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SATURDAY FEATURE
 
Food groups get a taste of fear
Jeremy Grant
3/5/2005
 

          Pam Murtaugh holds up some packaging with a picture of a seven-year old boy on it. He is relaxing in a "video rocking chair", which resembles a child's car seat but is curved so it can rock back and forth on the ground. He holds a television remote control. And he is clearly overweight.
The box is evidence, says Ms Murtaugh, who owns a Wisconsin-based management consultancy, that obesity is so pervasive that household goods manufacturers are aiming products at the parents of overweight children.
She was speaking at a recent conference on obesity organised in New York by UBS, the Swiss financial services group, aimed at assessing the impact of America's obesity problem on its food and drinks companies. "It is just such a clear statement of what's happening to us," she told the conference.
While the issue of obesity in the US is clear -- about 30 per cent of Americans can be considered obese -- the legal implications for food and soft drinks companies are also clarifying.
Companies such as General Mills, Kellogg's, McDonald's, Kraft Foods and Coca-Cola are at risk from tobacco-style obesity lawsuits even as they step up efforts to remove fatty ingredients from their products, embrace wholefood diet programmes and scale back advertising junk food to children, panellists at the conference warned.
Attorneys-general in the US, encouraged by success against tobacco companies, now have the food companies in their sights.
"The attorneys-general will be the cutting [edge] force in the obesity argument," says Robert Merrell, a former governor and attorney-general of New Hampshire, now president of Bingham Consulting, a Washington DC group.
He believes attorneys-general are willing to co-operate across states in the US to bring cases against another industry with "deep pockets." They are also armed with "broad consumer powers without statutory back-up" as well as the incentive of acting for clients on a contingent-fee basis.
Discussion about obesity lawsuits died down after the dismissal in 2003 of a case brought by two New York teenagers against McDonald's, seeking billions of dollars in damages for allegedly hiding the health risks of Chicken McNuggets. But last January, the spectre of "McLawsuits" returned after a US appeals court re-opened part of the landmark Pelman vs McDonald's case, arguing it had been dismissed without hearing enough evidence. Specifically, there had been insufficient scope for "discovery" -- the process of soliciting from plaintiffs and defendants documents and other testimony that might shed light on the case.
Uppermost in the minds of food and soft drinks company management is likely to be whether there are Similarities between tobacco and food that might encourage attorneys-general.
Richard Berman, executive director of the Centre for Consumer Freedom, a non-profit coalition of restaurants, food companies and consumers, believes there is no correlation. He told the conference: "The biggest problem tobacco ran into was that people began to perceive that tobacco companies were lying to them. I don't think we're there yet with food companies". Others pointed out there is no "safe" tobacco,, whereas there is plenty of harmless food.
Indeed, opinion polls at the time of the Pelman v McDonald's case showed that more than 80 per cent of the US public thought the case was frivolous. McDonald's maintains it remains so, and says the issue is still personal choice over what we eat.
However, attorneys-general, many of them elected, are sensitive to the possibility that public opinion could turn. In that case, they might feel more able to sway juries in any obesity cases, some panellists argued. Worryingly for the food companies, it seems that some parallels between tobacco and food can be drawn. One is that it was largely thanks to discovery that the tobacco companies were forced to settle, after incriminating evidence was made public.
Richard Daynard, professor of law at Boston's North-eastern University, believes decision last January to reopen part of the Pelman v MeDonald's case to allow discovery was "a tremendous step that says discovery is necessary". He told the conference: "Discovery in turn may provide materials that would help change public attitudes toward these cases."
Potentially more explosive is a link between children and vending machines in schools. The Centre for Science in the Public Interest, a non-profit group, says there are 3.0m snack foods and drink vending machines in the US -- or one for every 100 people. Their widespread presence in schools has been blamed for contributing to childhood obesity.
According to Merrell, vending machines could provide the crucial "hook" attorneys-general may be looking for to launch cases. "It is difficult to predict where the attorneys-general will go but the tobacco case' became incendiary when children were tied to it."
Kenneth McClain, a lawyer with Missouri-based Humphrey, Farrington & McClain, says the fact that food and drinks companies were not acting to address the issue of easy access to vending machines by children was itself a basis of liability: "If health effects come forward, liability will attach over time."
Merrell says attorneys general were likely to focus on the cost to their states of maintaining Medicaid payments to low-income patients with obesity-related diseases: "Attorney-general lawsuits remove the obese person from the litigation and substitute financial loss to the state's finances." Obesity-related conditions were lifelong conditions "with staggering costs", he said. Medicaid pays regardless of fault. States will focus on whether the food industry's advertising and marketing adequately identified the risks of the product. Compensation would be calculated by looking at the advertising and marketing budgets of defendant companies as a way of gauging what a corporation should pay "to redress the wrong".
Decision last January to revisit one part of Pelman v McDonald's was followed by a flurry of announcements by food companies of healthier products, partly in response to new US government dietary guidelines. Hamburger chain Wendy's now has fruit at all its US restaurants, while Green Giant, the canned vegetable unit of General Mills, launched a web-based campaign called "Mix-Up Dinner: Get Your Greens!". But the move that won the most praise was Kraft Foods' voluntary pledge to stop advertising certain junk foods to the under-11s.
At the meeting Laurian Unnevehr, professor in the department of agricultural and consumer economics at the University of Illinois at Urbana- Champaign, did question the motivation of such moves. "It is not clear whether this is a marketing strategy or a legal strategy to enable you to say 'I gave consumers, the right choice'."
Benson argues that changing menus and developing healthy food lines was not enough and that companies had to become more aggressive in countering attacks from obesity lobby groups: "My concern is that, from a defence point of view, public opinion is a driver of outcomes in courtrooms. Companies have not figured out how to play offence on the public policy [area]."
Whatever the tactics employed, Merrell says, the issue had already assumed urgency. "There seems to be a lack of appreciation that the train is already going down the track. The light at the end of the tunnel is the oncoming train."

 

 
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