Juice Plus + fined €1m for illegal supplement selling on ‘secret’ Facebook groups
The fine was imposed after the AGCM found evidence of wrongdoing that saw its salespeople pose as consumers, who then went on to describe a range of benefits linked to its products that included food and slimming supplements as well as Juice Plus + meal replacements.
The companies were also accused of failing to exhibit professional diligence in overseeing their sales force after a raid at the group’s Italian offices found salespeople being trained in these illegal practices.
‘Secret’ online groups
“The sales strategy adopted by Juice Plus encourages the sharing of consumer experiences that are not necessarily authentic,” the AGCM said in its ruling on 27 March.
“Specifically, a form of hidden marketing was carried out, mainly through Facebook pages and secret groups, where it was not made clear that Juice Plus product sellers acted within the framework of their commercial activity.
“Secondly, the deception of the product information was determined that included their slimming and curative efficacy.
“The products wrongly provided assurances that it was possible to recover from certain pathologies or to achieve significant weight loss in a short time.”
The group, which have been described as a “multilevel marketing group” was the subject of a TV investigation in 2017 that looked into its use of salespeople or “food coaches” in the marketing of its products.
The investigation, which was featured on the TV show ‘Patti Chiari (in Italian)’ found a total of 600 of these secret groups on Facebook in Italy alone, where these salespeople posed as satisfied customers, who freely gave out advice.
These “coaches” assured users of a "new healthy lifestyle", highlighting the products’ "natural" credentials based on "proper nutrition".
Combined with "physical activity", these coaches spoke of their products’ health benefits, which would reshape the body and promote weight loss.
Separate registered firms
Further evidence of the group’s deception was the discovery that each of the connected companies linked to the Juice Plus+ brand were registered in separate countries.
One was registered under UK law (The Juice PLUS + Company Ltd / The Juice Plus + Company LLC), one under Italian law (The Juice PLUS + Company Srl) and one under German law (The Juice Plus + Company Europe GmbH).
While the companies claimed that only the Italian subsidiary was liable, the AGCM decided otherwise. The group now have 60 days to appeal the decision.
“In the EU, it is not common to see fines of this entity levied on companies for misleading advertising. It will be important to see if Italy's AGCM follows up with businesses operating with a similar strategy,” said Luca Bucchini, managing director of Hylobates Consulting, a firm specialising in risk assessment (microbial and chemical) and regulatory consulting (labelling and claims) in the food and cosmetic sector.
“In the past, the AGCM was consistent in its approach to a certain sector, while in recent years it seems to have been unable to take a comprehensive approach.
‘One of the highest fines imposed’
He added that while some observers noted the fine was a small fraction of the group's turnover, and the misleading claims were not the only driver of the ruling, it was probably one of the highest fines imposed for misleading information on food in the EU.
Financial statements disclosed by The Juice PLUS + Company, The Juice PLUS + Company Ltd, The Juice Plus + Company Europe GmbH and The Juice Plus + Company LLC revealed a turnover of €70m, €140m, between €170m and €230m and between €200m and €400m respectively.
“It is important to note that the argument that the Facebook groups were of a "private" nature was rejected, and that the spreading of misleading, unauthorised or medicinal claims on social media - as opposed to traditional advertising - was seen as making the violation more serious,” Bucchini pointed out.
“Not all food businesses understand that social media are vital for marketing, but are not shielded from applicable legislation and from enforcement - although we will be watching what judges on appeal find.
“There is also an important argument on which the AGCM has been weighing for some years: companies need to oversee their sales force, even if sales people are not directly employed,” he added.
Juice Plus + did not respond to our request for comment in time for the publication of this article.
