One distributor in South Los Angeles says she spends about $1,200 a month on Herbalife products but only earns enough to help pay the rent at her exercise studio.Īn 18-year-old Guatemalan-born mother who would only give her name as Mary currently works up to half a day for no pay at a club in Newark, though she does get free shakes. there were a minority of distributors who were skeptical about the business they had gotten into. "The overwhelming majority of our consumers and members have been satisfied with their Herbalife experiences," a company spokesman said. Herbalife and its supporters argue that it is a legitimate multi-level marketing company that has been growing now for 34 years, sells products that are in demand, and helps many of its 3.7 million distributors worldwide to make a living. It is unclear what the precise details of those probes are, and it is not clear whether they will lead to any action against Herbalife and how serious any such action could be.
HERBALIFE PRODUCT RELAX NOW INGREDIENTS SERIES
Partly as a result of lobbying by Ackman, there are a series of federal and state investigations into whether Herbalife is a pyramid scheme and related questions. The hedge fund estimates that sellers on average lose about $12,000 per year once rent for the clubs is taken into account. "These are pretend businesses," said David Klafter, senior counsel at Ackman's Pershing Square Capital Management.
His team has produced a video in which a series of former Herbalife distributors say they spent thousands of dollars on Herbalife products and training but ended up with losses and products they couldn't sell. Instead, he has argued that the whole Herbalife system is a pyramid scheme that won't survive - that it is based on recruiting new distributors to pay existing distributors (their incomes are based on their own sales and on the sales of those they recruit) and that the market will get saturated as more clubs are established often very near existing ones. Food and Drug Administration, though, has not evaluated those claims.Īckman's main line of attack has not been about the quality of the products and whether they work in controlling weight or improving health. Some doctors allied with Herbalife back the company's diet claims.
Herbalife recommends that those seeking to lose weight replace two of their three meals each day with shakes, which are made with a powder that contains protein and vitamins that is then mixed with soy or nonfat milk and some other ingredients depending on the flavor desired. "I am not a poor, dumb, Hispanic person, and I am not trying to take advantage of people," she said. Her club in Inglewood, just west of Los Angeles, encourages a friendly, cafe-like environment, with monthly weight-loss challenges. population.Īnd Angel Perez, a 29-year-old daughter of Mexican immigrants, says she makes a "decent, honest living" selling Herbalife products, earning about $3,000 to $4,000 per month. These claims could not be verified by Reuters but if true the comments cast a favorable light on Herbalife's products, especially as Hispanics suffer from higher rates of obesity than the overall U.S. In conversations at 10 such clubs that Reuters reporters visited in recent weeks in the Los Angeles area, New York and Newark, New Jersey, more than 20 people said they had lost a substantial amount of weight while consuming Herbalife products. These are consumers who stress their health has improved and distributors who are thankful to have the opportunity to run their own businesses. Yet a visit to some of the clubs that have been set up to dispense the company's shakes, teas and other items, largely to the Hispanic community in the U.S., shows that it has fans. He has taken a $1 billion bet against the company's stock and spent millions on research to attack the nutritional supplements seller, including making a video showing former distributors who claim they were deceived and lost money trying to sell its products.
Sept 5 (Reuters) - New York hedge fund manager William Ackman says Herbalife is a pyramid scheme that exploits the poor.
0 kommentar(er)
