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Big bucks in beauty ads

By LEI CHAVEZ

Doctors lament that some products are falsely marketed as whiteners

By Leilani Chavez
Newsbreak’s Maggie de Pano fellow

MANILA, Philippines – Since 2004, beauty product distributors have been marketing glutathione’s whitening promise even without sufficient clinical back-up.

The campaign focuses on glutathione’s whitening effect but downplays the potential negative effects of glutathione overdose. Of the 61 brands registered with the Food and Drugs Administration (FDA), for example, 15 bear the words “white,” “skin light,” “illumines,” and “glow.”

And since they are labeled as food supplement, the risks are even more downplayed.

Some doctors take issue with what they consider as “unethical” marketing. “Glutathione supplements are being approved by FDA as a nutritional supplement… But once it is approved, they (companies) package it as a whitener,” says Dr. Belen Dofitas of the Philippine Dermatological Society (PDS).

In the first part of our special report, we wrote that as food supplements, glutathione capsules should not be marketed as drugs or cosmetics. Thus, advertisements claiming that the use of glutathione can whiten complexion and cure certain diseases are clearly against the law, according to the FDA.

The misleading claim is aggravated by supposed testimonials from celebrities, which has been the norm in advertising. Thus, sales get a boost from Filipinos’ obsession with fair complexion and celebrities.

Since the capsules were introduced in 2007, celebrity endorsers have been tapped to help improve sales.

Ad for Metathione, a brand of Glutathione on a billboard along Quezon Avenue

Top brands MET Tathione and Lucida-DS extensively utilized this strategy.

MET Tathione’s roster of celebrity endorsers include Pauleen Luna, Andrew Wolfe, Albert Martinez, Jake Cuenca, Lani Mercado, Jennylyn Mercado, Valerie Concepcion, Tessa Prieto-Valdes, Cory Quirino, Ruffa Gutierrez, Richard Gutierrez, Angel Locsin, Kris Aquino, and Maricar Reyes, their current endorser.

Lucida-DS, on the other hand, was bannered by Nancy Castiliogne, Francine Prieto, Gabby Concepcion, and Valerie Concepcion. The most prominent endorser of Lucida-DS was Sen. Loren Legarda in 2008.

Advertising boom

The huge advertising of glutathione products has spread across all media.

In Thailand, ads on whiteners border on being racist. One train advertisement portrayed empty seats reserved “only” for white people.

A quick Google search on glutathione capsules will show 2.4 million links to resellers in Malaysia, the Philippines, and Thailand. In the Philippines, there are more than one million links to sites selling glutathione pills while there are 524,000 in Indonesia and 704,000 in Malaysia.

These are mostly individual resellers or importers of capsules. Majority of these products, says lawyer Ronald de Veyra of the FDA, are not registered and approved.

In the Philippines, advertisements are mostly centered on billboards and print ads. Only a handful run TV commercials.

In a survey conducted by Nielsen Philippines in the first half of 2008, advertisements from beverages, food, and pharmaceuticals kept the industry afloat during the economic crisis. Food supplements were placed under the pharmaceuticals category by the agency, lumped together with drugs and cosmetics.

Surprisingly, ad spending on food supplements grew faster than beverages and food.

The pharmaceuticals’ ad spending has increased by 47% while spending in the food and beverage increased by 38% and 58%. In the pharmaceutical category, the top placers were corporations that distribute supplements, whose ad spendings grew more than 100%.

Records from the FDA also placed food supplement media spending at around P3 billion in 2007 alone. Sales of the top 7 brands with 6 celebrity endorsers were pegged at around P5 billion.

What about ads for glutathione as food supplement? It it is difficult to segregate its share in the

ad pie for lack of available data.

For instance, White Beauty Corp, which distributes MET Tathione capsules, has not been submitting financial statements to the Securities and Exchange Commission since 2008.

Ana Liza Peña of White Beauty Corp. attributes this lack of public records to the company’s transition from a partnership to a corporation

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in 2008. This was when sales were at its peak. “We submitted a financial statement with the SEC but it was not accepted. They said it’s because we’re no longer a partnership,” she explains. “In 2008 we established a corporation.”

She also adds that from 2009 to 2010, White Beauty Corp. did not submit financial statements because they were still organizing the records of White Beauty Philippines and White Beauty Corporation.

Further, White Beauty Philippines submitted in 2007 a financial statement that does not segregate advertisements and promotions. The company reasoned that they only started extensive advertising a year after.

Pauleen Luna’s MET Tathione billboard advertisement, however, came out in March 2007, put up between the intersection of EDSA and Quezon Avenue.

According to Peña, they will be submitting a financial statement soon and ad costs will then be lumped with the marketing section. She says though that it is against the company’s mandate to disclose sales and ad spending.

Bucking the odds

Before the boom, glutathione capsules were primarily recommended to dermatologists who in turn recommend the pills to patients.

These capsules were given to clients who have melasma or clients with brown patches on the skin. The capsules were recommended to even out the skin tone. “It was a very poor market. Many were selling but the buyers were not very receptive,” shares Bing Miranda, head of the operations and marketing department of White Beauty, the local distributor of MET Tathione.

But the year 2008 was considered the golden year of glutathione. That year, sales increased by more than 100% based on some figures from White Beauty’s submitted public documents.

However, there is no exact figure to identify the size of the industry.

By 2008, beauty industry giant Belo Medicals entered the bandwagon and released its glutathione capsule product. That year, Belo Medical posted its highest sales–P94 million–in the last four years, though this dropped to 75.1 million in 2009.

Sales data: Belo Medical Group (double-click image to enlarge)

Despite the decrease in gross sales in 2009, the Belo Medical Group profit increased from P43.5 million in 2008 to P55.5 million in 2009.

Market frontrunner MET Tathione, on the other hand, had the highest increase in sales since it started in 2004.

MET Tathione was among the first batch of food supplements that was approved by FDA in 2007. After receiving the approval, its distributor White Beauty began extensive advertising.

Robyne Monreal, White Beauty Corp. sales manager, admits that it was easier to market glutathione capsules after it was approved as food supplements because there was no need to court dermatologists to recommend glutathione capsules.

The marketing strategy was fairly simple: capitalize on its supposed whitening effect with its actual antioxidant properties secondary.

“Filipinos lean toward whiteners eh. ’Yung (information sa) pagiging antioxidant niya (glutathione) will follow after siya ma-introduce as whitener,” Monreal said. [Filipinos lean toward skin whiteners. People get to know glutathione’s antioxidant properties afterward.]

The messaging proved to be a coup.

In two years, MET Tathione sales increased by more than 1,000%. Gross sales reached P106.9 million in 2009 from P1.6 million in 2007.

Met Tathione Gross Sales through White Beauty Philippines

Like most fads, the sales however were bound to hit a plateau. This was mainly attributed to the scandal that hit the glutathione industry at the time.

Still, the market remains profitable.

“Kasi ‘pag biglang nag-boom, lahat ‘yun ita-try. ‘Yung natitira lang sayo ‘yung loyal market. Noong 2009, mga nag-around 50% (ang binaba),” Monreal shares. [During the glutathione boom, everyone wants to try. What’s left is the loyal market. By 2009, sales dropped by almost 50%.]

Lucida’s loss, MET Tathione’s gain

Before MET Tathione grabbed the top spot, its rival Lucida-DS, which was being distributed by United Shelter Health Products (USHP), was the leading brand.

USHP, however, has been mostly inactive in the Philippines since the 2008 scandal.

Lucida-DS fell from grace after ABS-CBN broadcaster Korina Sanchez exposed in 2008 a Bureau of Food and Drugs (BFAD, now FDA) laboratory test that showed that Lucida capsules lacked the glutathione milligram it purportedly contains. As a result, certain batches of three brands were recalled by the BFAD: Glutalife, Lucida-DS, and Vaniderm. Both Lucida-DS and Vaniderm were being distributed by USHP.

According to the results conducted by the Philippine Institute of Pure and Applied Chemistry (PIPAC), the capsules only contained 6.8mg of glutathione, not 500mg.

The scandal further escalated when Sen. Loren Legarda demanded that USHP dismantle its billboards featuring her as one of its endorsers. “As an advocate of consumer welfare and protection, Legarda declared that she will not tolerate misrepresentation of facts… that tend to deceive the consumers,” the senator’s office said then in a press statement.

Instead of offering refunds, USHP offered a different marketing strategy without addressing the issue.

Those who bought the bottles were encouraged to join the raffle by sending the cover with their names and contact details. The prize was P1 million.

Despite the controversy, USHP never publicly admitted that the bottles were indeed below the supposed glutathione content.

USHP was registered with the SEC but submitted nothing, not even basic information or financial statements, since it was established in 2005. The BIR database also has no records.

We sent interview requests to UHSP’s company mail but received no response. The company office at the Philippine Stock Exchange building in Ortigas was closed and bore another company’s name. The security of the building confirmed that personnel from UHSP seldom go to their office. The company website mostly caters to buyers in the United States and Canada.

Yet, the Lucida mess did not deter Filipino consumers from taking capsules of glutathione to whiten their skin. Many have been lured by massive advertising. It appears that one company’s discredit is not enough to harm glutathione’s reputation of quick-fix whitening. – Newsbreak.ph

Next: Weak regulation, consumer activism

(The series was produced under the Maggie de Pano Fund for Investigative Reporting on Health. The Fund, which is managed by Newsbreak, is made possible through a grant from Macare Medicals, Inc.)

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