Bubble trouble? Seltzer maker LaCroix sued over ‘all-natural’ label

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A lawsuit popped open this week in Chicago accuses the popular sparkling water brand LaCroix of lying about its “all-natural” ingredients.

The filing in Cook County, Illinois, circuit court, on Monday against the National Beverage Corporation, LaCroix’s parent company, by the law firm Beaumont Costales LLC on behalf of plaintiff Lenora Rice.

“Much of LaCroix’s popularity stems from the American consumer’s perception that LaCroix water is ‘all natural,’ or otherwise comprised entirely of natural substances,” reads a copy of the complaint obtained by NBC News. “Unfortunately for all parties involved, Defendant’s representations regarding the naturalness of LaCroix water are false.”

Image: LaCroix Sparking Water
LaCroix Sparking Water on display during Hilarity for Charity’s 5th Annual Los Angeles Variety Show: Seth Rogen’s Halloween at Hollywood Palladium on Oct. 15, 2016 in Los Angeles, California.Randy Shropshire / Getty Images

The lawsuit claims LaCroix uses a number of synthetic ingredients, including ethyl butanoate, limonene, and linalool propionate.

The lawsuit then goes on to claim that the company has not only mislabeled its products, but contains ingredients that are used for other purposes like linalool, which the suit claims is used in insecticides.

All three ingredients are in fact naturally occurring in fruit. Ethyl butanoate is found in natural fruits, including apples and tangerines, according to the chemistry database PubChem maintained by the National Institutes of Health. Linalool and limonene also occur naturally in fruit. They help give citrus peels their distinctive aroma.

In a statement published online, the law firm says it wants LaCroix to relabel its packaging and award damages to customers who bought the beverages thinking it was “all-natural.”

The National Beverage Corporation strongly refuted these allegations in a statement saying they were made “without basis in fact or law.”

“Natural flavors in LaCroix are derived from the natural essence oils from the named fruit used in each of the flavors,” the company wrote, citing the United States Food and Drug Administration’s definition of “natural.”

“There are no sugars or artificial ingredients contained in, nor added to, those extracted flavors,” seltzer the company said.

The company said it will be seeking damages resulting from the publication of the lawsuit’s allegations.

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LaCroix ingredients: Lawsuit alleges “all natural” claim is false

LaCroix sparkling water is facing a lawsuit alleging its claims of “all natural” and “100 percent natural” are misleading because of artificial ingredients. 

“Testing reveals that LaCroix contains a number of artificial ingredients, including linalool, which is used in cockroach insecticide,” claims a statement from Beaumont Costales, a law firm representing plaintiff Lenora Rice. 

The lawsuit claims LaCroix and its parent company, National Beverage, are aware of the synthetic chemicals in the sparkling water, yet are “intentionally misleading consumers,” according to CBS Philly. 

National Beverage denied the allegations in the lawsuit. “Natural flavors in LaCroix are derived from the natural essence oils from the named fruit used in each of the flavors,” the company said in a statement. “There are no sugars or artificial ingredients contained in, nor added to, those extracted flavors.”

It added that its suppliers have certified the essences are “100% natural.” 

Sales at National Beverage rose almost 13 percent in the quarter ended July 28, reaching $292.6 million. Much of that increase was due to its health-conscious drinks, which includes the LaCroix brand, Shasta and juice and energy drinks, according to a regulatory filing. 

The distinction appears to boil down to how the FDA differentiates between synthetic and natural flavors, reports Popular Science, which explained that the three ingredients cited by Beaumont Costales aren’t as dangerous as they might seem. For instance, linalool, which is cited as a cockroach insecticide by the law firm, is found in plants like mints and scented herbs. While it’s also used in insecticides, it’s not poisonous for humans, Popular Science noted. 

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Stocks fall as rates pop on jobs report

Stocks fell on Friday after the release of mixed employment data jolted interest rates higher.

Dow Jones Industrial Average declined 100 points as Caterpillar lagged. The S&P 500 traded 0.2 percent lower as tech underperformed. The Nasdaq Composite pulled back 0.6 percent as Amazon, Apple, Netflix and Alphabet all traded lower.

The U.S. economy added 134,000 in September, well below the expected gain of 185,000. However, the U.S. unemployment rate fell to its lowest level since 1969. Job gains for August also received a sharp upward revision to an addition of 270,000 jobs from 201,000. Wages, meanwhile, grew by 2.8 percent last month on a year-over-year basis to match expectations.

“Nobody knows what to do with it,” said JJ Kinahan, chief market strategist at TD Ameritrade. “This is one of those job reports that had something for everyone.”

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New GE CEO Larry Culp signs stock-heavy contract worth up to $300 million if shares soar

General Electric is in dire need of a turnaround and will pay its new CEO handsomely if he can pull one off.

named GE chairman and CEO on Monday, will receive a compensation package of up to $21 million a year in salary, bonuses and stock for the next four years, David Faber reported on CNBC’s “Squawk on the Street” on Friday. Beginning next year, GE will annually give Culp a salary of $2.5 million, a bonus of about $3.75 million and equity awards valued at $15 million.

But that’s not the best part for Culp: If the stock rises more than 50 percent, he also gets a payday of about $47 million. And he gets more money if it rises further.

“If we get up 150 percent, we’re talking $300 million,” Faber said.

The one-time pay out at the end of the third quarter in 2022 is based on performance metrics for Culp, marked by increases in GE stock. If the company’s stock rises 50 percent, Culp gets 2.5 million GE shares at about $18.60 a share – or about $47 million. If the company’s stock rises 150 percent, Culp gets 7.5 million shares at $31 a share – or about $233 million. Added to his annual pay and awards, Culp could bring in as much as $317 million.

“That is a contract that, if you’re performance oriented, it’s the best performance-oriented contract I’ve ever seen,” CNBC’s Jim Cramer added. “And I don’t think anyone’s seen a better one.”

Culp, 55, brings more than a decade of success as the CEO of Danaher to his new role at General Electric, giving investors new hope for the embattled industrial conglomerate. Danaher now holds its place as one of the world’s largest science and technology conglomerates, after Culp more than quintupled the company’s market value and revenues while CEO.

“Larry is a proven executive with a long track record of superior execution, and the Board’s package to attract Larry is overwhelmingly tied to performance,” GE said in a statement. “Nearly 90% of his annual pay will be at risk and his one-time grant will only pay out if there is a 50-150% increase in GE’s stock price.”

He comes to GE at a desperate time. Ousted CEO John Flannery was promising shareholders he would trim GE down to three core businesses, but the company was not turning around as quickly as its board of directors had hoped. GE’s announcement Monday that Culp will replace Flannery was a surprise move.

Culp was named to the GE board in April.

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