Freshpet stock tumbles after ad claims ruling

Investing.com -- Freshpet Inc. (NASDAQ: FRPT) shares fell 9% on Tuesday following a decision by BBB National Programs’ National Advertising Division that recommended the company discontinue certain advertising claims suggesting its dog food is "human grade."

The ruling came after a Fast-Track SWIFT challenge brought by competitor The Farmer’s Dog, which argued that three video advertisements included statements and images implying Freshpet’s dog food is human grade. Both companies compete in the fresh pet food market.

NAD found that a social media advertisement featuring a dog owner stating "We eat fresh, real food as much as possible at home, so of course, we want the same for Benji" and that Freshpet dog food is "made with the same level of quality I want in my own food" conveyed a message that the product is human grade. The division recommended Freshpet discontinue these claims as they appear in the video.

During the challenge, Freshpet permanently modified a commercial that previously stated "How does Freshpet make healthy food for dogs? The same way you make healthy food for people" by removing the second sentence. NAD determined the modified version does not convey a human grade message.

NAD did find one advertisement acceptable, determining that a video depicting food preparation in a home kitchen while Freshpet dog food is later served to a dog does not convey a human grade message because it focuses on freshness and simple ingredients.

In its advertiser statement, Freshpet said it "will comply with the NAD’s recommendation."

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