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  • JFTC issues a cease-and-desist order regarding Newspaper Advertisement Inserts Advocating "Weight-Loss Effect" - Case against Fuji Pharmaceutical Co., Ltd., Ho-ou Pharmaceutical Co., Ltd., and one other company -

JFTC issues a cease-and-desist order regarding Newspaper Advertisement Inserts Advocating "Weight-Loss Effect" - Case against Fuji Pharmaceutical Co., Ltd., Ho-ou Pharmaceutical Co., Ltd., and one other company -

October 30/2003
Japan Fair Trade Commission

With regard to the “Raichi Genbiou”, “Ho-ou Keishinsou”, and “Ho-ou Raichi Genbiou” products, which advocate “weight-loss effect”, the Japan Fair Trade Commission conducted an investigation into the three companies that sell said products. Because, based on this invesitigation, it was determined that statements related to these products may violate the stipulations of the Section 4 Paragraph 1 (misleading representation of quality) and Paragraph 2 (misleading representation of advantages) of the Premiums and Representations Act, the JFTC publicize the result of the investigation on statements used by the above-mentioned companies with an intention of providing appropriate information to general consumers.

1 Firms relating to the case

Fuji Pharmaceutical Co., Ltd. Shibuya-ku, Tokyo Bankrupt since 5 September 2003
Ho-ou Pharmaceutical Co., Ltd. Shibuya-ku, Tokyo Bankrupt since. 25 September 2003
Noritake Co., Limited Tokai-shi, Aichi Prefecture Warned to refrain from similar representation in future

2. Statements used by Fuji Pharmaceutical Co., Ltd., and Ho-ou Pharmaceutical Co., Ltd. (for details on the statements, please see item 2 of the separately attached table)

The JFTC has confirmed that there is a possibility of general consumers being misled by statements found in newspaper advertising inserts that were distributed as part of sales activities for “Raichi Genbiou” by Fuji Pharmaceutical Co., Ltd., and “Ho-ou Keishinsou” by Ho-ou Pharmaceutical Co., Ltd. Details are provided in item 1 of the separately attached table.

3. Warning to Noritake Co., Limited (for details on the statements, see item 2 of the separately attached table)

Because the JFTC has found that there is a possibility of general consumers being misled by statements found in newspaper advertising inserts that promote “Ho-ou Raichi Genbiou”, sold by Noritake Co., Limited (sold under the name “Seishunkan”), the JFTC has warned Noritake Co., Limited, to refrain from using these kinds of statements in the future.

a. Statements suggesting that by eating said product, the consumer can undergo dramatic weight loss in a short period of time
b. Statements using comparative prices for which said product has never been sold

4. Future response to statements on effectiveness, performance, etc.

In accordance with the stipulations of Section 4 Paragraph 2 of the revised Premiums and Representations Act (to be enacted on November 23, 2003), the JFTC shall ask businesses using statements on effectiveness, performance, etc., to submit materials that provide the rational grounds of said claims within a predetermined period of time. If a business fails to submit said materials, the JFTC may, based on the Paragraph mentioned above, order said business to remove said statements if it deems that the claims made by said statements are unjustifiable.

For details on implementation guidelines for the above-mentioned stipulations, please refer to “Implementation Guidelines for Section 4 Paragraph 2 of The Act against Unjustifiable Premiums and Misleading Representations: Guidelines regarding Stipulations against Unsubstantiated Advertising” (announced on October 28, 2003).

Attached table

1. Statements used for the products “Raichi Genbiou”, sold by Fuji Pharmaceutical Co., Ltd., and “Ho-ou Keishinsou”, sold by Ho-ou Pharmaceutical Co., Ltd.

Statement Actual fact
1. Statements indicating dramatic weight loss effect in a short period of time (Section 4 Paragraph 1)
Examples
(1) Fuji Pharmaceutical
Testimonies and photographs of people who experienced dramatic weight loss in a short period of time by eating “Raichi Genbiou”: “- 13 kg in 2 months”
(2) Ho-ou Pharmaceutical
Testimonies and photographs of people who had experienced dramatic weight loss in a short period of time by eating “Ho-ou Keishinsou”: “I lost 12 kg in two and a half months!”, etc.
Employees of Fuji Pharmaceutical and Ho-ou Pharmaceutical created the testimonies based on photographs obtained from respondents to a questionnaire related to products other than those in question. The companies paid \300,000 to persons providing the photographs. The persons in the photos did not lose weight by eating said products, and their testimonies were fiction. (This does not apply to one person associated with “Ho-ou Keishinsou”)
2. Statements suggesting that payment will be refunded without condition if no weight loss occurs (Section 4 Paragraph 2)
Examples
(1) Fuji Pharmaceutical
Statement says “We will not accept payment if you do not lose weight. If you experience no effect after eating all of your first order, we will refund your entire payment. Please try our product with peace of mind.”
(2) Ho-ou Pharmaceutical
Statement says “100% refund if you don’t lose weight!”, and “If you experience no effect after eating all of your first order, we will refund your entire payment if you notify us within 60 days. Please try our product with peace of mind.”
Employees of Fuji Pharmaceutical and Ho-ou Pharmaceutical did not readily respond to requests for refunds by making it difficult for those desiring a refund to prepare and submit records. This was done by not making it clear at the time of product purchase that submittal of documents (photographs taken before and after eating of said project, daily records, etc.) was a condition for refund.
Fuji Pharmaceutical established two special telephone lines for handling refunds. Although knowing that many calls from people desiring refunds that came in together did not get through, it did not establish additional phone lines because it wanted to avoid having these lines lead to more refunds.
3. Statements indicating that the actual sales price is extremely cheap (Section 4 Paragraph 2)
Examples
(1) Fuji Pharmaceutical
Statement says “24-can pack: regular price of \13,500 →\7,500” and “50-can pack: regular price of\27,000 →\13,800”
(2) Ho-ou Pharmaceutical
Statement says “Get a special one-time price on a limited supply”, “20-can pack: regular price of \14,250 →\7,600. Special one-time offer! Get 47% off!”, and “40-can pack: regular price of \28,500 → \13,800. Special one-time offer! Get 51% off!”
Neither “Raichi Genbiou” nor “Ho-ou Keishinsou” were ever sold at the “regular price”. The “regular price” was a fabrication.
4. Statement indicating that the product had been approved by a public agency (Section 4 Paragraph 1)
Example
Fuji Pharmaceutical- Statement says “A safe food product closely examined and approved by the Japan Food Research Laboratories”
It is not true that the Japan Food Research Laboratories approved “Raichi Genbiou”.
5. Statements suggesting that the products had received both domestic and international awards (Section 4 Paragraph 1)
Examples
Ho-ou Pharmaceutical- Statements say “Received a prestigious award in Japan in January 2003!”, “Ho-ou Keishinsou” was awarded top prize in the Dietary Food category"- Statements say “High quality and efficacy recognized not only in Japan but around the world!”, “Awarded the gold medal of the 2003 World Health Food Awards”, and “Awarded the 2003 International Beauty and Dietary Food Award”
These awards do not exist; therefore it is false to claim that “Ho-ou Keishinsou” won them.
6. Statements indicating that the products were presented on a television program (Section 4 Paragraph 1)
Examples
(1) Fuji Pharmaceutical
Statement says “Shown on the programs Osama no Buranchi and Waido! Sukuranburu”
(2) Ho-ou Pharmaceutical
Statement says “Appeared on Nippon Television’s Angura★NOW program in March 2003”
Neither “Raichi Genbiou” nor “Ho-ou Keishinsou” were presented on said television programs.

2. Statements used for the product “Ho-ou Raichi Genbiou”, sold by Noritake Co., Limited

Statement Actual fact
1. Statement suggesting that dramatic weight loss would be experienced in a short period of time (Section 4 Paragraph 1)
Example
- Ad contained testimonies and photographs of people who experienced dramatic weight loss in a short period of time by eating “Ho-ou Raichi Genbiou”: “- 13 kg in 2 months”
Employees of Fuji Pharmaceutical created the testimonies based on photographs obtained from respondents to a questionnaire related to products other than the products in question. The company paid \300,000 to persons providing the photographs. Noritake Co.,Ltd displayed them with photographs as testimonies. But the persons in the photos did not lose weight by eating said products, and their testimonies were fiction.
2. Statements indicating that the actual sales price was extremely cheap (Section 4 Paragraph 2)
Examples
Statements say “24-can pack: regular price of \15,000 → \9,600”, “50-can pack: regular price of \30,000 → \17,500”, “100-can pack: regular price of \50,000 → \33,000”, and “150-can pack: regular price of \70,000 → \45,000”
“Ho-ou Raichi Genbiou” never sold at the “regular price”. The “regular price” was a fabrication.

*Every announcement is tentative translation. Please refer to the original text written in Japanese.


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