Federal Court Case Will Put Accurate Pepper Labeling To The Test
MINNEAPOLIS (WCCO) -- It is a seasoning found on practically every dinner table -- but the commonly-used spice is at the heart of a federal legal battle.
The packaging of ground pepper has relied on uniformly-sized tins which were sold in two-, four- and eight-ounce sizes for decades.
But a drastic change by spice giant McCormick & Company has Winona-based J.R. Watkins screaming foul.
Twin Cities businessman Irwin Jacobs is proud of what the company J.R. Watkins has become since he took control in 1978. Today, the company is a growing and is a rising star in the home products, spice and extract markets -- both in the U. S. and internationally.
But Jacobs is fighting mad over the company's line of ground pepper. Specifically, how their leading competitor, McCormick & Company, is putting less pepper in tins that have been standard sized for decades.
"It's a David-and-Goliath story, there's no question about it," Jacobs says.
McCormick has reduced the amount of pepper in large containers from eight down to six, its medium four-ounce tins now contain three ounces and the small size tins have shrunk from two ounces to one-and-a-half.
But using the larger containers for less product may well turn out to be a violation of Federal Trade Regulations known as non-functional "slack filling."
"Our six ounce is the same as their six ounce, but we look like we're less pepper than they are. And yet all they did was took 25 percent of the pepper out of the same tin and charge the same price for it," Jacobs said.
Watkins is suing McCormick in U. S. District Court in Minneapolis, calling their actions deceptive and misleading. Even though McCormick re-labeled the tins to accurately reflect the smaller amounts, Jacobs says it is all about consumer perception.
The pepper tins may look the same size, but they contain two very different volumes of pepper.
"We are impeccable as an honest company getting it across, so I know what we're doing is the right thing. I know what they're doing is the wrong thing, and I want to see how they're going to defend this," Jacobs said.
McCormick & Company issued a statement saying the company is reacting to a rapidly-rising cost of raw pepper, adding that their actions are an attempt to avoid sticker shock or a massive price increase for consumers.
McCormick claims the raw price of pepper has jumped nearly 60 percent over the past year, prior to their changing tin content amounts.
In justifying that the company couldn't keep raising prices, McCormick & Company issued a response, saying in part that "due to an unprecedented increase in the commodity costs of Black Pepper in the global market, we made the decision to reduce the net weight of our Black Pepper products."
The Maryland-based company is promising a vigorous defense. Meantime, Jacobs vows a fight to the end.
"We are not going to lose this one and losing to me is if no one pays attention to this and it continues," he said.
Jacobs expects the Federal Trade Commission will take notice of the suit and join the action, citing a possible violation of the Lanham Act.
Watkins is seeking a jury trial when the case is heard in Minneapolis.