Bad To The Bone.........

Consumers International – Press briefing

International Bad Product Awards 2007

Methodology

The International Bad Product nominations were submitted by CI member organisations and CI expert staff. The final four, including the overall winner, were chosen by the CI Secretariat and
are detailed below. Criteria for final selection included the size of the company, the global scale of sales and marketing, the direct impact on consumers, and the potential actionable change by the
corporation.

Winners

1.

Award: Bad Toys
Company: Mattel
Action: Recall of toys

Details:

Mattel recalled over 21 million toys from around the world over a five-week period in 2007, due to design faults and the use of poisonous levels of lead paint. The recall included one toy that
contained over 200 times the amount of lead permitted by US lawmakers.

Mattel CEO Robert Eckert was accused of stonewalling a US congressional investigation into the
safety of the company’s products, not acting on a request for access to the factories in question,
and not allowing key Mattel staff to be interviewed by investigators.

While at first allowing China to take the blame for substandard production, in late September
2007 Mattel appeared to admit that some defects were actually a design fault of the company’s
own making and that Mattel should be held responsible.

The company later said that this apology had been ‘mischaracterised’ and that they were, in
effect, only taking responsibility for around 11 million of the 21 million recalls.

CI says:
‘This is a classic case of avoiding accountability and shifting responsibility on a global scale.
Wherever the fault lies, the safety of consumers was compromised and this should be the full
focus of Mattel’s attention, not finger pointing and not blame dodging.’

2.

Award: Bad drinks marketing
Company: Coca-cola
Action: Repackaging tap water

Details:

Coca- Cola is undoubtedly one of the most recognised and successful brands on the planet, but
even they have pushed marketing into the realms of the ridiculous with their international bottled water – Dasani.

In 2004, Coca-Cola was forced to take Dasani, off the UK shelves after a public outcry because it
contained nothing more than tap water. As a result it’s never made it to German or French shops.

But sales of Dansani are still rising in the US and it is being strongly promoted in Brazil,
Argentina, Chile, Mexico and several other Latin American countries.

Coca-Cola itself says that Dasani isn’t spring water and that it is sourced from local tap water
supplies. But from its marketing and packaging, one could easily think otherwise. Dasani
promotional material gushes with terms like:

‘Filtered for purity using state of the art processes’ and ‘enhanced with a special blend of minerals for a pure, crisp, fresh taste’

What is doesn’t say quite as loudly is that Dasani comes from the same local municiple reservoirs as the water out of the tap.

Coca-Cola is not doing anything illegal, but advertising which suggests their bottled water is
significantly superior to local tap water is misleading. They are simply repackaging in plastic
containers a common resource and charging consumers hundreds to thousands of times what it
would cost out of the tap.

CI says

‘Sustainable access to essential services, such as water, is a basic consumer right. By bottling up this universal resource to sell back to us, corporations, such as Coca-Cola have created a
US$100 billion industry at a time when one billion people in the world lack access to safe drinking water. Making profits out of increasingly fragile water supplies is unsustainable, irresponsible and against the basic rights of consumers everywhere.’

3.

Award: Bad food
Company: Kellogg’s
Action: Advertising junk food to kids

Details:

Kellogg’s is known the world over for its breakfast cereals. The company had net global sales of
US$10.9 billion in 2006 and spent US$916million on advertising.

Key to Kellogg’s success has been the use of some of the most persistent and persuasive
marketing methods to children. Kellogg’s recently told The New York Times that 27% of its US
advertising budget was spent promoting products aimed at the under 12s.

In Australia, Kellogg’s previously used a popular children’s entertainer to publicise Coco Pops,
and used online social-networking techniques aimed at kids. They recently promoted unhealthy
Coco Pops and Rice Bubbles with a Shrek promotion and produced boxes of Green fruit loops
and added green candy pieces ‘ogre bits’ to their Coco Pops LCM bars.

In New Zealand, Kellogg’s Crispix have come with Star Wars stickers and Ice Age 2 DVD
giveaways in recent years. Coco Pops has a competition kids can enter as often as they like –
provided you keep buying the product. Prizes up for grabs include quad bikes, and Apple iPods.

In the UK, there have been Coco Pops tie-ins with Dreamwork’s cartoon motion picture Flushed
Away. Frosties, Cornflakes and Rice Crispies packaging has been covered in Shrek imagery and
offers of free cinema tickets for children.

But the issue here is not only how they market, but what they market.

Kellogg’s are one of a number of international food companies that make money by selling
products high in fat, sugar and/or salt. Threatened with litigation in the US, Kellogg’s have agreed to change some of their marketing practices, however we believe they are doing too little, too slowly.

Examples from around the world of Kellogg’s contribution to our children’s diets include:

Rice Bubbles in Australia – containing 720mg of salt per 100mg
Kellogg’s cereals in France - 33% sugar
Coco Pops in Australia – 36.5% sugar
Frosties in the UK – 37% sugar
Frosted Flakes in Mexico – 40% sugar.

Food containing 20% sugar is deemed as ‘high’ in sugar content by many leading authorities.

CI members have campaigned against the marketing of Kellogg’s high sugar content products
with success in Australia, the UK and Mexico.

Earlier this year, El Poder del Consumidor, one of CI’s members in Mexico successfully
campaigned to have the TV advert for Kellogg’s Frosted Flakes taken off the air. The advert
claimed that children would develop amazing physical attributes when in fact the cereal contains
40% sugar. An invaluable success in a country that is second only to the US in terms of obese
and overweight people.

CI says:

‘CI is committed to stopping the marketing of junk food to children. Together with our membership we are campaigning for international restrictions on marketing to under 16’s, to give our children the chance of a healthy start’.

4.

OVERALL WINNER

Award: Bad Drug promotion
Company: Takeda Pharmaceuticals
Action: Advertising sleeping pills to children

Details:

The US subsidiary of Japanese drug firm Takeda Pharmaceutical took out a TV advertisement in September 2006 for its sleeping drug Rozerem. It was a ‘reminder’ ad which, under US direct-toconsumer advertising (DTCA) law, pharmaceutical companies can use to keep consumers aware of the need to buy their drugs.

This particular ad was released at the beginning of the school year and used images of children,
chalk boards, school books and a schools bus. The accompanying voiceover stated:

“Rozerem would like to remind you that it’s back to school season. Ask your doctor today if
Rozerem is right for you.”

Under the tagline ‘Back to School’

It doesn’t take a PhD in marketing to see that this is an effort to persuade parents to seek out the sleeping drug for their children – to help them get through the stress of term starting.

The advertisement ran without noting the very serious side effects that this drug can have,
including increased thoughts of suicide in already depressed patients. Takeda pharmaceuticals
also failed to mention the precautions on its packaging about children using this drug. According
to the product labelling:

PRECAUTIONS (relating to pediatric use)
Use in Adolescents and Children
ROZEREM has been associated with an effect on reproductive hormones
in adults….It is not known what effect chronic or even chronic intermittent
use of ROZEREM may have on the reproductive axis in developing
humans.

Pediatric Use
Safety and effectiveness of ROZEREM in pediatric patients have not been
established. Further study is needed prior to determining that this product
may be used safely in pre-pubescent and pubescent patients.

That such a potentially harmful drug should be geared towards young children is outrageous.
Almost as outrageous was the token action taken by the Food and Drugs Agency (FDA) – the
body that regulates pharma company behaviour in the US:

It took six months for the FDA to tell Takeda to remove the ad - long after the relevance of a ‘back to school’ promotion had gone. Takeda is a US$10 billion dollar pharmaceutical company. It spent $118 million on advertising ROZEREM last year, yet the FDA issued no fine and no
penalty. Just a slap on the wrist.

CI says:

‘This case demonstrates the lengths to which some drug companies will go to increase sales of
their products, how direct to consumer advertising can promote irrational drug use, and how weak regulation can foster irresponsible corporate behaviour. This company is our overall award winner for irresponsible behaviour for 2007.’