Herbalife's Business Model Draws Scrutiny From Senators in Italy
- Lawmakers call attention to multilevel-marketing companies
- Herbalife generates 3 percent of its sales in the country
An employee stacks boxes of products for orders at the Herbalife Ltd. Los Angeles distribution center in Carson, California, U.S., on Tuesday, March 4, 2014.
Photographer: Patrick T. Fallon/Bloomberg
A handful of Italian senators called on the government to scrutinize Herbalife Ltd. and its peers, likening their multilevel-marketing operations to a pyramid scheme that needs greater oversight.
The six senators, mostly from the Democratic Party, cited a report showing that more than 84 percent of Herbalife distributors in Italy haven’t made any money, according to a transcript. They called on the Economic Development Ministry to review the companies’ activities, arguing that their tactics may be illegal. It wasn’t immediately clear what action, if any, the ministry would take.