission
600 Pennsylvania Ave., N.W.
Washington, D.C. 20580
Re: Request for Investigation of Deceptive Practices in Advertising and Labeling as “Fair Trade Certified” of Certain Personal Care Products
Dear Mr. Vladeck:
Pursuant to the Commission's Rules, 16 C.F.R. §2.2, the Organic Consumers Association (“OCA”) and All One God Faith, Inc. d/b/a Dr. Bronner's Magic Soaps (“Dr. Bronner's”), respectfully requests the Commission to institute an investigation of the blatantly deceptive labeling as “Fair Trade Certified” of certain personal care products, in violation of section 5 of the Federal Trade Commission Act.
The deceptive practices at issue are those of (1) The Hain Celestial Group, Inc. (“Hain”), makers of the “Queen Helene” brand of body cleansers and lotions; (2), Avon Products, Inc., makers of the “Mark” brand of cosmetics and personal care; and (3) TransFair USA, the certifying organization that has authorized the misleading and deceptive labeling and advertising of “Queen Helene” and “Mark” brand products as “Fair Trade Certified” when in fact the products so labeled contain a minimal amount of fair trade certified ingredients.
I. Fair Trade Labeling and Advertising
The term “fair trade” is used to denote ingredients and products, particularly agricultural products, that have been purchased from cooperatives, collectives or other groups of farmers in developing countries, who have been paid a guaranteed minimum price plus a fair trade “premium” for community development projects; who treat their farm workers in accordance with recognized standards for achieving safe and healthful working conditions; and who commit to using environmentally sustainable farming methods, among other things. See Fair World Project, For a Better World: Issues and Challenges in Fair Trade 4 (2010), attached hereto as Exhibit 1. As a considerable body of research has confirmed, socially conscious consumers increasingly prefer to purchase fair trade products when available, even at a premium price, because such consumers want to be assured that, in the production of a product, fair prices were paid to farmers, fair wages were paid to farmworkers, and no child labor or other exploitative practices were involved.
The actual standards for what constitute “fair trade” practices are established by several different international nonprofit organizations. One major such organization is Fair Trade Labeling Organizations International (“FLO”). FLO in turn is composed of a number of national or regional organizations, including TransFair, that among other things are authorized to determine whether an agricultural product meets the applicable standards. TransFair licenses the producer of a product to label it as “Fair Trade Certified” and to use the TransFair “Fair Trade Certified” seal in the advertising and sale of an agricultural product meeting TransFair's standards. TransFair charges licensees of the TransFair seal a volume-based licensing fee to support TransFair's marketing efforts on behalf of the licensees. TransFair permits its certification marks to appear on the front of products with both majority and minority fair trade content on a dry weight basis.
Another international organization, the Institute for Marketecology (“IMO”), together with the Swiss Bio Foundation, jointly created a separate “Social and Fair Trade Certification Programme”. Under this separate program, a product that meets the applicable standards can be labeled and advertised as “FairTrade - Fair for Life.” IMO does not permit the use of its certification mark on the front of a product's label unless a majority of the contents of that product, on a dry weight basis, has in fact been fair trade certified. For an overview of these two certification programs, see generally, “How do You Know It's Really Fair Trade: An Overview of Fair Trade Labeling and Validation Programs,” in Fair World Project, For a Better World: Issues and Challenges in Fair Trade 5-7 (2010) attached hereto as Exhibit 2.
II. Complaining Parties
A. Organic Consumers Association
OCA, located at 6771 South Silver Hill Drive, Finland, MN 55603, telephone 218-226-4164, is a non-profit educational organization dedicated to promoting the interests of the nation's socially responsible consumers. OCA represents over 850,000 members, supporters, subscribers and volunteers. OCA advocates for the interests of consumers in the areas of food safety, industrial agriculture, genetic engineering, corporate accountability, fair trade and environmental sustainability. OCA's consumer education programs urge consumers generally to “Buy Local, Organic and Fair Made.“
B. Dr. Bronner's
Dr. Bronner's, a California corporation, located at 2751 Auto Park Way, Escondido, California 92029, manufactures and sells, throughout the U.S., personal care and cosmetic products including the nation's top-selling natural brand of liquid and bar soap in a number of varieties under the brand “Dr. Bronner's Magic Soaps,” and lotions, hair rinses, shaving gels and balms under the brand, “Dr. Bronner's Magic.” Dr. Bronner's liquid and bar soaps, in general, comply with the US Department of Agriculture National Organic Program requirements for labeling a product as “Made with Organic [specified ingredients]”. In addition, these Dr. Bronner's products carry the IMO certification seal “Fair Trade—Fair for Life,” and the term “Certified Fair Trade,” based on compliance with the IMO “Social and Fair Trade Certification Programme” rules governing such labeling. Those rules require that if a product carries the label “Fair for Life—Social & Fair Trade certified by IMO,” ninety percent of the product's contents excluding water must be fair trade certified to the extent that sufficient fair trade certified ingredients are available. To the extent that any non-water ingredients are not available from fair trade sources, regardless, at least fifty percent of all non-water ingredients by weight must be fair trade certified; also, as fair trade certified versions of the remaining ingredients become commercially available, those fair trade certified versions must be used. (IMO Social & FairTrade Programme §18.104.22.168 (Feb. 2008)). These provisions sensibly allow for example, that the inorganic alkali necessary to saponify oils in soaps, approximately 25% by weight of the oils, cannot be sourced on fair trade agricultural terms; however the oils can be and Dr. Bronner's procures over 95% by volume from fair trade sources.
Dr. Bronner's has, since 2006, through subsidiaries and with partner companies, established several fair trade certified projects in developing countries for the production of the raw materials used to make its main cleansing and moisturizing ingredients, improving the lives of farmers, workers and their communities in those countries. In addition to being certified organic, the commodities produced in these projects are certified fair trade under IMO's Fair for Life (FFL) program, and now account for over ninety-five percent by volume of Dr. Bronner's raw materials (excluding alkali) for soaps and other body care products--in particular, coconut, palm, olive and mint oils. Attached as Exhibit 3 is a copy of the labels of Dr. Bronner’s top selling peppermint bar and liquid soaps. As the ingredient lists for these products show, the main ingredients of these products, that achieve their central function as soap when combined and saponified with alkali (potassium or sodium hydroxide), are certified fair trade Coconut, Olive and Palm Oils, scented with fair trade Mentha Arvensis and Peppermint Oil. The Organic Hemp and Jojoba Oils are present in smaller amount as non-saponfied “superfatted” ingredients for smoother lather and less-drying afterfeel. (The hemp oil actually is acquired from a “domestic fair trade” certified source from Canada that is not yet noted on the labels, and Dr. Bronner’s is also currently working with the Com’caac (Seri) Indian tribe in the Mexican Sonoran desert, along with IMO, to set up a sustainable and fair trade certified supply of organic wildcrafted Jojoba oil).
Dr. Bronner's decided to use the Fair for Life certification program of IMO rather than that of FLO/TransFair because, at the time, FLO did not have standards for several of these raw materials and because FLO's regulations did not and still do not accommodate the creation of cooperative ventures between a mission-driven company and unorganized small farmers and producers. See D. Bronner, Going Fair Trade (2010) attached hereto as Exhibit 4, summarizing the company's experience with the conversion to organic/fair trade sources, its experience with TransFair/FLO, and its decision to participate instead in IMO's “Fair for Life” program.
III. TransFair's Deceptive Certification and Licensing Practices
TransFair is the only FLO certifying agency based in the U.S. TransFair purports to control use of the term “Fair Trade Certified” in the United States generally, beyond specific use of that term in TransFair’s certification mark. The TransFair US Label and Language Use Guide (April 2008)(the “TransFair Label Guide”) states that TransFair USA “retains exclusive rights to license use of the Fair Trade Certified (FTC) logo and the term 'Fair Trade Certified™'”. (TransFair Label Guide at 1)(emphasis added). (A copy of the TransFair Label Guide is attached hereto as Exhibit 5).
There are two classes of products each of which, under TransFair’s rules, is licensed to use a separate mark. First, if the product as a whole is entitled to be called “Fair Trade Certified,” it can display the “Fair Trade Certified” mark. Under TransFair’s rules, a product cannot display this mark, or seal, unless: “All ingredients that can be Fair Trade Certified are Fair Trade Certified, the FTC ingredient(s) constitutes more than 50% of the dry weight (excluding water) of the product and no formulation exemption has been issued.” (TransFair website, http://www.transfairusa.org/content/certification/ingredients_program.php) By far the most widely sold product displaying the “Fair Trade Certified” mark is fair trade coffee.
Second, if the majority of a product’s content is not fair trade certified, on a dry weight basis, but the product contains some fair trade content, then the product is not entitled to be labeled as “Fair Trade Certified.” Rather, under TransFair’s rules, the product can display what is supposed to be a separate mark, the “Fair Trade Certified Ingredient Specific Mark.” TransFair USA Composite Product Policy for Food Products, http://www.transfairusa.org/content/Downloads/certification/CompositeProductPolicy.pdf. That “ingredient-specific mark” reads: “Fair Trade Certified [specific ingredient]” rather than simply “Fair Trade Certified.” For personal care products, TransFair’s rules allow this “ingredient-specific” mark to be displayed on a rinse-off product with as little as two percent fair trade content and on a leave-on product with as little as five percent, on an absolute basis not exclusive of water. See TransFair website, http://www.transfairusa.org/content/certification/beauty_policy.php.
Under this policy, TransFair engages in two related practices which, in fact, are deceptive and misleading to consumers. First, the single ingredient seal—the so-called “Fair Trade Certified Ingredient Specific Mark” —is identical in appearance to the “Fair Trade Certified” marks. Exhibit 6 hereto depicts a side by side comparison of the two seals. Consumers are deceived by the identical-appearing seals into believing that a product that displays the ingredient-specific seal is a “Fair Trade Certified” product—in which the majority of the content is fair trade certified—when in fact the majority of content is not fair-trade certified and the product typically contains only trade certified ingredients accounting for no more than 2% to 5% of the product contents.
Second, TransFair and its licensee then typically market the entire line as “Fair Trade Certified,” even though the products sold in that line contain, as noted, fair trade certified ingredients accounting for only 2 to 5% of the product content. TransFair’s licensing policies may create an incentive to engage in these two practices. TransFair receives the same licensing fee regardless of whether a product consists of a majority or a small minority of fair trade certified content. Were TransFair to differentiate in the labeling of such products in a meaningful way, the licensing of its ingredient-specific mark would not be nearly as attractive to prospective brands seeking an inexpensive way to market their goods as “Fair Trade.”
Significantly, parallel practices in the field of labeling and marketing of products as “organic” have been prohibited by federal regulation precisely because such practices are inherently misleading. Under the regulations promulgated by the U.S. Department of Agriculture's National Organic Program (“NOP”) under the federal Organic Food Products Act of 1990, 7 U.S.C. §§6501 et seq., a processed agricultural product sold or labeled as “organic: must contain by weight or fluid volume, excluding water and salt, not less than 95% organically produced raw or processed agricultural products. 7 C.F.R. §295.301(b). If a product may be labeled “Organic” under this rule, the term “Organic: may be used on the label to modify the name of the product and be in letters as large as the name of the product itself. Id. §205.303(a).
The NOP regulations provide for another, separate category of products, at least 70% of the contents of which consist of certified organic ingredients. Products meeting this 70% standard may not be labeled “Organic;” rather, they may only be labeled on the principal display panel, as “Made with Organic [specified ingredients]” . Id. §§205.105(a), 205.301(c), 205.304(a)(1)I) & (ii). The NOP regulations do not permit the label of such a product to state simply that the product is “Made with Organic Ingredients,” which would inaccurately imply that all of the ingredients are organic; rather the term “Organic” must modify specified individual ingredients. Id. §205.305. Further, the specific-ingredient claim must appear in “letters that do not exceed one-half the size of the largest type size on the panel:” and which appear in their entirety “in the same type size, style and color without highlighting.” Id. §205.;304(a)(1)(iii).
Clearly, it is just as misleading and deceptive for a product containing only a minor portion of fair trade certified content to be labeled in a way that leads the consumer to conclude that the entire product is “fair trade certified”, as it would be for a product containing only a minor portion of “organic” ingredients to be labeled in a way implying that the entire product is “Organic.” Such labeling is precisely what is forbidden by the USDA regulations, in order to prevent conflation of products with only minor organic content from being labeled and marketed as if they are mostly or entirely organic. The first page of Exhibit 6 displays a comparison of a USDA/NOP-compliant “logo” for a product with a minority of organic content with a USDA/NOP-compliant logo for a product with over 95% organic content. As Exhibit 6 demonstrates, the two USDA-NOP logos are markedly different while TransFair’s supposedly different “Fair Trade Certified” seals are intentionally and essentially identical. The second page of Exhibit 6 depicts what a hypothetical, unlawful USDA seal would look like (along the lines of TransFair’s single ingredient/minority fair trade content mark) for a product with less than 95% organic content, that under the NOP rules can display only the words “Made with Organic [specified ingredients].”
The deceptive and misleading labeling practices enabled by TransFair’s program are illustrated in the labeling and advertising of products sold under the “Queen Helene” and “Mark” brands.
IV. Misleading and Deceptive Labeling and Advertising of “Queen Helene Naturals” Products
The “Queen Helene” brand manufactured and sold by the Hain-Celestial Group consists of more than eighty separate products; of those, four “Queen Helene Naturals” products are labeled and nationally advertised as “Fair Trade Certified.” These include Cocoa Butter Body Wash, Cocoa Butter Lotion, Cocoa Butter Crème, and Cocoa Butter Body Scrub. These products compete directly with Dr. Bronner's fair trade soaps, lotions and bodywashes.
Attached as Exhibit 7 is a sample label for one of these products, Queen Helene Naturals Fair Trade Certified Cocoa Butter Body Wash. Attached as Exhibit 8 is an example of advertising of these products on the Internet by Hain.
Each of these products is prominently labeled, immediately under the brand name, on the front label, “Fair Trade Certified,” in letters as large as those identifying the product itself (e.g., “Cocoa Butter Body Wash”). In fact, however, none of these products, in itself, has been “Fair Trade Certified” by TransFair. Only one ingredient, Cocoa Butter, in the products has been so certified---accounting for a miniscule part of the entire product.
For example, in the product labeled “Queen Helene Naturals Organic Fair Trade Certified Cocoa Butter Body Wash,” only the Cocoa Butter-the seventh ingredient listed after Aqua(Purified Water), Sodium Myreth Sulfate, Cocamidopropyl Hydroxysultaine, Vegetable Glycerin, Cocamide, MAE, Acrylates Copolymer -is in fact fair trade certified, That ingredient accounts for no more than 2% of the weight of the product. Not only do the words “Organic Fair Trade Certified” appear prominently at the top of the front panel label, as shown in Exhibit 7, but the label also displays the Fair Trade Certified Ingredient Specific Mark at the bottom-a seal which appears identical to the seal denoting certification of an entire product as “Fair Trade Certified.” Clearly, the implicit representation of this product as one that is in its entirety “Fair Trade Certified” is misleading and deceptive to consumers.
Attached as Exhibit 9 is a hypothetical label for this same product in which the TransFair Fair Trade Certified -ingredient specific mark is juxtaposed (through alteration of the photo-NOT a real photo of the label) with the hypothetical USDA seal from the second page of Exhibit 6 for products with as low as 2% (versus the actual 95% minimum) organic content, created in TransFair's style of inserting only a small ingredient descriptor below the “whole product” certification mark. This fictitious mark denotes that the product contains 2% organic content, if USDA-NOP rules allowed display, on such a product, of such a seal that looks identical to the “USDA Organic” seal for 95% organic content. In fact the USDA-NOP rules do not allow display of such a seal, as noted, precisely because consumers would be confused and misled.
Indeed, Hain markets its entire Queen Helene Naturals line as a product line that promotes fair trade principles of fair prices and wages for farmers and workers in the developing world, even though those few products contain only one fair trade certified ingredient, Cocoa Butter, accounting for a miniscule portion of the product content. For example, Queen Helene's website on its “We Care” page implies that “Fair Trade” is one of three defining socially responsible attributes of the entire brand, along with “Sustainability” and “Animal Friendly.” The website then states that “Our Naturals brand is Fair Trade Certified,” although in fact not a single product sold under that brand is “Fair Trade Certified,” since the products are entitled to carry only the specific-ingredient mark. See Queen Helene website page at http://www.queenhelene.com/we_care.php (included in Exhibit 8).
Even more egregious is that the entire Queen Helene product line is generally labeled and marketed as consisting of “Cocoa Butter” products. However, the cocoa butter contained in most of these products is not only present in very small amounts, it is also not fair trade certified. For example, in “Queen Helene Natural Cocoa Butter Moisturizing Body Oil,” label attached as Exhibit 10 hereto, the cocoa butter is not in fact fair trade certified, and is the fifth ingredient listed, after Soybean Oil, Sesame Oil, Safflower Oil, and Isopropyl Myristate. And the few products in this brand line that purport to be “Fair Trade Certified” - for example, the Cocoa Butter Body Wash described above-contain fair trade cocoa butter, accounting, as noted, for only a miniscule portion of the product's content. By marketing the Naturals line as “Fair Trade Certified,” Hain is further misleading and deceiving consumers into believing, not only that the products so labeled are “Fair Trade Certified,” but that the entire line is somehow committed to fair trade.
In May 2009 and again in July 2010, Dr. Bronner's communicated directly with TransFair and requested TransFair to demand that Hain cease and desist from using the TransFair “Fair Trade Certified” ingredient specific mark and term “Fair Trade Certified” on the front panel labels of the subject product. Copies of Dr. Bronner's' letters to TransFair are attached as Exhibit 11. However, TransFair to date has not taken any action in response to these requests.
V. Misleading and Deceptive Labeling and Advertising of Mark Products
Avon engages in similar deceptive labeling and advertising of certain of its “Mark” brand products. A minor subset of Mark products displays the TransFair specific ingredients seal which, as noted, appears identical to the whole-product seal. Thus it appears to the consumer that these products are “Fair Trade.” Yet the specific ingredients in these products that are in fact fair trade certified mostly have no functional value in the product and represent minimal portion of the product's content. For example, the TransFair “Fair Trade Certified” ingredients mark is displayed on “Mark Fresh Approach Hydrating Body Cleanser.” Yet the only fair trade ingredients in this product are Honey, the eighth ingredient listed after Water, Sodium Coco Sulfate, Cocomide MEA, Sodium Lauroyl Sarcosinate, Glycol Stearate, and Hydrogenated Castor Oil-and White Tea, the thirteenth listed ingredient. These ingredients account for only two percent of the weight of the product with negligible to no function in the product. Attached as Exhibit 12 are additional product labels for the Mark lip balm and bar soap engaging in the same deception, the former appropriately enough called “the big fix”.
As in the case of Queen Helene Naturals products, Avon markets these few Mark products with minimal fair trade content in such a way as to imply that this Mark collection is committed to fair trade principles, and that the miniscule amount of fair trade content in these products is improving farmer and worker livelihoods around the world. For example, one Mark advertisement states that “Fair Trade Certification means our collection helps farmers around the globe help themselves by investing in their farms and communities .” See advertisement attached as Exhibit 13 hereto. Another advertisement for Mark products displays the TransFair “Fair Trade” mark and asserts, using language suggested and approved by TransFair, that, “By choosing this Fair Trade certified product, you are directly supporting a better life for farming families through fair prices, direct trade, community development and environmental stewardship.” See advertisement attached as Exhibit 14 hereto. This TransFair-authorized suggestion that the Mark products are themselves “Fair Trade Certified,” again, is wholly misleading and deceptive given that the few ingredients so certified represent a minimal portion of the products' contents.
A consumer seeking “fair trade” personal care products expects that products so marked and labeled will contain fair trade certified ingredients representing a majority the products' contents, with only a minority of the contents consisting of non-fair trade certified ingredients. That expectation is clearly frustrated through Avon's labeling and marketing practices for its Mark line. Those practices deceptively conflate products in which the majority of the content consists of fair trade ingredients, with products in which a tiny minority of content consists of such fair trade ingredients. Such practices are not only harmful to consumers but also to fair trade farmers and producers in developing countries, as “look alike” products that contain minimal fair trade ingredient content generate little demand for the commodities produced by those farmers, while competing unfairly with and thus reducing demand for genuine “Fair Trade” products and brands that do create a real market for those farmers' fair trade commodities. If USDA 95% seal organic products competed side by side with 2% organic products with an identical USDA seal, consumers would be misled into purchasing fake versus real organic products, and organic markets for organic farmers would accordingly be reduced.
TransFair itself has reinforced this deception by promoting the Mark collection as a whole as “Fair Trade.” This past August, TransFair featured Mark products as the “Fair Trade Product of the Week,” proclaiming that Mark “is now one of our favorites in the realm of body lotions, balms, creams and cleansers. We are excited to announce that Mark's latest line of body products now proudly bears the Fair Trade Certified label on their sassy pink and green bottles.” (See TransFair website page attached as Exhibit 15 hereto). In fact, this line of body products does not bear the “Fair Trade Certified” product mark and is not entitled to bear it; the line is entitled to bear only the “Fair Trade Certified” ingredient-specific mark that is in fact displayed on the products, but which looks identical to the “Fair Trade Certified” product mark.
In this way, TransFair shows how TransFair itself promotes and contributes to the consumer confusion between its two marks. TransFair is deliberately and misleadingly conflating the labeling and marketing of genuine “Fair Trade” products with products containing minimal fair trade content. TransFair is not only falsely vouching for the Mark collection as “Fair Trade,” thus misleading consumers, but TransFair is also inviting other personal care companies to avail themselves of such deceptive marketing by incorporating a small amount of fair trade content into products and paying TransFair a licensing fee for their certification mark through which TransFair will promote and advertise as “Fair Trade Certified” their products that contain minimal fair trade content, not only at point of sale but also on its website. TransFair posted on the same web page, a video touting Mark's commitment to fair trade: see http://www.youtube.com/watch?v=3fBAhNyke74&feature=related
Thus does Mark, in league with TransFair, engage in labeling and advertising practices that deceive consumers into believing that products with minimal fair trade content are actually “Fair Trade Certified” and that the Mark collection is committed to fair trade.
VI. The Misleading and Deceptive Advertising and Labeling Violates Section 5
Dr. Bronner's submits that the labeling and advertising practices set forth above violate section 5. The Commission applies a three-pronged test to determine whether advertising is deceptive: First, “there must be a representation, omission or practice that is likely to mislead the consumer. Second, we examine the practice from the perspective of a consumer acting reasonably in the circumstances. If the representation or practice affects or is directed primarily to a particular group, the Commission examines reasonableness from the perspective of that group. Third, the representation, omission or practice must be a 'material' one. The basic question is whether the act or practice is likely to affect the consumer's conduct or decision with regard to a product or service. If so, the practice is material and consumer injury is likely because consumers are likely to have chosen differently but for the deception.” Commission Policy Statement on Deception, In re Cliffdale Assocs., Inc., 103 F.T.C. 110, 170-171 (1984).
In this case, as noted, Hain/Queen Helene, Avon/Mark and TransFair have made the misleading and deceptive representation that products which contain minimal fair trade content, are themselves “Fair Trade Certified.” The advertising and labeling at issue is directed at consumers who care about purchasing products that have been produced consistent with “fair trade” practices. It is clear that consumers would necessarily and inherently be misled, by the labeling of each of these products as “Fair Trade Certified” via TransFair's mark, into believing that the product itself is so certified; and into believing that, accordingly, the majority if not all of the products' content are “Fair Trade Certified.”
The advertising and labeling practices are certainly likely to affect consumer conduct. The relevant facts concerning Dr. Bronner's products and the Queen Helene and Mark products are as follows. In Dr. Bronner's bar soaps, over 70% of the content consists of oils that are fair trade certified. Similarly in Dr. Bronner's liquid soaps, counting water 33% of the content consists of natural oils that are fair trade certified, over 70% excluding water on a dry weight basis. The comparable percentages for Queen Helene and Mark bar soaps and body washes are 2%. Thus Dr Bronner's products contain from 16 to 35 times more fair trade content than the competing Queen Helene and Mark products.
As a result of the labeling and advertising practices of Hain, Avon and TransFair, however, as described above, it is clear that a number of consumers are being induced to buy products such as the Queen Helene or Mark body washes, bar soaps and lotions instead of Dr. Bronner's products which are directly competitive, in the mistaken belief the Queen Helene or Mark products are “Fair Trade” product in the same way and to the same extent as Dr. Bronner's products-when in fact nothing could be further from the truth.
Moreover, underlying the different percentages is the gulf between what is being represented to consumers in terms of the impact on fair trade farmers and workers, and the reality of that impact. There is considerable cost and effort required to produce the main cleansing and moisturizing ingredients in personal care products from certified “fair trade” material. Dr. Bronner's has invested over $3 million of its own capital in developing fair trade coconut, palm and olive oil projects in Sri Lanka, Ghana and Palestine & Israel, respectively. In addition, Dr. Bronner's pays a significant ongoing price premium for these fair trade materials that make up the main cleansing and moisturizing ingredients in its products.
As a practical matter, the TransFair/FLO standard does not create any incentive for manufacturers of composite products, such as Hain and Avon, to make these substantial investments and pay higher ongoing prices to fair trade farmer projects that could supply materials for their actual main ingredients-because these companies can advertise their products as being “Fair Trade” without investing in and basing their main cleansing and moisturizing ingredients on fair trade materials. Rather, through the TransFair labeling scheme, these companies can simply incorporate a minor amount of a fair trade ingredient, promote their products as “Fair Trade” through TransFair's “Fair Trade Certified” ingredient mark and avail themselves of TransFair's marketing assistance, all the while conflating, in the mind of the consumer, their products with only a tiny minority of fair trade content with products in which a majority of the content is fair trade certified. The result is that the benefit that consumers think is being conferred on fair trade farmers and workers in developing countries through the purchase of these products is not in fact being conferred. Insofar as comparable products with majority fair trade content are passed over by fair trade consumers because of this bait and switch, markets for fair trade commodities and farmers are sabotaged rather than supported.
The end result is that in purchasing Queen Helene or Mark products, consumers believe they are getting and supporting something—“Fair Trade” products that consist mostly of fair trade content and that accordingly help third world farmers and workers—that those consumers are not in fact getting and supporting. For this reason, consumers are clearly being injured by the advertising and labeling practices in which Hain, Avon and TransFair are engaged.
That these practices indeed violate section 5 is further underscored by the Commission's position, in its Proposed Revised Green Guides, 75 Fed. Reg. 63552 (Oct. 15, 2010), that it is deceptive for a product to make an environmental claim in a way that suggests the claim is true of the entire product when in fact it is true only with respect to specific ingredients. The Proposed Revised Green Guide, section 260.3(c), cautions that:
(c) Overstatement of environmental attribute: An environmental marketing claim should not overstate, directly or by implication, an environmental attribute or benefit. Marketers should not state or imply environmental benefits if the benefits are negligible.
Section 260.6 of the Proposed Revised Green Guide states that:
(b) A marketer's use of the name, logo, or seal of approval of a third-party certifier is an endorsement, which should meet the criteria for endorsements provided in the FTC's Endorsement Guides, 16 C.F.R. Part 255, including Definitions (§ 255.0), General Considerations (§ 255.1), Expert Endorsements (§ 255.3), Endorsements by Organizations (§ 255.4), and Disclosure of Material Connections (§ 255.5).
(c) Third-party certification does not eliminate a marketer's obligation to ensure that it has substantiation for all claims reasonably communicated by the certification.
75 Fed. Reg. at 63600-01.
For these reasons, the advertising and labeling practices of Hain, Avon and TransFair violate section 5. OCA and Dr. Bronner's respectfully request the Commission to institute an investigation of these practices.
ORGANIC CONSUMERS ASSOCIATON
By: Ronnie Cummins, Executive Director
DR. BRONNER'S MAGIC SOAPS
By: David Bronner, President