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October 24, 2012

VerMints Under Fire For Violating Labeling Law

VermintsThe attorney general's office is suing VerMints for $60,000, claiming the breath mint company violated a consumer protection law and mislabeled its tins to falsely promote its product as Vermont-made.

That leaves a bad taste in the mouth of CEO Gary Rinkus, who calls the lawsuit unnecessarily harsh treatment from the AG's office for what Rinkus believes was an honest mistake. 

The complaint says that language such as "Vermont's All Natural Mints" was — "and continues to be" — an "unfair and deceptive trade practice" that violated the state's Consumer Protection Law. The case also calls out the company's name for sounding too similar to "Vermont." VerMints are manufactured in a Canadian plant, and most of its ingredients don't originate in Vermont. 

Specifically, the complaint sites Consumer Protection Rule 120, which since January 2006 has governed claims of Vermont origin. Under the rule, a product can only be called "a Vermont product" if the company is based in Vermont and 75 percent of its ingredients come from Vermont. 

But Rinkus says he didn't hear about the 2006 rule until he received a note from the AG's office in 2011 calling him out on the violation. He says 97 percent of his ingredients, all organic, come from the United States, but that he can't source products like cane juice and tapioca syrup in state. And while he manufactures the mints at a facility in two hours north of Burlington in Canada, he explains that's because the process requires specialized equipment, and most producers in the United States weren't willing to take on the small batch sizes Rinkus required. 

"Did I make a mistake? Obviously I did," says Rinkus. But he says the mistake wasn't malicious or intentionally deceptive. "I'm just trying to sell mints and make money, you know?"

When he received the AG's complaint in 2011, Rinkus says he called Assistant Attorney General Elliot Burg to try to resolve the problem. Burg, he alleges, told him to hire a lawyer. Burg didn't immediately respond to messages requesting an interview.

"There's no middle road," Rinkus says. "It's just hard line. ... The state of Vermont doesn’t need the attorney general going after small companies and beating them up for money."

Rinkus has since tweaked his labels; he scrapped "Vermont's" for "VerMint's" in a stamp-line image advertising "VerMint's Organic Pastilles" and "VerMint's Organic Mints." Though "VerMint" might evoke the state's name, Rinkus points out that "ver" is the Latin root word for "truth," saying the wordplay has weight for a company that talks up breath mints made without artificial ingredients. 

The AG's complaint also accuses VerMints of disingenuously claiming to be a "Product of the U.S.A." To that, Rinkus says he was advised by a U.S. Department of Agriculture program for small specialty-food businesses to include such a label on his tins, because nearly 97 percent of his ingredients originate in the United States.

Rinkus bought VerMints from Vermont entrepreneur John Mitchell in 2003, and shortly thereafter moved the business from Saxtons River to Burlington. With the help of Burlington branding firm Harvey|Severance, he launched a redesign of the product later that year and then "just started plugging away," as Rinkus says. "We beat the street and got out there." Now the company's website lists its address in Braintree, Mass. The company remains small — just three employees — and last year sold nearly 30,000 pounds of breath mints. Rinkus says he doesn't have the money that Burg is suing for.

"You’ve got to sell a lot of mints for $60,000," says Rinkus.

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