Green Means Caution

by RichSchell

HINTS FOR RETAILERS PROMOTING GREEN 

By Rich Schell, J.D. 

All that glitters green may not be gold.  

Retailers should be aware that green/natural retailing presents unique perils and pitfalls that include misbranding and accusations of “greenwashing.”  

Consumers are savvy about what TerraChoice dubbed "The Six Sins of Greenwashing: Hidden tradeoffs, no proof, vagueness, irrelevance, fibbing, and the lesser of two evils.”

Natural body products and cosmeceuticals call for the greatest caution as they are frequently labeled with overstated claims or inadvertently classified as a drug. Here are five points retailers should keep in mind when reviewing all product labels. 

Know the Players.  Shampoo is sometimes just shampoo, but if it claims to cure dandruff it may fall under the jurisdiction of the FDA (Food & Drug Administration) because it contains drug ingredients. If the claim mentions organic the USDA has a say and if the claims seem outlandish the FTC (Federal Trade Commission) shields consumers from false claims and advertising. And yes, it’s possible that all three agencies will scrutinize the same product. For example, if the manufacturer produced a line of organic avocado facial products, then clearly the avocados would have to have grown according to NOP (National Organic Program) rules and the FTC and FDA will certainly become involved if the manufacturer claimed the product also miraculously caused dramatic weight loss—but couldn’t back it up.  

Ignorance is not bliss.  When it comes to labeling issues, ignorance is not bliss. The term cosmeceutical was coined to describe a cosmetic product that has pharmaceutical properties or effects. The FDA does not regulate or, for that matter, even recognize the term “cosmeceutical”. However FDA will care a great deal if the label suggests an intent that the product acts on the body like a drug. Cosmetics that contain recognized drugs in small amounts or other substances that claim to act like drugs are also regulated. 

Intent is in the eye of the regulator.  In regulating products the FDA reviews packaging and other materials to determine the intent. To boil it down to its essence, if the product labeling seems to show that the product may cause an effect inside the body, there is a risk it might be classified as a drug. Drugs are much more tightly controlled than cosmetics. Cosmetics are generally limited to body care products that only affect the surface of the person’s skin. 

A December 2007 study by TerraChoice found that 99 percent of 1,018 common consumer products randomly surveyed for the study were guilty of greenwashing. 

Manufacturers of body care products tend to fib or rely on vague claims. For example, a manufacturer who placed the USDA organic logo on their packaging and claimed their product was made of certified organic ingredients, had, in fact, used conventional ingredients is greenwashing by straight out fibbing. 

Shampoos claiming to be “certified organic,” but with no verifiable certification were typical. The study revealed 454 products committed this sin.  

An additional 196 products committed the “Sin of Vagueness: e.g. Products claiming to be 100 percent natural when many naturally-occurring substances are hazardous, like arsenic and formaldehyde,” according to TerraChoice. 

The only constant is change.  Products are constantly being reformulated and re-launched with updated packaging. In this market segment, green/natural claims are under greater scrutiny than ever. The FTC has specifically raised concerns about efforts to revise “green guide” and product claims. The goal is to better define claims regarding “natural” products. The FTC has begun reviewing the documents it uses to guide companies that make green claims about their products. Green cosmetics are a growing area so expect them to receive greater scrutiny. 

When a label is more than just a label.  Retailers should be aware that advertising materials and signage may be lumped into the purported claims under the label. In its effort to police trade issues, the FTC routinely cites advertising copy from radio, print and the internet in its complaints, so merely making sure the label itself passes muster is probably not enough. 

It pays to be careful whenever “green” labeling. Better safe than sorry. Although the FTC, and USDA, and FDA all have different roles and responsibilities, as green body care products become a bigger and bigger part of the market, they will also receive a closer look by regulators. 

Rich Schell is a lawyer, author and frequent speaker on legal issues involved in organic and green entrepreneurship. Contact him through his blog at www.schellacres.com directly at schell@wagneruslaw.com or visit www.wagneruslaw.com. 

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