Weekly News Update

October 12, 2000

Milton Bass Dies at Age 79

Longtime industry attorney Milton Bass on Oct. 9 died in a car accident in Connecticut. He was 79. Since the 1950s, Bass litigated in many of the industry’s major battles. In the ‘60s he fought FDA attempts to control dietary supplements potencies, ingredients and availability, while in the ‘70s he won a case that allowed health food stores to sell books. Along with Robert Ullman, Bass also served as legal counsel for the National Nutritional Foods Association (NNFA) for many years. This past summer he accepted NNFA’s Lifetime Achievement Award. On Oct. 11 a memorial service was held for him at the Riverside Chapel in New York. Donations on Bass’ behalf can be made to a memorial fund with the New York Metropolitan Opera Association, 212.870.7388.

Six Foreign Vitamin Companies to Pay $335 Million Settlement in Price-fixing Suit

Six supplements makers have agreed to pay a total of $335 million to settle a lawsuit that’s accused them of conspiring to fix prices from 1989 to 1998. The companies will pay $305 million to 22 states, the District of Columbia and Puerto Rico. As part of the settlement, some businesses may also have to participate in a $107 million claim fund. Additionally, 43 state governments will receive $30 million for overcharges on the products they purchased. Companies involved in the settlement are BASF of Germany; F. Hoffmann-La Roche of Switzerland; Aventis of France; and Takeda Chemical Industries, Eisai Co., and Daiichi Pharmaceutical Co. of Japan.

North Castle Partners Buys Fifth Juice Company

Greenwich, Conn.-based investment firm North Castle Partners (NCP) on Oct. 6 announced the purchase of Orchid Island Juice Co., a fresh-juice maker in Fort Pierce, Fla. Terms of the deal were not disclosed. According to NCP, Orchid Island will continue to operate under the leadership of its current management team. NCP General Partner Ellen Marram says Orchid lsland will further enhance the firm’s leading position in the fresh-juice category. During the past six months, NCP has acquired M.H. Zeigler and Sons, Saratoga Beverage Group (TOGA), California Day-Fresh/Naked Juice and Wiman Beverage Co.

Organic Bread Maker Secures $100,000 Grant From Iowa Rail

The Iowa Transportation Commission on Oct. 10 unanimously approved a $100,000 rail grant for Boulder,

Colo.-based organic bread maker Rudi’s Bakery. The money will be used to deliver flour by rail to the company’s new distribution center in North Liberty, Iowa. According to The Associated Press (AP), Rudi’s approached Iowa knowing about its $660,000 fund that’s used to help spur economic development through the use of railroads. By having its flour delivered in untainted bulk rail cars, Rudi’s estimates a savings of 13% on its flour costs, AP wrote. The new distribution plant, which will provide Iowa with 104 new jobs, is expected to begin production in April.

ABC Works to Correct Impression That Supplements Industry is Unregulated

The American Botanical Council (ABC) on Oct. 4 issued a press release in response to media reports that ours is an ""unregulated industry."" In it, ABC outlined FDA’s and FTC’s regulative powers over the supplements industry. Among them, ABC said, FDA can stop or take action against any company whose products are toxic or unsanitary, carry false or unsubstantiated claims, or pose a reasonable risk of illness or injury. Additionally, FTC can enforce laws against unfair or deceptive acts or practices, challenge and stop unsubstantiated advertising, and investigate complaints or questionable trade practices.

Briefly:

Wilsonville, Ore.-based pharmaceutical-grade dietary supplements maker Integrative Therapeutics on Oct. 5 announced its acquisition of supplements maker Vitaline Corp. of Ashland, Ore. Terms of the deal were not disclosed.

According to National Nutritional Foods Association (NNFA), FDA on Oct. 6 said it no longer intends to deny outright all dietary supplements health claim petitions that don’t meet the scientific agreement standard. Pending completion of a general rulemaking in response to Pearson vs. Shalala, it will enforce discretion allowing such requests.

According to the Organic Trade Association (OTA), organic sales in the U.S. are $6.6 billion--56% of which come from supermarkets, while 20 percent come from natural foods stores. By comparison, organic sales were $180 million in 1980, OTA says. Additionally, OTA says that listing forms for its 2001 ""Organic Export Directory"" are due Nov. 30. For forms or more information, visit www.ota.com.

Salt Lake City-based Weider Nutrition (WNI) on Oct. 5 agreed to pay $400,000 to settle FTC charges that it made unsubstantiated claims about its weight-loss supplements PhenCal and PhenCal 106. As part of the settlement, WNI must possess reliable scientific evidence to back up its promotional claims.

Nearly 100 mergers and acquisitions (M&As) occurred in 1999 vs. 16 in 1996, according to ""M&A Report 2000,"" a new study by Nutrition Business Journal (NBJ).

In an effort to boost growth and development, Penton Media (PME), owners of Boulder, Colo.-based New Hope Natural Media, said it has segmented its business into four operating units: Technology, Industry, Retail, and Lifestyle. The Lifestyle Media division will house Natural Foods Merchandiser, Delicious!, Natural Products Expo and Healthwell.com under New Hope Natural Media. Separately, Credit Suisse First Boston on Oct. 10 initiated coverage on PME at Strong Buy.

A study published in the October Journal of American Geriatrics Society says that ginkgo biloba may not benefit dementia and memory impairment in the elderly.

Healthnet Intl. (HLNT) on Oct. 10 announced the signing of 12 new licensees for the eHealthstores Express, the company’s turnkey Web program. Newcomers include Mass.-based Supplement Zone; Natural Health Center, N.Y.; N.J.-based Natural Way Management; and Nature’s Pantry, Mo.

Health and Nutrition Systems Intl. (HNNS) on Oct. 4 said its stock has commenced trading on the OTC Bulletin Board under the symbol HNNS.