Food Business News - November 8, 2011 - 10

Appellate court dismisses food labeling lawsuit
General Mills, Kellogg found to be compliant with current regulations
CHICAGO — Judge Richard Posner of the U.S. Court of Appeals for the Seventh Circuit in Chicago dismissed a lawsuit ﬁled by consumer Carolyn Turek regarding food labeling on ﬁber bars produced by General Mills, Inc. and Kellogg Co. In her suit, Ms. Turek claimed the companies did not disclose that the bars contained a form of processed ﬁber that is inferior to natural ﬁber. Additionally, she alleged the labels did not disclose that the bars may cause certain health problems, an allegation both companies denied. In his opinion, Judge Posner wrote that current legislation does not require companies to disclose that processed ﬁber offers fewer health beneﬁts than natural ﬁber. And while states may ask for certain exemptions under the federal law, Illinois never obtained one to impose stricter standards. “It is easy to see why Congress would not want to allow states to impose disclosure requirements of their own on packaged food products, most of which are sold nationwide,” Judge Posner wrote. “Manufacturers might have to print 50 different labels, driving consumers who buy food products in more than one state crazy.” Judge Posner said the labeling of Fiber Plus bars, Fiber One bars and Judge Posner wrote. “The information required by federal law does not include disclosing that the ﬁber in the product includes inulin or that a product containing inulin produces fewer health beneﬁts than a product that contains only ‘natural’ ﬁber, or that inulin from chicory root should not be consumed by pregnant or lactating women. “The only mention of inulin that we have found in a federal regulation appears in a regulation issued by the Department of Agriculture that lists inulin as one of the ‘nonorganically produced agricultural products (that) may be used as ingredients in or on processed products labeled as organic.’” Judge Posner concluded his remarks by noting that not all of the issues presented by Ms. Turek were addressed in the opinion because some were “frivolous, insufﬁciently explained in her briefs to be intelligible, or forfeited because they were not presented in the district court.” Responding to the decision, General Mills said, “We are pleased that the Appellate Court agreed with the District Court ruling, dismissing this matter with prejudice.” FBN

other products challenged in the lawsuit is compliant with current regulations relating to health claims for dietary ﬁbers. “The disclaimers that the plaintiff wants added to the labeling of the defendants’ inulin-containing chewy bars are not identical to the labeling requirements imposed on such products by federal law, and so they are barred,”

Core business performs solidly at Sara Lee
Amid focus on corporate split, strength seen in coffee/tea and meat segments
DOWNERS GROVE, ILL. — Adjusted operating income of Sara Lee Corp. in the ﬁrst quarter ended Oct. 1 was $182 million, up 4% from $175 million in the ﬁrst quarter of ﬁscal 2011. Adjusted sales were $1,900 million, up 6% from $1,798 million. In the midst of completing the sale of two of its baking divisions and splitting the remaining company into two separate businesses, Sara Lee’s results for the quarter were heavily affected by the transformation in process. The company sustained a net loss of $215 million in the quarter, compared with net income of $194 million, or 29c per share on the common stock, in the ﬁrst quarter of ﬁscal 2011. Sales were $1,943 million, up 13%. Adjusted net income in the ﬁscal 2011 quarter was $129 million, equal to 21c per share. Sara Lee sustained a quarterly loss of $181 million in the quarter on discontinued operations. In particular, Sara Lee took a $371 million impairment charge relating to its Spanish and French baking businesses, to be sold to Grupo Bimbo S.A.B. de C.V. Adjusted operating income of the Sara Lee Coffee & Tea segment was $121 million, up 20% from $101 million in the ﬁrst quarter last year. Sales were $906 million, up 14% from $793 million. Sara Lee touted a “strong rebound” for the coffee/tea business in the quarter. The sales gain was helped by a 32% increase in marketing, advertising and promotion spending. Pricing and mix contributed 14% and 4%, respectively, to the sales gain while volume fell by 3%. “The success of the L’Or EspressO capsules, continued good performance of Senseo in Spain and France and the termination of private label production in France each contributed to positive mix growth,” the company said. “Price increases were enacted in multiple markets to offset commodity price increases in ﬁscal 2011.” The company said price increases and cost savings were expected to offset higher commodity prices in ﬁscal 2012 and beyond, “barring any unforeseen commodity spikes.” In the North American Foodservice and Specialty Meat division, operating income was $27 million, up 7% from $25 million in the quarter ended Oct. 1. Sales were $280 million, up 2%. The segment, newly named, includes the food service meat and bakery business in North America. Sara Lee said top-line growth was “solid,” bolstered by pricing actions. Volume rose 2%, helped by the acquisition of the Aidells business. Excluding the acquisition, volume fell 2%. The acquisition exceeded expectations in the quarter, Sara Lee said. FBN

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November 8, 2011

Food Business News - November 8, 2011

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