Golda ice cream chain faces $117 million class action over ‘sugar-free’ labeling
A court certified a lawsuit alleging that ice cream sold as sugar-free contained lactose and potentially violated consumer and labeling laws. Golda says the case is only at a preliminary stage and that the claim has no basis.
The Central District Court in Lod has certified as a class action a lawsuit against Anita, the owner of the Golda ice cream chain, alleging that the company sold ice cream labeled “sugar-free” even though laboratory tests found that the products contained approximately 6.6 grams of lactose per 100 grams, derived from milk.
The lawsuit, filed by Sol Yarkoni, seeks NIS 350 million ($117M) on behalf of customers of the Golda and Anita chains who purchased ice cream products marketed as “sugar-free” during the past seven years.
According to Yarkoni, who is represented by attorneys Or Yarkoni, Omri Segev and Ori Eldar, a consumer who purchases a product labeled “sugar-free” does so precisely because of that characteristic. Selling products as “sugar-free” when they contain sugar, the lawsuit argues, amounts to “cheapening the consumer’s status and pocket.”
An expert opinion submitted with the lawsuit described the potential health risks for people with diabetes who consume ice cream containing sugar. The expert also stated that had ice creams containing the level of lactose identified in the tests been marketed as “sugar-free,” they likely would not have qualified for the “sugar-free” labeling associated with the Israel Diabetes Association.
Golda disputed the allegations in its response to the request to certify the lawsuit as a class action. The company argued that “there is doubt about the authenticity of the plaintiff's personal cause of action,” and claimed that the lawsuit appeared to have been deliberately initiated for the purpose of bringing a class action.
According to the company, the circumstances surrounding the plaintiff’s purchase raised questions about her credibility. It said she had purchased the ice cream only once and photographed the receipt immediately afterward at the Golda branch. The company also argued that the plaintiff had not actually been misled, pointing to previous social media posts in which she appeared to demonstrate an understanding that the term “sugar-free” can refer to products with no added sugar.
Judge Iris Rabinovitch-Brun nevertheless certified the lawsuit as a class action, finding that the allegations that consumers purchased the products under the impression that they were “sugar-free” had a sufficient basis to proceed.
“It was found that the claim that the product was consumed due to deception is a claim that has been found to have grounds for approval for clarification within the framework of a class action,” the judge ruled. She added that there was reason to assume that the ice creams were purchased and consumed under the impression that they were “sugar-free” products.
The judge also found that the sugar content of a product marketed as “sugar-free” could be a material consideration for consumers, particularly in an ice cream shop where most products are not marketed as sugar-free and among consumers with particular health or nutritional needs.
The legal grounds certified for the class action include alleged deception under the Consumer Protection Law, violation of statutory duties under the law, violation of an Israeli standard and violation of the Public Health Protection Law, as well as negligence and unjust enrichment.
The court will now examine questions common to the members of the class, including whether the chain violated the law by marketing the products as “sugar-free,” whether it violated applicable labeling requirements and whether it was required to disclose the presence or level of particular sugar substitutes or other ingredients.
The court also ordered Golda to pay NIS 1,000 in legal fees to the plaintiff’s attorneys.
The certification of the lawsuit does not constitute a ruling that Golda violated the law or that consumers are entitled to compensation. Those questions will be determined at a later stage of the proceedings.
Golda said: “It is important to clarify that, contrary to the impression that may be created by some of the publications, Golda was not ordered to pay NIS 350 million, or any other amount. This is an amount that the plaintiff herself chose to specify in her application, without any substantiation, and which, in Golda’s position, is unfounded and without any basis.
“The proceedings are only at a preliminary stage, and the court has not yet ruled on the merits of the claim and certainly has not awarded any compensation. We are convinced that as the proceedings progress, it will become clear that there is no basis for the claims or the amounts sought.
“Golda has made and continues to make every effort to act fairly and transparently toward its customers and has never sought to mislead them. It will continue to act in this manner while defending its position in court.”
