Herbalife News : Vandaele'Analysis Determines Herbalife'Operations Consistent With Legitimate MLM - Direct Selling News Reviews & Updates of Companies

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Herbalife News : Vandaele'Analysis Determines Herbalife'Operations Consistent With Legitimate MLM

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 Nutritional supplements maker Herbalife Ltd.HLF ) said Walter Vandaele determined that, "Herbalife's U.S. business operations are consistent with the socially beneficial Multi-Level Marketing model and inconsistent with the socially harmful pyramid scheme model."
 mlm news paperHerbalife released the findings from research and analysis
conducted by Walter H. A. Vandaele, of Navigant Economics, LLC regarding the company's U.S. business operations. Vandaele, engaged by the Company to conduct this economic analysis, assessed whether Herbalife's operations appropriately are classified as a beneficial, legitimate Multi-Level Marketing or "MLM" firm.
The findings of Vandaele's research included an estimated 97% of Herbalife's U.S. product volumes are purchased from Herbalife for end-use consumption. The vast majority of Herbalife's product volume (80%) is consumed by individuals outside the Member network (39%), or consumed by Members who join the Herbalife network primarily to receive product discounts for their own use or that of their family (41%).
Applying an economic test that would require Member performance payment incentives to be primarily funded out of retail-based product sales to be classified as a legitimate MLM, Herbalife's U.S. business operations constitute an MLM and not a pyramid scheme.
According to Vandaele's Analysis, Herbalife products have significant intrinsic value and market demand.
The company stated that Vandaele's findings are based on review and analyses of a variety of information and data sources, which was performed beginning in the summer of 2013. This information includes results obtained from Herbalife-sponsored surveys of its U.S. customers and Members that were undertaken by the market research firms Lieberman Research Worldwide and The Nielsen Company, B.V.
In addition to survey results, Vandaele also obtained from Herbalife an extract of profile and financial data for all individuals enrolled as U.S. Herbalife Members at any time during calendar year 2012.
Vandaele is an economic expert with significant experience in, among other areas, the regulation and operations of firms in the consumer goods industry. Among his many professional accomplishments, he has previously served as Economic Advisor to the Director, Bureau of Competition and as Assistant Director for Regulatory Evaluation, Bureau of Consumer Protection at the U.S. Federal Trade Commission or "FTC".
On Monday, William Ackman of hedge fund Pershing Square said he would prove that Herbalife was a fraud company that sells its nutritional products under a pyramid scheme.
Los Angeles, California-based Herbalife is a multi-level marketing company that sells nutritional supplements, sports and fitness products. It has been at the center of attention since December 2012, when Ackman alleged that the company is a pyramid scheme that would fail soon.
Ackman's charges have led to probes by the Securities and Exchange Commission, Federal Trade Commission, FBI and two state attorneys general.
Herbalife, which has all along denied the charges, has some support from activist investor Carl Icahn, a major shareholder in the company and who feels it has a legitimate business model.
Ackman said he had some audio and video recordings to prove his allegations against Herbalife.


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Source :- http://www.nasdaq.com/article/vandaeleanalysis-determines-herbalifeoperations-consistent-with-legitimate-mlm-20140722-00753#ixzz38DmmZ8sI

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