By John Byczkowski and Cliff Peale
The Cincinnati Enquirer
Bags of snacks made with Procter & Gamble's olestra fat substitute no longer must carry labels warning of abdominal discomfort, the Food & Drug Administration said Friday.
The ruling is a moral victory for P&G, which once envisioned olestra, sold under the name Olean, as a billion-dollar boon to weight-conscious consumers.
"It's great for consumers who've been eating Olean snacks. It gives them some added confidence," said Gregg Allgood,, associate director of P&G's Health Sciences Institute. "And we think it opens the potential for a lot of people to enjoy fat-free snacks."
In addition to allowing the labels to be removed, the FDA also denied a request for a hearing on olestra's safety by the Center for Science in the Public Interest, a vocal opponent of the product. The FDA said the center's objections to olestra "do not raise any issue of material fact that justifies a hearing."
The label warned that olestra "may cause abdominal cramping and loose stools," and because of it, olestra became the butt of jokes on late-night TV. And studies conducted by P&G and reviewed by the FDA did not find that olestra was completely free from such side effects.
"What we've concluded is that to the extent that olestra causes GI (gastro-intestinal) effects in the real world, it seems to be very infrequent, mild and sort of on the order of other foods that occasionally cause GI effects," like fruit and bran, said George Pauli, associate director for science and policy in FDA's office of food additive safety.
So, "while there is a relationship" between olestra and these side effects, "it doesn't warrant a label requirement" in the FDA's view, he said.
The decision has come too late to rescue Olean as a large-scale business for Cincinnati-based P&G. After spending half a billion dollars over 25 years to develop the product, P&G got approval from the FDA in 1996, introduced it in 1998 and confidently predicted annual sales of $1 billion by the end of 1999.
But after determined opposition by some consumer groups, sales never approached that level, leveling off at $50 million a year. And as P&G started to concentrate on core markets, it has written down its investment in Olean. It sold the Ivorydale plant built specifically to make Olean, even as it retained ownership of the brand.
The entire time, P&G officials have insisted that the label is unnecessary and unsupported by scientific research. It claims that snacks including Olean have no more negative effects than other foods.
Michael Jacobson, executive director of the Center for Science in the Public Interest, which has bitterly criticized olestra since before its introduction, called the FDA's decision "crazy." He said there have now been close to 20,000 reports of adverse reactions to consumers from olestra.
"With so many people getting sick, (the label) is certainly better than nothing," Jacobson said. "We've asked the FDA to put the label on the front of the package, so people can see it. But they really don't care."
The label has been a major drag on performance, P&G's Allgood said. Without it, more snack-makers might use olestra, he said.
Olean is in P&G's Fat Free Pringles and in Frito-Lay's Wow chips, as well as some products made by Utz Quality Foods Inc. Products containing the product total about $100 million in annual sales, only a fraction of the chip and market.
Since 1998, the market share for Fat Free Pringles has fallen to 0.9 percent from 2.4 percent, and share for Lay's Wow chips has fallen to 1.2 percent from 4.4 percent, according to market-watcher Information Resources Inc. Those results do not include sales from Wal-Mart, P&G's biggest customer.
Allgood said that as a niche product, olestra is now a contributor to P&G Chemicals, a $900 million unit, and the label change will help spur more sales.
"Our olestra business has stabilized, and we think this will get it growing again," Allgood said.
P&G once envisioned olestra as a fat substitute in a wide range of products - not just chips, but ice cream and baked goods.
The FDA's Pauli said there is just one petition before it from P&G to expand use of olestra, for microwaveable popcorn. He would not comment on when the FDA might rule on that.
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