Suit says Avalon's products not organic

SAN FRANCISCO -- The company that makes Dr. Bronner's Magic Soaps, a counterculture staple, sued a Petaluma rival and other competitors Monday over the validity of their organic labels.

The lawsuit, filed in San Francisco Superior Court, comes as the once-quiet "green" cosmetic sector has soared in popularity, luring several Wall Street corporations into the field.

The suit accused 10 companies -- including homegrown Petaluma company Avalon Natural Products -- and two industry groups of selling and promoting soaps, lotions and other products that are manufactured using conventionally grown crops or chemicals derived from petroleum.

Dr. Bronner's alleges that it's unfair to label such products organic and is asking a judge to prevent Avalon's parent company, Hain Celestial Group Inc., and the other companies named in the lawsuit from doing so.

"There is widespread abuse of the word 'organic' throughout the industry and it's spiraling out of control," said company president David Bronner. "It's an industry based on marketing and hype and the organic labels are a form of corrosive marketing."

Bronner said a negotiated settlement before the lawsuit was filed broke down over some of the companies' refusal to cut out the use of petrochemicals from products bearing organic labels.

Avalon became a leader in the market for natural and organic skin care products after being founded in Petaluma in 1989 by Mark and Stacey Egide. The couple sold Avalon in 2002 to a Boston-based firm, which in turn sold it in 2006 for $120 million to Hain Celestial Group.

In 2006, Hain also purchased Petaluma-based Spectrum Organic Products, an organic oils and nutritional supplements company that employed about 60 people. However, it cut 35 Spectrum positions in Sonoma County less than a year after the acquisition.

Hain also moved Avalon's chief executive position to the East Coast. However it is unclear how many of Avalon's 50 employees remain after the 2006 acquisition. The company did not return a telephone call seeking comment Monday.

Some of the defendants are already fighting back. One of the two industry groups, Ecocert Inc., last week filed a pre-emptive lawsuit of its own against All One God Faith Inc., the company that makes Dr. Bronner's soap. Ecocert is a French company that certifies products, including cosmetics, as "organic" according to European Union standards.

According to Ecocert's lawsuit, also filed in San Francisco, Bronner threatened to drag the company through "the proverbial mud and to engage in widespread and negative publicity aimed at sullying" Ecocert if it refused to adopt more stringent certifying standards.

The Ecocert lawsuit asks a judge to essentially toss out Bronner's lawsuit.

Many products use the petroleum-based chemicals to produce better suds in soap and shampoo. Bronner said the same effects can be achieved without the chemicals, but the manufacturing takes more time and money.

Bronner said business is booming at All One God Faith Inc., the name his grandfather gave the company 60 years ago. Since then, it has been churning out soap that caught on with hippies in the 1960s, yuppies in the 1980s and now the growing legions of natural food shoppers who flock to Whole Foods grocery stores and study product labels.

The company's soap stands out for its quirky labels that are packed with minuscule musings from Marx and Mao, to Oprah Winfrey and Carl Sagan.

Bronner said the 50-employee company's annual revenues increased 20 percent last year to $23 million and he expects similar growth this year. That's why companies such as Estee Lauder, whose Aveda line was called into question in the lawsuit, and Hain Celestial are rushing to compete with their own versions of organic personal care products.

He said there are no formal organic labeling regulations for the personal care industry as there are for the food industry, which requires U.S. Department of Agriculture approval.

"We are long overdue for decisive action," Organic Consumers Association director Ronnie Cummins said. "It's very important that companies using labels that say organic are actually organic; otherwise they'll degrade the whole organic notion."

The Finland, Minn.-based association is backing Dr. Bronner's lawsuit, which is essentially a false advertising and unfair business complaint filed under California's unique "personal attorney general" statute.

Last month, the association released a study that showed 48 "natural" and "organic" soaps, shampoos and other products tested positive for a petrochemical.

Representatives for Hain Celestial Group and Aveda did not immediately return calls for comment Monday.

Staff Writer Nathan Halverson contributed to this story.