In "Made In America" Case NAD Finds That Advertisers Should Not Rely On Disclosures To Cure A False Or Misleading Claim

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The National Advertising Division of BBB National Programs (NAD) recommended last month that Stihl Incorporated USA (Stihl), a manufacturer of equipment and tools, discontinue or modify...
United States Media, Telecoms, IT, Entertainment
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The National Advertising Division of BBB National Programs (NAD) recommended last month that Stihl Incorporated USA (Stihl), a manufacturer of equipment and tools, discontinue or modify its unqualified "Made in America" claims. Modified claims would need to make clear that "not all (or virtually all) of its products are made in the United States and that not all (or virtually all) of the parts of those products are from the United States," according to the recommendations.

The Claims at Issue

NAD reviewed "Made in America" claims made on Stihl's website, social media, commercials, and print ads. In addition to claiming "Made in America," Stihl ran ads stating, "It's just three words. But they tell you everything you need to know...Not everyone can say them. But we can. MADE IN AMERICA."

Importantly, Stihl's advertising included a disclosure that "a majority of Stihl's products sold in America are made in America of U.S. and global materials." In the video commercial, for example, the disclosure permanently occupied the bottom of the screen.

Stihl's advertisements were challenged by the Milwaukee Electric Tool Corporation, which presented a survey of over 800 consumers to demonstrate that 35.7% of consumers took away the message that "all or virtually all of the parts of Stihl's products were made in the United States."

NAD's Decision

NAD agreed that the survey was valid and demonstrated that Stihl's advertising conveyed an unqualified "Made in America" line claim about Stihl's products. Moreover, NAD concluded that Stihl's disclosure was ineffective because its "Made in America" claims were too prominent. Specifically, NAD determined that images Stihl used in its advertising—waving American flags, equipment moving through factories, consumers using tools, scenic locations across the U.S.—distracted consumers from the small-print disclosure, rendering it ineffective.

NAD also found that the challenged advertisements did not promote a particular product and thus reasonably conveyed that all or virtually all Stihl products are made in the U.S. NAD found that Stihl provided no evidence that the significant parts and processing of all its products occur in the U.S., or that all of its products contain no foreign content. Accordingly, NAD recommended that Stihl discontinue the unqualified "Made in America" claims.

However, NAD noted that nothing in its decision would prevent Stihl from making a properly qualified "Made in America" claim as to the specific products and parts that are made in America.

The case reinforces the age-old tenet that a disclosure cannot cure a false claim or a false net impression. Accordingly, marketers should proceed with caution before relying on disclosures, and must carefully evaluate their advertising in context to ensure that the net impression is not false or misleading.

Did you know: FDA recently finalized a guidance document on New Dietary Ingredients?

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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