PHILADELPHIA – The marketers of Splenda have made millions by confusing consumers into thinking the yellow packets contain a natural product and not an artificial sweetener, its chief rival told a jury Tuesday in a trial that pits Splenda against its rivals in the $355 million market for sugar substitutes.
Splenda has cornered the $1.5 billion market for sugar substitutes since its 2000 debut through false advertising that implies Splenda contains sugar, the manufacturer of Equal says.
The Merisant Co., which makes Equal and NutraSweet, says Splenda is misleading customers with its tag line, "Made from sugar, so it tastes like sugar." Splenda contains no sugar and is instead sweetened with a synthetic compound through a complex chemical process.
McNeil Nutritionals counters that it uses sugar in the manufacturing process, even if it is burned off and not part of the final product. American consumers prefer Splenda because it tastes better and is easier to bake with, their lawyer said.
"Now, in 2007, Merisant wants to blame its misfortunes on false advertising," lawyer Steven Zalesin said in opening remarks in U.S. District Court.
Chicago-based Merisant sued McNeil over the advertising claims in 2004, saying that McNeil made at least $183 million in unfair profits since 2003 and that Merisant lost $25 million in sales of its products. The trial is expected to last up to three weeks.
Merisant charges that McNeil misled consumers into thinking that Splenda contained only natural ingredients, and that it was safer and healthier than other artificial sweeteners. McNeil repeatedly evaded questions about whether Splenda is "natural," a Merisant lawyer said.
"McNeil documents show that they knew consumers were confused and they didn't do anything to stop it," Merisant lawyer Gregg LoCascio said.
McNeil initially marketed Splenda with the slogan, "Made from sugar, so it tastes like sugar. But it's not sugar." After disappointing results, the company dropped the last sentence and sales started climbing, LoCascio said.
Splenda is now used in more than 4,000 food and drink products, from Diet Coke to Juicy Fruit gum. And Splenda had 60 percent of the more than $355 million in sales to consumers last year, according to the research firm Information Resources Inc.
Equal and Sweet'N Low each held about 14 percent of the consumer market, and their sales were falling.
Zalesin defended the language used in Splenda's ads, saying no sugar substitute markets itself as an "artificial sweetener." Instead, marketers use what he called "code" language, such as the term "no-calorie sweetener."
Neither Equal, which comes in blue packets and is made with aspartame, nor Sweet'N Low, in the pink packets and made with saccharin, comes from sugar, he said.
U.S. District Judge Gene E.K. Pratter's courtroom on Tuesday was packed with law clerks and young attorneys who turned out to see the global business brawl.
McNeil, which is based in Fort Washington and is a unit of Johnson & Johnson, markets Splenda for its manufacturer, London-based Tate & Lyle PLC. It is also defending its Splenda advertising claims in a separate lawsuit filed by the Sugar Association, a group of U.S. sugar manufacturers.
A federal court trial in that case is scheduled for November in Los Angeles. A federal judge in Delaware last year threw out McNeil's countersuit against the association, saying the California court should have jurisdiction because the two complaints shared the same fundamental question: whether Splenda is safe and healthy.
Splenda, on its Web site, touts "important health and lifestyle benefits" and discusses health issues such as child obesity and diabetes.
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