The maker of Splenda on Friday settled a lawsuit over its disputed advertising slogan — “Made from sugar so it tastes like sugar” — just after the jury reached a verdict that would have gone against the market-leading artificial sweetener.
Merisant Co., which makes rival Equal, accused the makers of Splenda of confusing consumers into thinking its product was healthier and more natural than other artificial sweeteners. Splenda’s marketer, McNeil Nutritionals, countered that it simply has a better product backed by superior advertising.
A McNeil spokeswoman in the courtroom said the amount of the settlement wouldn’t be announced.
The two sides issued a joint statement Friday saying the details of the settlement are confidential and both have agreed to make no additional comment on the terms of the agreement.
Chicago-based Merisant was seeking more than $200 million from McNeil — at least $183 million for unfair profits since 2003 and compensation for at least $25 million in lost sales.
The jury was set to award a substantial amount, but less than what Merisant was asking for, said juror Barbara Helms, 55, of Lafayette Hill.
“I don’t think the company necessarily set out to mislead, but I don’t think they did anything to stop it,” said Helms, a vice president at a Philadelphia advertising firm.
The active ingredient in Splenda starts as pure cane sugar but is chemically altered to create a compound that contains no calories, according to McNeil. The final product contains no sugar.
The one-month trial focused mostly on Splenda’s advertising slogan, but it ended in a settlement after the jury announced it had reached a verdict.
Settlement talks began after jurors asked the judge for a calculator and expert reports from both sides on how to determine damages. Lawyers rushed to the judge’s office to try to delay the jury’s announcement and then huddled in a courthouse meeting room.
McNeil’s own consultants said its slogan confused potential customers, some of whom thought that Splenda was sugar without the calories, Merisant’s attorneys said. McNeil rejected a plan to add the phrase “does not contain sugar” to the front of Splenda’s yellow box, which might have cleared up the confusion, Merisant said.
Because the manufacturing of Splenda begins with sugar, McNeil can accurately claim that Splenda is “made from” sugar, according to its attorneys.
Splenda is used in more than 4,000 food and drink products and is included in recipes at numerous chain restaurants.
It had 60 percent of the consumer artificial sweetener market last year, according to the research firm Information Resources Inc. Equal, which comes in blue packets and is made with aspartame, and Sweet’N Low, in pink packets and made with saccharin, each held about 14 percent of the consumer market.
McNeil is a unit of Johnson & Johnson based in suburban Philadelphia and markets Splenda for its manufacturer, London-based Tate & Lyle PLC. It is also defending its Splenda advertising claims in a separate lawsuit in California filed by a group of U.S. sugar manufacturers.