THE INNER office memo dated Jan. 25, 1980, read: "Today Botsford Ketchum resigned the Shasta account."

Agencies usually resign accounts for one of two reasons: because the billing isn't sufficient for the work involved, or the agency is going after another, larger account in the same field. Occasionally, but it's very rare, one account executive explained, "It's because of a conflict of personalities or marketing approach."

But the memo Botsford Ketchum's president, Don Sullivan, had sent to his employes offered another reason:

"We believe in the principles we stand for and the people who have helped build this agency. We do not intend to change our course. Consequently we believe Shasta will be better served by a different kind of agency and that our people can work better on other accounts.

Advertising agencies seldom drop a $6 million plus billing for principle. This is the second time Botsford Ketchum has done so. (The first was when it resigned the Yamaha account). This time the principle involved the content of Shasta's advertising for its new fructose-sweetened soft drinks, specifically the fructose itself.

For its part Shasta released a statement saying:

"Botsford Ketchum's abrupt termination of its advertising relationship with Shasta Beverage came as a complete surprise. Naturally we are disappointed that they have elected to discontinue their services with us during this extremely important period."

While no one at Botsford Ketchum would talk for attribution about the specific reasons for the agency's decision, it has been possible to piece together what happened.

Said one agency executive: "There was an honest disagreement on how to handle the account. We are not just order takers. We feel we are part of the client. I don't know why they wouldn't see there were other ways to advertise their product without resorting to things" to which the agency objected.

Botsford Ketchum was not alone in wondering about the content of the ads it was writing. Last fall the Federal Trade Commission began to look into the various claims made for fructose and how it was being advertised, not only by Shasta, but by others as well.

How does an advertising agency find itself in a position of disagreeing with a client about ad copy the agency itself had written? An explanation of the product which caused the problem may help to explain the circumstances.

What has come to be called fructose is actually several different products. Pure fructose is fruit sugar. It occurs naturally in fruits, vegetables and honey. It is somewhat sweeter than sucrose, ordinary table sugar, though it has the same number of calories. In certain mediums, cold drinks being one, fructose is one and a half times as sweet as sucrose. Consequently less can be used. Fructose is considered more expensive than sucrose. Sucrose is 50 percent fructose and 50 percent glucose.

What Shasta calls fructose is not pure fructose. It is a product whose full name is high fructose corn sweetener (HFCS) which is 55 percent fructose, 42 percent glucose, not so different from sucrose. High fructose corn sweetener is less expensive than sucrose and that is why many food processors are turning to it, including Coca-Cola, one of the biggest sucrose users of them all. The giant soft drink company announced last month it would replace half of the sucrose in its drink with HFCS.

Many people, and that could include advertising agency account executives, do not realize that the HFCS is not at all the same as pure fructose. And food processors who use HFCS do not rush to point out this distinction. Usually they have to be asked point blank.

The February issue of Nutrition Action, a publication of the Center for Science in the Public Interest, outlined some of the problems with the Shasta ads for fructose sweetened soft drinks.

"Shasta's soft drinks, made with 55 percent HFCS, are advertised as an (alternative to ordinary sugared soft drinks) containing fructose 55 (a kind of natural sweetener found in fresh fruits and honey) instead of (ordinary refined sugar). Shasta's ads are deceptive on several counts," Nutrition Action wrote. "First they imply that fructose 55 is pure fructose. Secondly, they suggest that fructose is not refined and that fructose 55 is found in fresh fruits and honey:

"Furthermore, Shasta's fructose sweetened cola contains only 16 fewer calories in 12 ounces than its regular cola. Sixteen calories is only a tiny reduction of an individual's total daily caloric intake. . . ."

The Center for Science in the Public Interest, which questioned the Shasta ads and TV commercials in the Nutrition Action article, as well as the labeling and claims made by other users and processors of all forms of fructose, is planning to file a petition with the Food and Drug Administration and the FTC.

According to the center's director, Michael Jacobson, "We want to nip the fructose deception in the bud. We've been reviewing both the ads and the labeling for the products that contain fructose and find some deception in both." Jacobson said the "Shasta ads imply that the sweetener is fructose whereas in fact it is essentially the same as sucrose.

"The older ads showed pictures of soft drinks surrounded by fresh fruit and referred to the sugar as fruit sugar and all that implies to people, that the sweetener is derived from fresh fruit. One can even imagine that an extract of those fuits is in the soda, which couldn't be further from the truth."

One source within the agency "definitely agreed" that Shasta's ad "implied lower calories" and that their "fructose is the same as pure fructose."

Why did Botsford Ketchum resign the account even though it had produced the ad copy? It may seem to be an inexplicable situation until one realizes that an advertising agency depends on its client for technical information about the product that is being advertised. Botsford Ketchum appears to have relied on what Shasta told it about fructose.But eventually, through outside sources, the agency came to the conclusion that it needed better information than it was getting.

While the ads and television commercials were approved by legal counsel and stood up under television network scrutiny, neither the agency's own lawyers nor the networks' standards and practices departments are likely to have been aware of the technicalities involved in nutritional differences.

Whether or not Shasta was aware that the public did not discriminate between pure fructose and high fructose corn sweetener, they were certainly aware that the public perception of fructose is often incorrect. In October 1979, Cecil Lowry, Shasta vice president for science and technology, told The Washington Post: "A lot of people confuse fructose with diet sweeteners. Surprisingly, a lot of people think fructose is a substitute for saccharine.

It seems reasonable to conclude that such people would think of fructose sweetened soft drinks as diet drinks. And in Canada, where 90 percent HFCS is used in soft drinks, the calorie count is half that of sucrose-sweetened soft drinks.

Whether a product contains pure fructose or HFCS may make a difference to diabetics. While there is disagreement among diabetologists over whether or not diabetics may be able to use pure fructose safely, there is no disagreement about whether or not they can safely use HFCS in place of sucrose. They cannot.

A nutritionist with the American Diabetic Association described Shasta's ads as "deceptive. They are not telling the full story, not presenting all the facts," she said.

Shasta's inability to make a distinction between pure fructose and HFCS is carried on by its nutritionist Susan Draudt. Interviewed by the Associated Press in February, Draudt said: "Fructose doesn't require instant absorption by the body the way sucrose does. As a result, it doesn't cause the (roller coaster) effect that sucrose can -- high blood sugar level followed by a letdown, triggering the need for more sugar."

Draudt also told the interviewer that fructose doesn't promote the growth of plaque on teeth the way that sucrose does. These are reasons, she noted, that you can feel a bit better about drinking soft drinks.

What Draudt says applies only to pure fructose, not the HFCS used in her company's soft drinks.

Shasta doesn't agree, of course, with its critics but the thrust of its advertisements and commercials has changed dramatically. The emphasis is now on flavor -- "Shasta lets the flavor fly, fructose is the reason why."

Asked to explain the situtation, James Groebe, who is Shasta's executive vice president for sales and marketing, said:

"We felt we have been on firm ground saying what we have said. I think we have made it fairly clear in our advertising.

"I guess the most important point I want to register is the change in direction that took place with Botsford and Shasta in the second group of ads. In the new ads we have talked more about the taste of the product.

"Consumers can be confused on many issues and we have tried to make it more clear. High fructose corn sweetener is how we are now labeling on our cans instead of just saying 'fructose'. We felt we never tried to imply we had fewer calories as a result of sweetening with high fructose corn sweetener."