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News Analysis: Review Of Kids Ad Rules Getting Messy

CARU finding that food companies, fast-feeders have different agendas.


By Jim Edwards

October 16, 2006

The Children's Advertising Review Unit is having difficulty drafting
new guidelines for marketers who target kids, sources said. The major sticking point: grocery brands and certain fast-food companies have adopted positions that are irreconcilable, according to sources closeto the talks.

A failure by CARU to get its members to agree on new voluntary rules could invite intervention from the federal government, or companies could abandon CARU altogether.

The main industry regulator for children's marketers, CARU began
a "complete review" of ad rules in February. At the time, CARU—a unit of the Council of Better Business Bureaus—said it believed the process would take 90-120 days. It has so far taken twice that long.

Although the review includes any company that targets kids, such as
toy or clothing makers, the main problem is among food marketers.
Grocery brands (such as Kraft, PepsiCo and Mars) are prepared to
accept much more stringent restrictions on kids' marketing than fast-
feeders (like McDonald's and Burger King), per sources.

CARU rules currently focus mainly on protecting children's privacy,
preventing kids from seeing messages intended for adults and promoting the responsible depiction of products in ads aimed at kids.

The review process is considering whether to add minimum nutrition
guidelines to that mix, or restrictions on targeting kids with
promotions for unhealthy food. The process is being overseen by Joan Z. "Jodie" Bernstein, a former director of the Bureau of Consumer Protection at the Federal Trade Commission and a lawyer at Bryan Cave, Washington. She is also on CBBB's board.

"[Bernstein] says nutrition standards are on the table," said Margo
Wootan, director of nutrition policy at the Center for Science in the
Public Interest, an advocacy group that has participated in the review and has criticized the food business. "We don't know whether or not they'll be included in the new guidelines."

Bernstein did not return a call for comment. "Jodie has been amazingly tight-lipped about this whole process," Wootan said.

If Bernstein cannot get a large majority of companies to accept new
guidelines, the fear is that companies may simply abandon CARU if it
promulgates rules they feel they cannot follow. Also, if the food
industry fails to reform and regulate itself, the FTC or a post-
election Congress could demand reform of kids' food marketing.

Kraft, PepsiCo, Mars, Campbell Soup and Dannon signed a pledge Oct. 6 as part of Bill Clinton's Alliance for a Healthier
Generation. It commits the companies to only sell food that meets
certain nutritional guidelines in schools. The firms also promised to
promote healthier lines, reformulate existing products or, in the case
of Mars, create a new line of products specifically to meet the
Clinton guidelines.

Fast-feeders, however, are so heavily dependent on burgers, fries and fried chicken that joining the grocery brands would be logistically
difficult. Dick Adams, a fast-food consultant at the Franchise Equity
Group, San Diego, said McDonald's would be unlikely to sign any kind
of nutrition-based pledge. "That's a dangerous thing to sign onto
because you don't want a special interest group to control your menu." (Adams is not a party to the talks.)

"This is a work in progress and as such, we can't discuss or speculateon what the final guidelines might be," said a McD's rep.
"In terms of where Kraft and Pepsi are going, they're objectively in
different places than a lot of different companies," said John
Feldman, a partner at law firm Reed Smith, Washington. Feldman is a
participant in the CARU review but declined to name his clients. Reed
Smith's Web site, however, states that Feldman has "worked with" quick-serve restaurants in the past. "Changing mixes of products and messaging is a lot easier for a company with a vast array of products than a company that sells gum or has one or two products," Feldman said.

A PepsiCo representative declined to say more than, "The industry is
working together toward a solution." A Kraft rep said, "If you look at
our position it's quite clear," and pointed to its commitment to the
Clinton Foundation. She declined to discuss CARU specifically.

Dan Jaffe, svp-government relations at the Assn. of National
Advertisers, said, "Things are just not fully gelled, so it's a moving
process." He declined to say how far apart companies were because
talks were changing daily. "I'm hopeful we're going to get from home
all the way around for a home run."

Speaking privately, other sources used more robust language. One said that if CARU adopts the Kraft guidelines then it could split the
industry and spell the end of self-regulation. Another questioned the
sanity of a participant who opposes his position. A third indicated
that everyone would be glad when the process was over.

The Federal Communications Commission announced in September it would study the link between kids' media consumption and obesity. A day earlier, the ANA's Jaffe used his blog to blast those who would blame and regulate the industry: "If obesity is a national crisis, why have physical education programs been cut in the schools? If Congress is serious about fighting childhood obesity, why has it eliminated all funding for the VERB campaign at the Centers for Disease Control?"


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