Dear Laissez Faire Today Reader,
The larger and more powerful the government becomes, the more business kowtows to the regulators, out of fear mainly. But there are exceptions and I am particularly inspired by this one.
POM Wonderful is a pomegranate juice that tastes great and has that scrunch-up-your-mouth effect that you get with a bold dry red wine. When I was a kid, it didn’t exist. Like everything wonderful in this world, it comes to us because of the grand beneficence of human volition and entrepreneurial enterprise, that is, people helping people to have a better life.
The company was founded only 12 years ago, and its owners are doing just fine, thank you, and the customers are gleeful to have a way to consume these fruits without having to crack the hard shell, dig through all those horrible seeds and stain their hands and clothes.
But that’s not why I’m writing about POM. What’s especially great is how the company pushed the envelope with its health claims. They’ve been extremely specific on the benefits for the heart, prostate, longevity and every other thing you can imagine and some you don’t want to think about. The owners and entrepreneurs, Stewart and Lynda Resnick, are true believers and great ambassadors for their product.
Especially Lynda. She is a “force of nature,” as one person put it. She believes in this stuff. In fact, she is a fanatic. She lives and breathes the juice. No surprise: serious entrepreneurs love their products, probably more than any one of their customers.
In interviews and in advertising, POM smashed through a barrier with all these claims. These days, the government has nearly every food and drink manufacturer terrified to even mention what its makers regard as the health benefits of its product. They fear being dragged through the bureaucracy and facing some awful government judge.
Why isn’t this an imposition on free speech? It is, and it’s bad for consumers too. We are left to guess or search the Internet while shopping just to figure out ways in which our diet relates to our health. Or we have to visit some witch doctor at the local health food store who thinks we should eat eye of newt or soak our feet in some crazy fluid to become pure, or something like that.
I always have the feeling these days that lots of information — important information that the manufacturer wants me to know — is being hidden from me by regulations.
POM not only tore through this regulatory barrier; the company poured tens of millions into funding scientific studies that no one else wanted to do. That’s serious. Sure enough, these studies have proven what the owners suspected. This is good stuff. No, it is not magic, but nothing is. As far as a drink is concerned, this is healthy juice. It beats soda.
But of course, the government didn’t like what POM was saying and came after the company. Rule of thumb: if something is exciting, new, popular, and profitable, there’s a government lawsuit in the making that is planning to end it all. That’s the role of government these days, to be the monkey wrench thrown in the wheel of progress.
First it was the Food and Drug Administration, which said that its health claims suggest that the juice needs to be regulated like a drug, in which case it has to face what other drug makers face. Then the Federal Trade Commission got involved and said that its advertising claims amount to deception of the consumer.
POM never backed down. It fought all the way through, and continues to fight even after the ruling on May 22, 2012. The press reported that POM lost miserably, and cited the result of a 20-year cease and desist order. That’s very puzzling because here is what the FTC judge actually said:
“Competent and reliable scientific evidence supports the conclusion that the consumption of pomegranate juice and pomegranate extract supports prostate health, including by prolonging PSA doubling time in men with rising PSA after primary treatment for prostate cancer”
“Pomegranate juice is a natural fruit product with health-promoting characteristics. The safety of pomegranate juice is not in doubt”
“Competent and reliable scientific evidence shows that pomegranate juice provides a benefit to promoting erectile health and erectile function.”
At the same time, said the judge, “The greater weight of the persuasive expert testimony demonstrates that there is insufficient competent and reliable scientific evidence to substantiate claims that the Pom products treat, prevent or reduce the risk of erectile dysfunction or that they are clinically proven to do so.”
Do you see the subtle difference here between reducing risk of dysfunction and promoting function? I’m not entirely sure that I do. Sounds like legalistic baloney to me. And it is any surprise that a dedicated entrepreneur would be a bit hyperbolic about the product he or she is promoting? This seems like a clear case of harassment of a business, not prevention of fraud. Pomegranate juice never hurt anyone. And all these studies do indeed show that it promotes health. So whatever.
POM put its company on the line and staked everything on its right to get consumers information about its products, information that people want and need. Would-be customers are free to look up the claims for themselves and decide. Consumers can reject the claims if they find them crazy and cranky, or embrace them completely. It’s up to the buyer. But shouldn’t people be entitled to know things that businesses want to tell them? One might suppose so.
POM believes that there was more at stake in this hearing than just its business and its health claims. The company believes that the FTC/FDA were preparing the ground to regulate all health products as drugs that should be subject to the entire regulatory control of the government. That would be absolutely catastrophic. Imagine!
In this respect, says the company, “the FTC tried to create a new, stricter industry standard, similar to that required for pharmaceuticals, for marketing the health benefits inherent in safe food and natural food-based products. They failed.”
The company has been fabulously and delightfully defiant and brassy in the face of all this intimidation. In response to the ruling, the company said, “Although we disagree with the finding that some of our ads were potentially misleading, Roll Global will make appropriate adjustments if necessary to prevent that impression in the future.”
Catch that? It will make “adjustments if necessary.” If! Love it!
At least one enterprise in America is not willing to curl up into a tiny ball and beg for life when faced with government harassment. Not only that — and this is even better — the company rightly saw that this judge’s ruling was a great marketing opportunity. So it took out giant and expensive advertisements in The New York Times and touted its innocence using the judge’s own words. That takes guts these days.
May its sales soar to the moon!
I seriously resent how virtually the entire mainstream media presented this FTC decision as some sort of deadly blow to the company. It was not. But at least the company saw that it, and it alone, needed to bear the burden of telling the truth. It didn’t even attempt to crawl. It stood up strong and proud for its product, and their right to tell consumers what they believe to be true. Again, that takes guts.
Maybe the rest of Corporate America needs to drink of this juice!
In fact, let me add an additional and slightly implausible claim about POM Wonderful: This drink can cause your company to be proud of its product and defy even gigantic and powerful government bureaucracies that have zero interest in the well-being of American citizens and only want to expand their power and control at the expense of Americans’ right to know and right to choose.
So sue me!
Primus inter pares, Laissez Faire Club