AG Schneiderman Reaches Settlement with Beverage Company Over Misleading Advertising Claims Targeting Hispanic Communities
By Long Island News & PR Published: July 10 2014
The Varas Group Made Illegal and Unsubstantiated Claims that Purple Maize Extract, an Ingredient in Chicha Limeña, Fights Cancer and Diabetes
New York, NY - July 10, 2014 - Attorney General Eric T. Schneiderman today announced that his office has reached a settlement with The Varas Group for conducting a misleading advertising and social media campaign for its Chicha Limeña soft drinks. The beverage, marketed mostly to Hispanic communities in metropolitan New York, New Jersey, and Connecticut, was advertised as containing an ingredient that fights cancer and diabetes. The Varas Group has agreed to cease the use of health-related claims in all marketing materials and agreed to pay the State of New York penalties, costs, and fees.
“There has to be one set of rules for everyone, including those who would make dubious health claims about their products,” said Attorney General Schneiderman. “While soft drink companies may market the advantages of their products, they may not make unsubstantiated claims that their products have the potential to prevent or cure serious health problems.”
The Varas Group has been marketing its products in the U.S. since 2006, mostly to Hispanic communities. Chicha Limeña is a non-carbonated beverage containing water, sugar cane, purple maize extract, pineapple, lemon, cinnamon and cloves. Chicha Limeña is made with ingredients native to Central and South America and is modeled on traditional Peruvian (Limeña or “of Lima”) soft drinks; “Chicha” is a maize- or corn-based beverage. These beverages often appeal to consumers with a fondness for foods and beverages that represent their heritage and are familiar to their tastes.
Purple corn, touted as containing high levels of antioxidants, is enjoying popularity as a healthful ingredient. However, neither the precise health benefits nor required consumption levels to achieve a benefit have been established in scientific literature. In an effort to expand its sales and capitalize on the popularity of purple corn-based products, Chicha Limeña was advertised on its webpage and in social media as “a nutritional powerhouse packed with antioxidants … [that] may help prevent obesity and diabetes.” Other marketing touted unsubstantiated health claims including purple maize’s purported ability to fight cancer and provide “tons of health benefits.” Obesity and diabetes are serious health problems in Latino communities. As part of the settlement, the company will pay $5,000 in penalties, costs, and fees.
The case was handled by Assistant Attorney General Ellen J. Fried, Deputy Bureau Chief Laura J. Levine and Bureau Chief Jane M. Azia, all of the Consumer Frauds Bureau, and Executive Deputy Attorney General of Economic Justice Karla G. Sanchez.