[Federal Register Volume 59, Number 215 (Tuesday, November 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27569]
[[Page Unknown]]
[Federal Register: November 8, 1994]
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FEDERAL TRADE COMMISSION
[File No. 902-3304]
Bee-Sweet, Inc., et al.; Proposed Consent Agreement With Analysis
to Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval, would
prohibit, among other things, a North Carolina corporation and its
officer from representing that bee pollen products are effective as a
cure or in mitigating certain conditions and physical ailments, and
from misrepresenting the existence, contents, validity, results,
conclusions, or interpretations of any test or study.
DATES: Comments must be received on or before January 9, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.
FOR FURTHER INFORMATION CONTACT: Ronald Waldman, FTC/New York Regional,
150 William S., Suite 1300, New York, N.Y. 10038. (212) 264-1242.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the following consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of
Practice (16 CFR 4.9(b)(6)(ii)).
Agreement Containing Consent Order to Cease and Desist
In the Matter of: Bee-Sweet, Inc., a corporation; and Benny G.
Morgan, individually and as an officer and director of said
corporation.
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Bee-Sweet, Inc., a corporation, and Benny
G. Morgan, individually and as an officer of said corporation,
hereinafter sometimes referred to as proposed respondents; and it now
appearing that proposed respondents are willing to enter into an
agreement containing an order to cease and desist from the acts and
practices being investigated.
It is hereby agreed by and between proposed respondents, and their
attorney, and counsel for the Federal Trade Commission that:
1. Proposed respondent Bee-Sweet, Inc. is a corporation organized,
existing, and doing business under and by virtue of the laws of the
State of North Carolina, with its office or principal place of business
located at 10370 North, NC Highway 150, Clemmons, North Carolina 27012.
2. Proposed respondent Benny G. Morgan is an officer of said
corporation. Individually and in concert with others, he formulates,
directs, and controls the acts and practices of corporate respondent.
Respondent Benny G. Morgan's business address is 10370 North, NC
Highway 150, Clemmons, North Carolina 27012.
3. Proposed respondents admit all the jurisdictional facts set
forth in the draft of complaint here attached.
4. Proposed respondents waive:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law; and
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement.
5. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission, it, together with the attached
draft complaint, will be placed on the public record for a period of
sixty (60) days and information in respect thereto publicly released.
The Commission thereafter may either withdraw its acceptance of this
agreement and so notify the proposed respondents, in which event it
will take such action as it may consider appropriate, or issue and
serve its complaint (in such form as the circumstances may require) and
decision, in disposition of the proceeding.
6. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondents of facts, other than
jurisdictional facts, or of violations of law as alleged in the draft
of complaint here attached.
7. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
Rules, the Commission may, without further notice to proposed
respondents: (1) issue its complaint corresponding in form and
substance with the attached draft of complaint and its decision
containing the following order to cease and desist in disposition of
the proceeding; and (2) make information public in respect thereto.
When so entered, the order to cease and desist shall have the same
force and effect and may be altered, modified, or set aside in the same
manner and within the same time provided by statute for other orders.
The order shall become final upon service. Delivery by the U.S. Postal
Service of the complaint and decision containing the agreed-to order to
respondents' addresses as stated in this agreement shall constitute
service. Proposed respondents waive any right they might have to any
other manner of service. The complaint may be used in construing the
terms of the order, and no agreement, understanding, representation, or
interpretation not contained in the order or in the agreement may be
used to vary or contradict the terms of the order.
8. Proposed respondents have read the proposed complaint and order
contemplated hereby. They understand that once the order has been
issued, they will be required to file one or more compliance reports
showing that they have fully complied with the order. Proposed
respondents further understand that they may be liable for civil
penalties in the amount provided by law for each violation of the order
after it becomes final.
Order
Definitions
For purposes of this order, the following definitions shall apply:
A. ``Bee pollen product'' shall mean any product intended for human
consumption or use consisting in whole or in part of bee pollen and/or
bee propolis in any form.
B. ``Competent and reliable scientific evidence'' shall mean tests,
analyses, research, studies, or other evidence based on the expertise
of professionals in the relevant area, that has been conducted and
evaluated in an objective manner by persons qualified to do so, using
procedures generally accepted in the profession to yield accurate and
reliable results.
It is ordered that respondents Bee-Sweet, Inc., a corporation, its
successors and assigns, and its officer, Benny G. Morgan, individually
and as officer of said corporation, and respondents' agents,
representatives, and employees, directly or through any corporation,
subsidiary, division, or other device, in connection with the
manufacturing, labeling, packaging, advertising, promotion, offering
for sale, sale, or distribution of any bee pollen product in or
affecting commerce, as ``commerce'' is defined in the Federal Trade
Commission Act, do forthwith cease and desist from representing, in any
manner, directly or by implication, that:
A. Consumption of any bee pollen product is effective in the cure
or mitigation of: (1) Allergies, (2) arthritis, (3) anorexia, (4)
obesity, (5) fatigue, (6) arteriosclerosis, (7) anemia, (8) lack of
sexual stamina, (9) back pain, (10) digestive disorders, (11) pulse
irregularities, (12) acne, (13) bleeding, (14) burns, (15) colds, (16)
sore throats, (17) tonsillitis, (18) ulcers, or (19) urinary
infections.
B. Any bee pollen product is an effective antibiotic for human use.
II
It is further ordered that respondents Bee-Sweet, Inc., a
corporation, its successors and assigns, and its officer, Benny G.
Morgan, individually and as officer of said corporation, subsidiary,
division, or other device, in connection with manufacturing, labeling,
packaging, advertising, promotion, offering for sale, sale, or
distribution of any product or service for human consumption or use in
or affecting commerce, as ``commerce'' is defined in Federal Trade
Commission Act, do forthwith cease and desist from making any
representation, in any manner, directly or by implication, that any
such product or service for human consumption will have any effect on a
user's health or physical condition, unless at the time of making such
representation respondents possess and rely upon competent and reliable
scientific evidence that substantiates the representation.
III
It is further ordered that respondents Bee-Sweet, Inc., a
corporation, its successors and assigns, and its officer, Benny G.
Morgan, individually and as an officer of said corporation, and
respondents' agents, representatives, and employees, directly or
through any corporation, subsidiary, division, or other device, in
connection with the manufacturing, labeling, packaging, advertising,
promotion, offering for sale, sale, or distribution of any product or
service for human consumption or use in or affecting commerce, as
``commerce'' is defined in the Federal Trade Commission Act, do
forthwith cease and desist from misrepresenting, in any manner,
directly or by implication, to existence, contents, validity, results,
conclusions, or interpretations of any test or study.
IV
Nothing in this order shall prohibit respondents from making any
representation that is specifically permitted in labeling for any bee
pollen product by regulations promulgated by the Food and Drug
Administration pursuant to the Nutritional Labeling and Education Act
of 1990.
V
Nothing in this order shall prohibit respondents from making any
representation for any drug that is permitted in labeling for any such
drug under any tentative final or final standard promulgated by the
Food and Drug Administration, or under any new drug application
approved by the Food and Drug Administration.
VI
It is further ordered that respondents, or their successors and
assigns, within thirty (30) days of the date of service of this order,
shall send to each person or company that purchased for resale any bee
pollen product from any respondent during the twelve (12) month period
preceding the date of issuance of this order, a letter in the form set
forth in Appendix I hereto. Each such letter shall be sent via the
United States Postal Service, first class mail, postage pre-paid, to
the last known address of the intended recipient.
VII
It is further ordered that for three (3) years after the last date
of dissemination of any representation covered by this order,
respondents, or their successors and assigns, shall maintain and upon
request make available to the Federal Trade Commission for inspection
and copying:
A. All materials that were relied upon in disseminating such
representation; and
B. All tests, reports, studies, surveys, demonstrations, or other
evidence in their possession or control that contradict, qualify, or
call into question such representation, or the basis relied upon for
such representation, including complaints from consumers.
VIII
It is further ordered that:
A. Within thirty (30) days of the date of service of this order
respondents shall distribute a copy of this order to respondents'
officers, agents, representatives, and employees engaged in the
marketing or sale of any bee pollen product.
B. For a period of seven (7) years from the date of service of this
order respondents shall distribute a copy of this order to each of
respondents' officers, agents, representatives, and employees who
become engaged in the marketing or sale of any bee pollen product. Such
distribution shall be made within three (3) days of each such person's
becoming so engaged.
IX
It is further ordered that:
A. Respondents shall notify the Federal Trade Commission at least
thirty (30) days prior to any proposed change in the corporate
respondent such as dissolution, assignment, or sale resulting in the
emergence of a successor corporation, creation or dissolution of a
subsidiary, or any other change in the corporation that may affect
compliance obligations arising out of this order;
B. For seven (7) years from the date of service of this order,
Benny G. Morgan shall notify the Federal Trade Commission within thirty
(30) days of the discontinuance of his present business or employment
and of his new business or employment the activities of which include
the advertising, offering for sale, sale, or distribution of: (1) any
bee pollen product or (2) any product or service advertised, offered
for sale, sold, or distributed for effect on a user's health or
physical condition. Each such notice shall include Benny G. Morgan's
new business address and a statement of the nature of the business or
employment in which he is newly engaged as well as a description of his
duties and responsibilities in connection with the business or
employment.
X
It is further ordered that respondents shall, within sixty (60)
days of the date of service of this order, file with the Federal Trade
Commission a report, in writing, setting forth in detail the manner and
form in which they have complied with this order.
Appendix I
(To be Printed On Bee-Sweet, Inc. Letterhead)
[Date]
Dear Customer, We at Bee-Sweet have voluntarily entered into an
agreement with the Federal Trade Commission (``FTC''). We have
agreed to a cease and desist order under which we are writing to
each of our purchasers for resale of bee pollen products. The
purpose of this letter is to inform you that according to the FTC,
health claims previously made by Bee-Sweet for bee pollen products
are unsubstantiated by competent and reliable scientific evidence
and, according to the FTC, are false.
The FTC order requires that for any representation to be made
that a product or service will affect a user's health or physical
condition, we must have competent and reliable scientific evidence
that substantiates the representation. Bee-Sweet's promotional
literature must comply with these FTC requirements.
Sincerely, Benny G. Morgan, President, Bee-Sweet, Inc.
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, an agreement to a proposed Consent Order from Bee-Sweet, Inc.
and its principal, Benny G. Morgan.
The proposed Consent Order has been placed on the public record for
sixty (60) days for receipt of comments by interested persons. Comments
received during this period will become part of the public record.
After sixty (60) days, the Commission will again review the agreement
and the comments received and will decide whether it should withdraw
from the agreement or make final the agreement's proposed order.
This matter concerns advertising for Bee-Sweet's bee pollen and bee
propolis products. The Commission's complaint charges that the
respondent's advertising contained false and unsubstantiated claims, in
violation of Sections 5 and 12 of the FTC Act.
In particular, the complaint alleges that the Bee-Sweet ads falsely
claim that bee pollen is effective in the mitigation or treatment of:
(1) Allergies, (2) arthritis, (3) anorexia, (4) obesity, (5) fatigue,
(6) arteriosclerosis, (7) anemia, (8) lack of sexual stamina, (9) back
pain, (10) digestive disorders, and (11) pulse irregularities. The
Complaint further alleges that the ads falsely claim that competent and
reliable scientific studies have proven that consumption of bee pollen
is effective in the mitigation and treatment of numerous diseases and
conditions, including: (1) Allergies, (2) athrities, (3) anorexia, (4)
obesity, (5) fatigue, and (6) arteriosclerosis.
The Complaint also alleges that the Bee-Sweet ads contain false
claims that bee propolis is effective in the mitigation or treatment
of: (1) Acne, (2) allergies, (3) bleeding, (4) burns, (5) colds, (6)
sore throats, (7) tonsillitis, (8) ulcers, and (9) urinary infections;
that bee propolis is an effective antibiotic for human use; and that
competent and reliable scientific studies have proven that consumption
of bee propolis is effective in the mitigation and treatment of ulcers.
The Complaint finally alleges that Bee-Sweet implied that it had a
reasonable basis for each of the above claims. According to the
Complaint, Bee-Sweet did not have a reasonable basis for making these
claims.
Paragraph I of the Order prohibits respondents from claiming that
consumption of any bee pollen product is effective in the mitigation or
treatment of the above conditions and ailments, or that any bee pollen
product is an effective antibiotic for human use.
Paragraph II of the Order prohibits Bee Sweet from representing
that a product or service will affect a user's health or physical
condition unless, at the time of making the representation, it has and
relies upon competent and reliable scientific evidence that
substantiates the representation.
Paragraph III of the Order requires respondents to cease and desist
from misrepresenting the existence, contents, validity, results,
conclusions, or interpretations of any test or study.
Paragraph IV of the Order provides that nothing in the order shall
prohibit respondents from making any representations specifically
permitted in labeling for any bee pollen product by regulations
promulgated by the Food and Drug Administration pursuant to the
Nutrition Labeling and Education Act of 1990.
Paragraph V of the Order provides that nothing in the order shall
prohibit respondents from making any representation for any drug that
is permitted in labeling for any such drug under any tentative final or
final standard promulgated by the Food and Drug Administration, or
under any new drug application approved by the Food and Drug
Administration.
Paragraph VI of the order requires respondents to send, to each
person or company that purchased respondent's bee pollen product for
resale within the twelve month period preceding the date of issuance of
the order, a notice regarding the FTC findings.
The remainder of the Order contains standard record-retention and
notification provisions.
The purpose of this analysis is to facilitate public comment on the
proposed Order. It is not intended to constitute an official
interpretation of the agreement and proposed Order or to modify in any
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-27569 Filed 11-7-94; 8:45 am]
BILLING CODE 6750-01-M
