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Burger King, others in the dock. What is their fault?

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Burger King, others in the dock. What is their fault?

 Food ads have long made their subjects look bigger, juicier and crispier than they are in real life. But some consumers say those mouthwatering ads can cross the line into deception, and that’s leading to a growing number of lawsuits.  

Burger King is the latest company in the crosshairs. In August, a federal judge in Florida refused to dismiss a class action lawsuit that claims Burger King’s ads overstate the amount of meat in its Whopper burger and other sandwiches. 

But Burger King is far from the only one.

Perkins Coie, a law firm that tracks class action suits, said 214 cases were filed against food and beverage companies in 2022 and 101 were filed in the first six months of this year. That’s a huge increase from 2010, when just 45 were filed. 

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Pooja Nair, who represents food and beverage companies as a partner with the Beverly Hills, California-based law firm Ervin Cohen and Jessup, said waves of class action lawsuits started hitting federal courts a few years ago. 

Some of the first were false advertising claims against snack chip makers for not completely filling the bags; most of those were dismissed, she said. Since 2019, hundreds of lawsuits have been filed asserting that consumers are being misled by “vanilla-flavored” products that don’t contain pure vanilla or vanilla beans. 

Plaintiffs’ attorneys largely file the cases in the same courts in New York, California and Illinois, she said, where federal courts are less likely to dismiss them outright. 

While the case against Burger King was filed in Miami, where its parent company has its US headquarters, one of the attorneys who filed it has similar cases pending in New York against Wendy’s, McDonald’s and Taco Bell.

That attorney, James Kelly, didn’t respond to a message seeking comment. 

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Companies often settle cases before a lawsuit is filed instead of spending the time and money fighting it in court, Nair said.

Earlier this summer, A&W and Keurig Dr Pepper agreed to pay $15 million to settle claims they had deceived customers with the label, “Made with aged vanilla” on cans of soda which actually used synthetic flavoring.

Others say growing consumer awareness is behind the trend. Social media can instantly make a photo of a soggy sandwich go viral, informing other potential plaintiffs, said Jordan Hudgens, the chief technology officer for Dashtrack, an Arizona-based company that develops restaurant websites.

Rising awareness of health and nutrition is also causing people to question product claims, he said.

Ben Michael, an attorney with Michael and Associates in Austin, Texas, said inflation also might be making restaurants a target right now, since some may have cut back on portion sizes to cut costs. 

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“Unfortunately, many businesses make these changes without consulting their marketing department or updating their menus to represent new portion sizes and ingredients,” he said. “This leaves them open to the kinds of lawsuits we’ve been seeing more of.”

In the Burger King case, plaintiffs in multiple states sued in March 2022, claiming that advertisements and photos on store menu boards show burgers that are about 35% larger – with double the meat – than the burgers they purchased. The plaintiffs said they wouldn’t have bought the sandwiches if they had known the actual size.

A Burger King spokesperson said the plaintiffs’ claims are false, and that the beef patties in its ads are the same ones it serves across the US.

In late August, US District Judge Roy Altman dismissed some of the plaintiffs’ claims. He ruled that the plaintiffs can’t argue that television or online ads constituted a “binding offer” from Burger King, because they don’t list a price or product information. But he said the plaintiffs could argue that the images on the menu boards represented a binding offer. He also didn’t dismiss claims of negligent misrepresentation.

Nair said it’s unclear how the case will be resolved. Generally, she said, cases against fast food giants have been hard to win. Unlike boxes of cereal or sodas, every sandwich is different, and some might look more like the images on menu boards than others.

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The US Supreme Court hasn’t weighed in on these issues, so they’ve been decided on a court-by-court basis.

In 2020, a federal appeals court upheld the dismissal of a lawsuit against Dunkin’. The plaintiffs said the company deceived them when it said their wraps contained Angus steak; they actually contained ground meat.

Ultimately, the Burger King case and others could cause companies to be more careful with their ads, said Jeff Galak, an associate professor of marketing at Carnegie Mellon University’s Tepper School of Business. But that could come at a cost; more realistic photos might lead to lower sales.

“There’s a legal line. When is it puffery and when is it deceit?” Galak said. “Companies are always trying to ride right up against that line.”

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A sigh of relief as inflation at lowest ebb of 17.3pc in two years

A sigh of relief as inflation at lowest ebb of 17.3pc in two years

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A sigh of relief as inflation at lowest ebb of 17.3pc in two years

Pakistan’s consumer price inflation has come down to 17.3 per cent in April, the lowest during the preceding two years, data from the Pakistan Bureau of Statistics (PBS) says. 

Pakistan has been beset by inflation above 20pc since May 2022, registering as high as 38pc in May 2023, as it has gone through reforms as part of an International Monetary Fund (IMF) bailout programme. 

Month-on-month inflation is down 0.4pc, showing negative growth for the first time since June 2023. 

The Finance Ministry in its monthly economic report said it expected inflation to hover between 18.5pc and 19.5pc in April and ease further in May to 17.5pc-18.5pc. 

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“The inflation trajectory is slowing primarily on account of food inflation which has slowed down considerably,” said Faizan Kamran, chief executive of a Karachi-based investment and research company.

Kamran added that he expected inflation to fall into single digits in the next five to six months. 

The State Bank of Pakistan (SBP) maintained its key interest rate unchanged at 22pc for the seventh straight policy meeting on Monday, hours before the donor agency executive board approved $1.1 billion in funding under a $3 billion standby arrangement signed last year. 

Pakistan receives last tranche from IMF 

The State Bank of Pakistan (SBP) received SDR 828 million (around $1.1 billion) from the International Monetary Fund (IMF) on Tuesday – a day after the Fund approved the last tranche for Pakistan under the $3 billion Stand-By Arrangement (SBA). 

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In a statement, the SBP said the amount would reflect in the foreign exchange reserves for the week ending on May 3. 

Last week, the SBP said its foreign exchange reserves dropped by $74 million to $7.981 billion (in the week ending on April 19) because of external debt repayments.

IMF greenlights $1.1bn tranche 

On Monday, the IMF approved disbursement of $1.1 billion tranche, concluding the second bailout package in eight years. The board met in Washington and completed the second review. It is learnt that all board members, except India, favoured the last installment for Pakistan.

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Czech central bank cuts a key interest rate again with inflation down and the economy on the mend

Czech central bank cuts a key interest rate again with inflation down and the economy on the mend

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Czech central bank cuts a key interest rate again with inflation down and the economy on the mend

The Czech Republic’s central bank on Thursday cut its key interest rate for the fourth straight time as inflation dropped and the economy showed signs of recovery.

The cut by a half-percentage point brought the interest rate down to 5.25%. The move was expected by analysts.

The bank started to trim borrowing costs by a quarter-point on Dec. 21, which marked the first cut since June 22, 2022. It continued with a cut by a half-percentage point on Feb. 8 and went on by another half-percentage cut on March 20.

Inflation declined to 10.7% in 2023 from 15.1% in 2022, according to the Czech Statistics Office, and dropped to 2.0% year-on-year in February, which equals the bank’s target, and remained unchanged at the same level in March.

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The Czech economy was up by 0.4% year-on-year in the first quarter of 2024, and increased by 0.5% compared with the last three months of the previous year, the preliminary figures released by Statistics Office indicated on Tuesday.

That came after the Czech economy contracted by 0.2% in the last three months of 2023 compared with a year earlier.

The Czech bank’s decision comes as central banks around the world, including the U.S. Federal Reserve, are trying to judge whether toxic inflation has been tamed to the point that they can start cutting rates.

The European Central Bank left its key rate benchmarks unchanged at a record high of 4% in April, but signaled it could cut interest rates at its next meeting in June.

But the U.S. Federal Reserve emphasized earlier this week that inflation has remained stubbornly high in recent months and said it doesn’t plan to cut interest rates until it has “greater confidence” that price increases are slowing sustainably to its 2% target. 

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Neelum Jhelum Power Plant shutdown for physical inspection of head race tunnel

Neelum Jhelum Power Plant shutdown for physical inspection of head race tunnel

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Neelum Jhelum Power Plant shutdown for physical inspection of head race tunnel

The Neelum Jhelum Hydropower Plant was shut shutdown yesterday for a physical inspection of its head race tunnel to locate the problem which led to a decrease in pressure a month ago.

Once the problem is traced, a comprehensive plan will be chalked out in coordination with the project consultants and the international experts for undertaking remedial works to rectify the issue, said a press release.

According to the details, a sudden change in the head race tunnel pressure was observed on April 2, 2024. As per the advice of the Project Consultants for the safety of the head race tunnel, the project management kept operating the plant at a restricted generation of 530 MW since April 6 to monitor fluctuation in the head race tunnel pressure.

Neelum Jhelum Hydropower Plant continued generating about 530 MW of electricity till April 29 without any issue. However, at 2257 hours on April 29, further change in the head race tunnel pressure was observed. Subsequently, the generation was gradually reduced but the pressure could not sustain within the safe limits as per the advice of the Project Consultants.

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Keeping in view the safety of the head race tunnel and the powerhouse, the plant was shut down at 0600 hours on May 1 for a physical inspection of the head race tunnel to identify the problem of reduced pressure. Consequent to the detailed discussion with the consultants for dewatering of the 48 Km-long tunnel, the intake gates at the dam site were lowered for flushing of the de-sanders.

The dewatering started from the powerhouse side on the same day. The dewatering will be executed at intervals for the safety of the tunnel.

It is important to note that Neelum Jhelum Hydropower Project has been constructed in a weak geological and seismic-prone area. It has a 51.5 Km-long tunnel system. Its head race tunnel is 48 Km long, while the tail race tunnel is 3.5 Km-long. About 90% of the project is underground. Earlier, the plant was shut down in 2022 for repair of the tail race tunnel downstream of the powerhouse. After completion of the repair and rehabilitation work, the plant resumed electricity generation in August 2023.

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