Forever Living Products

Forever Living Products International, Inc. (FLPI) is an American privately held multi-level marketing (MLM) company based in Scottsdale, Arizona, which manufactures and markets aloe vera-based drinks and bee-derived cosmetics, dietary supplements, and personal care products.[1] The company was founded in 1978 by CEO Rex Maughan. After acquiring the company Aloe Vera of America by the 1990s,[2] the company reported a network of 9.3 million distributors and revenue of $1.7 billion in 2010, and in 2006 they reported having 4,100 employees.[1][3]

Forever Living Products International, Inc.
IndustryMulti-level marketing
Founded1978
FounderCarl Jensen and Rex Maughan
HeadquartersScottsdale, Arizona, United States
ProductsAloe vera- and bee-based products
Revenue$3.8B (2018)
Number of employees
4100 (2006)
SubsidiariesForever Resorts, Aloe Vera of America, Forever Aloe Plantations, Forever Nutraceutical
Websitewww.foreverliving.com

History

Forever Living was founded in 1978 in Tempe, Arizona[4] by Carl Jensen and Rex Maughan.[1] By the 1990s, Maughan had purchased the Texas company Aloe Vera of America, with Aloe Vera of America selling its products to Forever Living for distribution.[2] Some journalists have likened the multi-level marketing business model of Forever Living's distribution system to that of a pyramid scheme.[5]

Forever Living Products headquarters in McCormick Ranch in Arizona in 2007. The company's resort division owns several similar properties.

In 1983, the company was named No. 6 on Inc. Magazine's annual Inc. 500 list of the fastest-growing private companies in the United States.[6]

According to Arthur Andersen's Top 100, as of 1993, Forever Living Products International was Arizona's second-largest private company.[7] As of August 1995, Forbes reported the company's product line included "deodorants, toothpaste, laundry detergent and three dozen other products, nearly all of which contain extract of aloe."[8]

Forever Living reported unaudited annual revenue exceeding $1.15 billion in 2005[1] and ended the year with around 150,000 distributors[9] and 55 employees.[10] The following year, Forever Living was listed at No. 340 on the Forbes 400 list, which ranks the largest private companies in the United States. At the time, the company was described as having 4,100 employees and sold its product in 100 countries.[1]

In 2010, the company reported unaudited revenue of $1.7 billion and a network of 9.3 million distributors.[3] The company was active in over 165 countries as of 2018.[4] In February 2015, the company announced they had appointed a new management team to "oversee the affairs of the company in Nigeria."[11]

In 1996, upon suggestion of the American authorities, the Internal Revenue Service (IRS) and the National Tax Agency of Japan (NTA) initiated a joint audit of Rex and Ruth Maughan and related entities Aloe Vera of America (AVA), Selective Art Inc., FLP International, and FLP Japan for the period of 1991 to 1995.[12] In 1997, the NTA imposed a penalty tax of 3.5 billion yen on Forever Living's Japan division for concealing income of 7.7 billion yen over the five-year period.[13] Later that year, AVA, Rex and Ruth Maughan, Maughan Holdings, Gene Yamagata, and Yamagata Holdings[14] sued the IRS for unauthorized disclosure of tax return information.[13] In the midst of the lawsuit, The IRS asked the NTA to drop its decision against Forever Living, and in 2002, the agency “grudgingly complied with the IRS's request”, announcing that the penalty tax had been effectively withdrawn.[13] In February 2015, a USA district court ruled that the IRS knowingly provided some false information about AVA to the NTA, in violation of the United States' tax treaty with Japan.[15] and awarded three of the plaintiffs one thousand dollars each in statutory damages.[15]

In 2004 claims made about Forever Living products were found to be in violation of several laws in Hungary related to advertising, registration of nutritional products, and the use of cosmetics as medicinal agents. As a result, the company was fined 60 million HUF (approximately US$280,000).[16]

In 2007, author Richard Bach made claims against the company for copyright infringement and trademark infringement.[17] The lawsuit stated that for over 20 years Forever Living had used the character, storyline, and copyrighted excerpts from the novel Jonathan Livingston Seagull to promote its marketing plan, and also used the motion picture and novel as its corporate logo.[18][19] The claim was satisfied through arbitration,[20] and shortly after, Forever Living changed its company logo[21] from a seagull to an eagle.

In 2015, Forever Living was criticized by the UK Advertising Standards Authority for making false claims about the health benefits of its products, which were sold as a cure for various diseases ranging from diabetes to Crohn's disease. The company was also warned not to use health professionals in its promotional materials. Subsequently, the UK Medicines And Healthcare Products Regulatory Agency launched an investigation after it was revealed that NHS staff were moonlighting as sales people.[22][23][24]

Between 2011 and 2016, Forever Living Products and its associated companies have been sued multiple times in the Superior Court of California by Environmental Research Center (ERC), a California non-profit corporation,[25] for violations of Proposition 65 or the Safe Drinking Water and Toxic Exposure Act.[26][27] The ERC alleged that levels of lead in supplements, makeup, drinks, protein shakes, and bee pollen manufactured by Aloe Vera of America and distributed by Forever Living Products contained lead in quantities requiring warnings to consumers. The products identified in the complaints are no longer available for sale in California and some of the products alleged to contain lead including Garcinia Plus, Forever Lite shakes, and Bee Pollen were part of the Clean 9 kit which was marketed as a "detox" program.[28]

See also

References
  1. "The Largest Private Companies: #340 Forever Living Products Intl". forbes.com. 2006. Retrieved June 29, 2008.
  2. "ALOE VERA OF AMERICA INC v. UNITED STATES". Case Law. July 30, 2009. Retrieved June 6, 2015.
  3. Emmert, J.M. (2011). "DSN Global 100: The Top Direct Selling Companies in the World". Direct Selling News. Retrieved June 6, 2015.
  4. "About Forever Living". www.foreverliving.com. Retrieved January 31, 2015.
  5. Max de Leon (April 28, 2003). "A very thin line between multilevel marketing and pyramid schemes". Retrieved April 21, 2014.
  6. Richman, Tom (December 1, 1983). "Going Their Way - Whatever else catapulted them to the peak, it wasn't conformity to the norms of business". Inc.com. Retrieved May 27, 2015.
  7. Huston, Jenni (November 12, 1993). "No. 2 private company is 'best-kept secret' in state. (Forever Living Products International Inc.) ( in state)". The Business Journal. Trove. Archived from the original on June 20, 2015. Retrieved October 4, 2019.
  8. Palmeri, Christopher (August 14, 1995). "The aloe juice man. (Forever Living Products International)". Forbes. Business: Highbeam. Archived from the original on May 30, 2015. Retrieved May 27, 2015.
  9. "Forever Living Products hopes to see sales up in H2". Ziarul Financiar. August 2006. Archived from the original on August 4, 2008. Retrieved June 29, 2008.
  10. "Forever Living Products hopes to see sales up in H2". Ziarul Financiar. August 2006. Archived from the original on August 4, 2008.
  11. Bilbur, Jon (February 20, 2015). "Forever Living Product Gets New Management Team In Nigeria". The Tide News Online. Retrieved May 27, 2015.
  12. Cope, Charles W. (February 2015). "United States Held Liable for Making False Statements to Foreign Tax Authority". copetax.com. Retrieved May 27, 2015.
  13. "Tax agency takes back penalty tax on U.S.-affiliate firm". Kyodo News International, Inc. July 26, 2002. Retrieved May 27, 2015.
  14. "376 F. 3d 960 - Aloe Vera of America Inc v. United States". OpenJurist. July 19, 2004. Retrieved May 27, 2015.
  15. Kroh, Eric (February 11, 2015). "Ariz. Judge Docks U.S. $3,000 For Disclosing Taxpayer Info". law360.com. Retrieved May 27, 2015.
  16. "Hungarian Economic Competition Office fined FLP for 60 million HUF". Archived from the original on January 10, 2014. Retrieved November 25, 2011.
  17. Schwabach, Aaron (2011). Fanfiction and Copyright. Ashgate. pp. 39–40. ISBN 978-0-7546-7903-5.
  18. Law Updates: Richard Bach et al
  19. "Bach v. Forever Living Products US, Inc., 473 F. Supp. 2d 1110". February 6, 2007. Retrieved May 27, 2015.
  20. "Bach v. Forever Living Products U.S., Inc". Law Updates. July 13, 2007. Retrieved May 27, 2015.
  21. "ASA Ruling on Forever Living Products (UK) Ltd". The Advertising Standards Authority Ltd / The Committee of Advertising Practice. September 2, 2015. Retrieved September 27, 2018.
  22. "Forever Living Warned by ASA". Insider Media Ltd. September 1, 2015. Retrieved September 27, 2018.
  23. Harrison-Dunn, Annie (June 14, 2016). "ASA puts maca claims to bed following Facebook fallout". Nutra Ingredients. Retrieved September 27, 2018.
  24. "About | Environmental Research Center". www.erc501c3.org. Retrieved January 23, 2020.
  25. "ERC v Forever Living 2011". webapps.sftc.org. Retrieved August 30, 2019.
  26. "ERC v Forever Living Products 2013". webapps.sftc.org. Retrieved August 30, 2019.
  27. Jan 22, the Diet Self Help Team |; Guides | 0, 2019 | Diet (January 22, 2019). "Clean 9 Detox Diet: The Complete Review and Beginner's Guide". Diet Self Help. Retrieved August 30, 2019.
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