NAD Refers Advertising Claims made by Shredlage, CLAAS to FTC for Further Review After Farm Equipment Companies Decline to Participate in NAD Inquiry

New York, NY – July 28, 2016 – The National Advertising Division has referred advertising claims made Shredlage, LLC and CLAAS of America to the Federal Trade Commission (FTC) for further review, after the companies declined to participate in a review of advertising claims made for their corn kernel processing equipment. The claims at issue were challenged by Deere & Company, a competing maker of agricultural equipment.

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

The parties to this case manufacture and market kernel processors, used in the field to process corn cobs and stalks to make silage – plant material that is stored, fermented and used as animal feed. The challenger in this case noted that the efficacy of kernel processing (KP) units directly affects the amount and quality of usable silage and, in turn, the health and productivity of farm animals.

NAD requested that Shredlage and CLAAS provide substantiation for express advertising claims about improved silage quality, improved milk production and animal health, cost-savings and the revolutionary nature of Shredlage KP units.

Claims at issue included:

• “Improved effective fiber, better packaging, and a greater exposure to the inner cells of the plant for increased microbial activity.”
• “Improves physically effective fiber which can result in decreased use of straw and hay as fiber substitutes in feed.”
• “University of Wisconsin Madison feeding trial results showed no sorting in the TMR with DMI and FCM trend to be greater for cows fed SHREDLAGE silage. The FCM response to SHREDLAGE silage increased as the treatment period progressed.”
• A bar graph that shows purported “Increased Effective Fiber” as compared to traditional KP units.
• “Studies have shown that Shredlage provides increased peNDF (physically effective fiber), which is key for good rumen function.”
• “Allows for more effective microbial events to occur due to the increased attachment surface area during harvesting. This increase in surface area results in improved total tract digestibility and an overall healthier rumen.”
• “Shredlage fully optimizes corn silage processing, with consistently higher KP scores.”
• A bar graph that shows a purported “Improved Performance” as compared to traditional KP units.
• A bar graph that shows a purported “Improved Fermentation” as compared to traditional KP units.
• A bar graph that shows a purported “Improved dry matter intake” as compared to traditional KP units.
• “Longer milk production yield has also been reported.”
• Reference to results of “two university trials” showing 2 lbs. increase in milk production.
• “We saw about close to a two pound milking pretty quick.”
• “Increase production.”
• “Healthier cows.”
• “Over time we started to notice healthier animals.”
• “Noticeable differences can be seen using SHREDLAGE brand processor technology as compared to utilizing traditional silage harvesting techniques.”
• “New era of corn harvesting.”
• “Changing the industry.”
• “More money in the bank.”
• “Save on feed costs.”

NAD also requested substantiation for claims that implied traditional KP units are ineffective or that Shredlage-brand machinery is superior to traditional KP units, such as those made by Deere, in every respect.

The advertisers, through their counsel, informed NAD that they declined to participate in the self-regulatory process. The advertisers did not respond in writing to NAD’s request for substantiation for the challenged claims.

NAD noted in its decision that the challenged claims relate to an important agricultural process, and its downstream effect on the agricultural industry’s ability to properly feed livestock and to produce food efficiently. “Accordingly, as with much business-to-business advertising, truthfulness in the advertising of KP units may not only impact competing industry and agricultural business consumers, but may also have an effect that reverberates to individual retail consumers,” NAD stated in its decision.

NAD was disappointed that the advertisers declined to participate in the self-regulatory forum. NAD will refer this matter to the appropriate regulatory authorities pursuant to Section 2.1(F)(iii) of the NAD/NARB Procedures.

Note: A recommendation by NAD to modify or discontinue a claim is not a finding of wrongdoing and an advertiser’s voluntary discontinuance or modification of claims should not be construed as an admission of impropriety. It is the policy of NAD not to endorse any company, product, or service. Decisions finding that advertising claims have been substantiated should not be construed as endorsements.