Hispanic Federation Asks FTC to Investigate Herbalife

The Hispanic Federation is requesting the Federal Trade Commission (FTC) that the regulator investigate Herbalife, a multi-level marketing firm that sells nutrition products, claiming its marketing materials promise "richness for a few hours of work from home."

"You can imagine for immigrants, particularly those who are underemployed or have no papers, this promise can seem like their ticket to achieving the American Dream," José Calderón, president of the Hispanic Federation, wrote in a letter dated May 17, 2013 and addressed to FTC Chairwoman Edith Ramirez.

The letter, which was first published by Business Insider, continues: "A particular concern to us about Herbalife is whether distributors make money selling products or recruiting others to sell products. The latter is an indicator of a pyramid  scheme."

In a statement sent to Portada, Los Angeles-based Herbalife said: "We regret that the Hispanic Federation has permitted itself to be the mechanism by which [hedge fund] Pershing Square continues its attack on Herbalife. No one from the Federation contacted Herbalife to ask questions about our business or express any concerns and the statements in the letter cause harm to our consumers and investors, and indeed all consumers and investors. Herbalife does not pay to recruit. All compensation paid to Herbalife distributors is related to the sale of product to consumers. Herbalife maintains close ties to the Hispanic community and values its relationship with Hispanic distributors."

Pershing Square is a hedge fund founded by Bill Ackman, who has reportedly been short selling Herbalife stock.

Los Angeles-based Herbalife last month reported 1Q net sales of $1.1 billion, a 17% increase from the same period the year before. In announcing the results on April 29th, Michael O. Johnson, Herbalife's chairman and CEO, said: "We continue to deliver record results in sales and profitability as our independent distributors successfully execute numerous growth strategies that enable deeper market penetration, developing customers using our weight management and targeted nutrition products every day."

Calls to the Hispanic Federation Wednesday morning were not immediately returned.


Laura Martinez (@miblogestublog)

Laura has lived and worked as a journalist in Mexico, Chile, Argentina and the U.S. She was the founder and editor in chief of Marketing y Medios magazine, an English- language trade publication devoted to explaining the Hispanic market to a non-Spanish speaking audience of executives and marketers. Prior to that, she was responsible for creating and launching the Spanish-language edition of the Wall Street Journal. She was also the creator and founding editor of Entrepreneur magazine´s Spanish-language Web site www.SoyEntrepreneur.com. She is fluent in Spanish, English and French and works as a freelance writer and editor in New York City.

MORE FROM PORTADA

The 5 Most Pressing Questions About Influencer Marketing Answered by Band of Insiders, Best Buy, Bimbo, and Pepsico

The 5 Most Pressing Questions About Influencer Marketing Answered by Band of Insiders, Best Buy, Bimbo, and Pepsico

During the seventh edition of the #PortadaMX summit, experts in Influencer Marketing took the stage to discuss best practices surrounding this elusive but undeniably effective tool to reach consumers. Vivian Baron, CEO and Creative Chairwoman at Band of Insiders, presented the panelists: Best Buy Mexico's E-commerce Subdirector José Camargo, Grupo Bimbo's Global Consumer Engagement Lead Giustina Trevisi, Band of Insiders' Influencer Marketing Manager Leonardo Vargas, and Pepsico/Drinkfinity's Director of Business Innovation & Marketing Yamile Elias.


Experts: Sears’ Future in Mexico Remains Bright, Implications for U.S. Hispanic Market

Experts: Sears’ Future in Mexico Remains Bright, Implications for U.S. Hispanic Market

Experts tell Portada the downfall of the storied retailer won’t affect the Sears franchise in Mexico where better merchandising and e-commerce under the management of Grupo Carso, owned by Mexican billionaire Carlos Slim, have built the franchise into a big hit with Mexican consumers. The implications for the U.S. Hispanic Market.