New York, NY - March 6, 2003 - The National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc., the advertising industry's self-regulatory forum, recommended that Sidney Frank Importing Company, Inc. , modify comparative and superiority advertising claims for its product, Grey Goose Vodka . The truth and accuracy of Grey Goose's advertising was brought to the attention of the NAD by competing importer and marketer of Belvedere Vodka, Millennium Import Company . SOURCE: NAD press release
NAD recognized Sidney Frank's right to advertise its own commendable 1998 BTI rating, but concluded that subsequent BTI testing indicated that the advertised 1998 rating for competing product Belvedere Vodka, was likely atypical and unrepresentative of the quality of the competing product and an inaccurate reflection of its more current BTI rating. NAD, therefore, recommended that the advertiser modify its advertising and discontinue its comparative reference. SOURCE: NAD press release
In a statement to NAD, Sidney Frank stated that "[It] is pleased that NAD has found that the Grey Goose advertisement of BTI's 1998 taste test results is a literally accurate and truthful ad …" The advertiser, however, requested an appeal to NARB for NAD's recommendation that it modify its advertising, because it argued that BTI "… believes that there is nothing false or misleading about the Grey Goose advertising" and rejected the advertiser's requests to substitute Belvedere's recent higher rating. SOURCE: NAD press release
NAD is the first-level which investigates the truthfulness and accuracy of a national ad.
NARB (National Advertising Review Board) is the second part of the self-regulatory process.
When an advertiser or challenger disagrees with NAD's findings, NAD's decision can be appealed to the NARB for additional review.
The panel's recommendations are non-binding, however, in the spirit of self-regulation, almost all advertisers accept the NARB Panel's findings and recommendation.
In the extremely rare instance of an advertiser's unwillingness to to accept the panel's recommendations, NAD/NARB Procedures call for a referral of the matter to an appropriate law-enforcement agency.
Lee Einsidler, executive vice president of sales and marketing for Sidney Frank :
"Just because [the NARB has] made a determination, we're not bound to follow it.”
"We're following BTI guidelines that say no commingling, and [the NARB] is asking us to violate the BTI guidelines."
”… if [Belvedere is] concerned about their new rankings, they should go advertise that."
Since Sidney Frank told the NARB that it has no intention of complying, the board referred the case to
the Federal Trade Commission
the Alcohol and Tobacco Tax and Trade Bureau (a spinoff of the Bureau of Alcohol, Tobacco and Firearms).
Millennium Import Co., importers of Belvedere vodka, filed a lawsuit on Aug. 28 against Sidney Frank Importing, which distributes Grey Goose vodka, for false advertising, consumer fraud and trade libel.
Steve Gill, Millennium Import Co. president:
"We have been damaged by these deceptive and misleading ads because [Sidney Frank has] misled consumers into thinking [Grey Goose] is the best-tasting vodka in the world and [Belvedere is] an inferior vodka, which is not the case."
"We intend to prove in a court of law that [Sidney Frank] has misled consumers ... and garnered revenue which has been gained based on deception."