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Splenda Settles With Equal Over Claims

By MARYCLAIRE DALE (Associated Press Writer)

From Associated Press

May 11, 2007 5:34 PM EDT

PHILADELPHIA - The makers of Splenda and Equal on Friday settled a lawsuit over Splenda's disputed advertising slogan - "Made from sugar so it tastes like sugar." The settlement came after the jury announced that it had reached a verdict.

Merisant Co., which makes Equal, accused 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 planned to issue a joint statement later Friday.

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 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 said it had reached a verdict Friday afternoon.

Settlement talks began after jurors asked the judge for a calculator and a white board, an indication that they were computing damages to be awarded to Merisant. Lawyers rushed to the courtroom 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.

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