The referral follows an investigation by the NAD in July 2014 over Talking Rain’s advert for Sparkling Ice after Nestle Waters North America challenged advertising claims for the brand, which expects to register $500m in annual sales this fall.
A NAD spokeswoman told BeverageDaily.com that the brand could face sanctions "both financial and legal – the FTC is a law enforcement agency with broad authority. We’ve also had cases where the FTC encouraged the company to return to NAD and bring its advertising into compliance".
By way of example here's a link to ongoing FTC cases and proceedings.
The nub of the issue is that Sparkling Ice is marketed on TV, online (see the YouTube video below) in print advertising and on packs as ‘the adventurous side of water’, ‘the vibrant side of water’ and the ‘the bold side of water’.
Nestle Waters argues Sparkling Ice 'mislabeled'
Earlier this year Nestle Waters filed a complaint with the NAD (administered by industry funded body The Council of Better Business Bureaus) that Sparkling Ice is mislabeled as a ‘naturally flavored sparkling mountain spring water.
Nestle Waters alleged violation of the Food and Drug Administration’s (FDA’s) bottled water regulations – arguing that Sparkling Ice did not meet FDA identity standards for ‘spring water’ or ‘sparkling water’.
The NAD disagreed, responding (along with other arguments) that Sparkling Ice labels, taken as a whole, made it clear to consumers that liquid inside bottles was more than just water – while translucent packs allowed consumers to see the ‘bright color’ liquids inside.
NAD also concluded that the product name, addition of vitamins and antioxidants to Sparkling Ice were not misleading, while labelling did not give rise to an implied claim that the drinks are ‘virtually identical’ to water or that it is ‘more healthful’ than water.
However, NAD said was troubled by other advertising taglines that it said consumers could reasonably interpret to mean that the product was water, and recommended these be discontinued.
'Numerous additives and sweeteners' used - NAD
Reiterating its July decision in a September 24 statement, the NAD said it had, “determined that calling the products a ‘…side of water” could be reasonably understood by consumers to mean that the products are water, when in fact they contain numerous additives and sweeteners”.
Talking Rain said in July that it disagreed with the final case decision in its July Advertiser’s Statement – but it is unclear whether the company agreed to comply with the NAD’s recommendation that it discontinue the taglines or not.
The NAD says it agreed to do so, but in its statement Talking Rain said it would “take that recommendation into consideration as it develops future advertising”.
Talking Rain did not participate in NAD's compliance inquiry
However, the NAD said Nestle Waters recently requested that it start a compliance proceeding against Talking Rain/Sparkling Ice – given website advertising, videos and its YouTube page that continues to use the ‘…side of water’ claims.
“Talking Rain declined to participate in NAD’s compliance inquiry. Given the advertiser’s refusal to participate further in the self-regulatory process, particularly after it indicated its willingness to comply with NAD’s decision in its Advertiser’s Statement, NAD is referring this matter to the Federal Trade Commission for review,” the NAD said.
Talking Rain/Sparkling Ice did not respond to a request for comment.