Hearings, Reports and Prints of the Senate Committee on Commerce

not demonstrate widespread consumer dissatisfaction with packaging and labeling.

Finally a recent nationwide survey of consumers failed to uncover any significant discontent. This survey, done by the Opinion Research Corp. under sponsorship of the Grocery Manufacturers of America, was reported in February of this year. After deep probing, the survey found no significant areas of concern about packaging and labeling. To sum up this point, Madam Chairman, neither my company's extensive consumer contacts, nor the four regional consumer conferences, nor the recent nationwide opinion survey demonstrates widespread consumer discontent with packaging and labeling.

Our second objection to this bill arises from the conviction that additional legislation is not needed for the continued protection of the consumer. Our attorneys who have analyzed this bill are firmly of the opinion that both the Federal Trade Commission and the Food and Drug Administration now possess the necessary power to protect the consumer against deception and fraud connected with packaging and labeling.

Additionally, Federal law is complemented by State law, including the vigorously enforced weights and measures laws of the various States. In support of this statement, Madam Chairman, we have attached to this testimony-and we ask your permission to include it at this point in the record-an analysis which relates provisions of this bill to provisions of existing Federal and State laws concerning fraudulent and deceptive packaging and labeling practices.

Senator NEUBERGER. We will be glad to include it in the record. We will probably want to come back and ask you about this particular provision on the cents-off thing. We will put it aside until you finish your testimony.

(The material follows:)

PRESENT PROVISIONS OF FEDERAL AND STATE LAWS PROHIBITING MISLEADING AND DECEPTIVE PACKAGING AND LABELING PRACTICES

S. 985, introduced by Senator Philip Hart, Democrat, of Michigan, has been cited as the Fair Packaging and Labeling Act. It is alleged that the adoption of this bill into law would significantly benefit the American consumer by preventing the use of unfair and deceptive methods of packaging and labeling. In fact, the adoption of this measure is unnecessary to prevent deceptive packaging and labeling, for both the Federal Trade Commission and the Food and Drug Administration, as well as the various States agencies have long-standing authority to prevent deceptive acts on the part of the manufacturer. It should be noted, however, in addition to permitting the adoption of regulations in order to prevent the deception of the consumer, the bill permits the adoption of regulations in order to enable the consumer to make rational comparisons with respect to price. Although the publicity for this measure stresses the elimination of deception and fraud, the ultimate objective appears to be the prohibition of some form of alleged confusion in the marketplace. We would suggest that the elimination of freedom of choice resulting from the standardization of product containers and labeling will work to the detriment of the consumer.

To support the contention that there is adequate law today to prevent deception and fraud, we would refer the reader to the following analysis of the substantive provisions of S. 985 with references to applicable existing law.

8. 985

NET CONTENTS ON PRINCIPAL DISPLAY PANEL

Subsection 3(a)(1): “Regulations shall be promulgated to require the net quantity of contents * * * to be stated upon the front panel of packages * *

Applicable existing law

Section 403 (e)(2), Federal Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded- -*** unless it bears a label containing * an accurate statement of the quantity of the contents ***"1

Section 403 (f), Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded-if any word, statement, or other information required by * * this

Act to appear on the label *** is not prominently placed thereon with such conspicuousness *** and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use." 1

Section 1.9(1), FDA regulations under Food, Drug, and Cosmetic Act: "Information required by * ** the Act to appear on the label may lack that prominence and conspicuousness required by section 403 (f) * * by reason of the failure of such ** information to appear on the part or panel of the label which is presented or displayed under customary conditions of purchase ***" Section 5(a) (1), Federal Trade Commission Act: "Unfair methods of competition in commerce, and unfair and deceptive acts in commerce, are hereby declared unlawful." If the placement of the net weight statement caused the package to be misleading or deceptive, this provision of the Federal Trade Commission Act could be used to require a change in the placement of the net content statement.

All packaged commodities are subject to existing State weights and measures laws and regulations which require that the net contents statement "appear on the principal display panel of the package." (Sec. 6 of the Model State Weights and Measures Regulations.)'

8.985

TYPE SIZE AND STYLE OF NET CONTENTS STATEMENT

Subsection (3a) (2): “Regulations shall be promulgated to establish minimum standards with respect to the prominence of statements of the net quantity of contents (including minimum standards as to the type size and face * * *)” Applicable existing law

Section 403 (e) (2), Federal Food, Drug, and Cosmetic Act: "A food shall be deemed misbranded if in package form unless it bears a label containing an accurate statement of the quantity of the contents***”1

Section 403 (f), Federal Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded-if any word, statement, or other information required * * * this Act to appear on the label * ✶✶ is not prominently placed thereon with such conspicuousness * * * and in such terms as to render it likely to be read and understood by the ordinary individual under customary conditions of purchase and use." 1

Section 1.9 (6), FDA regulations under Federal Food, Drug, and Cosmetic Act: "Information required by *** the Act to appear on the label may lack that prominence and conspicuousness required by section 403 (f) of the Act by reason * * of smallness or size of type in which such *** information appears

Section 5(a) (1), Federal Trade Commission Act: "Unfair methods of competition in commerce, and unfair and deceptive acts in commerce, are hereby declared unlawful." If the lack of prominence of the net quantity statement resulted in an unfair or misleading deceptive act, this provision of the Federal Trade Commission Act could be utilized in prohibiting such act.

All packaged commodities are subject to existing State weights and measures laws and regulations which require that the net contents statement "shall be

1 Similar provisions exist for cosmetics and drugs.

conspicuous as to size and style of letters * Weights and Measures Regulations.)3

(Sec. 6 of the Model State

8. 985

PROHIBITION OF QUALIFYING WORDS TO NET CONTENTS STATEMENT

Subsection 3(a) (3): "Regulations shall be promulgated to prohibit the addition to *** statements of net quantity of contents of any qualifying words or phrases."

Applicable existing law

Section 403 (a) Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded-if its labeling is false or misleading in any particular."" Section 5(a) (1) Federal Trade Commission Act: "Unfair methods of competition in commerce, and unfair and deceptive acts in commerce, are hereby declared unlawful." If the qualifying words or phrases created an unfair competitive act, such act is unlawful under this section of the Federal Trade Commission Act.

All packaged commodities are covered by the requirement of the model State weights and measures regulations, which require that: "In no case shall a declaration of quantity be qualified by the addition of the word 'when packed' or any words of similar import nor shall any unit of weight, measure, or count be qualified by any term (such as 'jumbo,' 'giant,' 'full,' or the like) that tends to exaggerate the amount of the commodity." (Sec. 3.9 of the Model State Weights and Measures Regulations.)"

PROHIBITION OF CENTS OFF AND OTHER LABEL STATEMENTS INDICATING RETAIL PRICE SAVINGS TO THE CONSUMER

8.985

Subsection 3(a)(5) requires that regulations shall be promulgated to prohibit label statements representing that the product is offered for retail sale at a price lower than the ordinary and customary retail sale price, or that a retail sale price saving is accorded to purchasers by reason of the size of the package or the quantity of its contents.

Applicable existing law

Section 403 (a) Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded if its labeling is false or misleading in any particular." (Under this provision the FDA recently took action against an economy size package that the FDA alleged was sold at a higher price per ounce than a smaller size of the same product.)1

Section 5, Federal Trade Commission Act: "Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful." (The FTC has used its authority under this provision to take action against false or deceptive label statements as to price.)

Comment

(1) The provisions of existing law provide ample authority for taking action against either manufacturers, or retailers in interstate commerce where price saving offers are found to be false or deceptive.

(2) Subsection 3 (a) (5) of S. 985 would go far beyond the provision of present law by prohibiting all label statements that indicate that a retail price saving is being afforded to consumers, without regard to whether the statement was deceptive.

1 Similar provisions exist for cosmetics and drugs.

The model State weights and measures law has been adopted in most States. The model regulations have been adopted so far in over 15 States, and are being considered for adoption in others. In addition, a number of States have adopted a minimum type size scale that has been recommended by the National Conference on Weights and Measures. Any commodity in interstate distribution would almost certainly be subject to the requirement quoted above.

S. 985

PROHIBITION OF DECEPTIVE PICTORIAL MATTER ON LABELS

Subsection 3 (a) (6): “Regulations shall be promulgated to prevent the placement, upon any package *** of any illustration or pictorial matter which is likely to deceive retail purchasers in any material respect as to the contents of that package."

Applicable existing law

Section 403 (a) Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded if its labeling is false or misleading in any particular."1

Section 5 Federal Trade Commission Act: Prohibits "unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce (This provision is applicable to all commodities distributed in interstate commerce and may be used to prohibit deceptive package illustrations.)

The Model State Law on Weights and Measures, section 28 requires that "No commodity in package form shall be so wrapped, nor shall it be in a container so made, or formed or filled as to mislead the purchasers as to the quantity of the contents of the package * **99 4

THE BASIS FOR THE ADOPTION OF CERTAIN ADDITIONAL PACKAGING AND LABELING CONTROLS FOR INDIVIDUAL COMMODITIES

8. 985

Subsection 3(c): "Whenever the Secretary [of Health, Education, and Welfare] or the [Federal Trade] Commission * * * determines that additional regulations are necessary to establish or preserve fair competition between or among competing products by enabling consumers to make rational comparison with respect to price and other factors, or to prevent the deception of consumers as to such product, the Secretary or the Commission *** shall promulgate under this subsection with respect to that commodity regulations effective to " Applicable existing law

Both the FDA and the FTC are authorized by present law to adopt regulations to prevent deceptive practices. Section 701, Federal Food, Drug and Cosmetic Act. Section 6(g), Federal Trade Commission Act.

Comment

S. 985 would mark a distinct departure from existing Federal packaging and labeling controls, in that for the first time Government officials would be authorized to prohibit practices that are not deceptive or misleading, and to impose requirements that go beyond the prevention of deception. The Agency could adopt these additional regulations if it determined that they were necessary either to prevent deception, or to establish or preserve fair competition between or among competing products by enabling consumers to make rational comparison with respect to price and other factors. No showing of deception would be necessary.

The Agency could adopt a regulation specifying the size of packages, requiring ingredient information, or designating package-size descriptions solely on the basis that such a regulation would enable consumers to make rational comparisons of products.

SPECIFICATION OF WEIGHTS OR QUANTITIES IN WHICH A PRODUCT SHALL BE PACKED 8. 985

Subsection 3(c)(1): The FDA and the FTC are authorized to adopt regulations for specific commodities to "establish reasonable weights or quantities, or fractions or multiples thereof, in which that commodity shall be distributed for retail sale, except that no such regulation may be inconsistent with standards prescribed by the Secretary of Commerce before the effective date of this act with regard to the sizes of containers used for the retail sale of any commodity, and no weights and measures shall be established in amounts of less than 2 ounces."

Applicable existing law

None.

1 Similar provisions exist for cosmetics and drugs.

The model State weights and measures law has been adopted in most States. Any commodity in interstate distribution would almost certainly be subject to the requirement quoted above.

Comment

If a particular package is deceptively packed or labeled, the FDA and the FTC can prohibit the continued marketing of such a product; however, this provision of S. 985 has no relationship to deception. This is an attempt to authorize Government determinations as to what size packages would be best for the consumer and to require compliance by American industry. Such power usurps the inherent right of American industry to market its product in whatever way it chooses, so long as that way be legal, to gain the favor of the consumer.

8. 985

SPECIFICATION OF SIZES, SHAPES OR DIMENSIONS OF PACKAGES

Subsection 3 (c) (2): The FDA and the FTC are authorized to adopt regulations for specific commodities to "prevent the distribution of that commodity for retail sale in packages of sizes, shapes, or dimensional proportions which are likely to deceive retail purchaers in any material respect as to the net quantity of the contents thereof, except that where reasonable weights and measures have been established pursuant to the provisions of paragraph (1) of this subsection such regulations may not proscribe the use of package shapes which have been designed to exploit the unique advantages of any material for use in the production of packages of distinctive appearance."

Applicable existing law

Section 403 (d) Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded-if its container is so made, formed, or filled as to be misleading." Section 401 Food, Drug, and Cosmetic Act: "Whenever in the judgment of the Secretary such action will promote honesty and fair dealing in the interest of consumers, he shall promulgate regulations fixing and establishing for any food *** reasonable standards of fill of container."

Section 403 (h) Food, Drug and Cosmetic Act: "A food shall be deemed to be misbranded-if * * * it falls below the standard of fill of container applicable

thereto

Under section 5 of the Federal Trade Commission Act, which prohibits "unfair or deceptive acts or practice in commerce," the Commission has authority to take action against deceptive packaging. In a recent case, the Commission ordered a manufacturer to discontinue use of a package for gift wrapping paper that misled consumers as to the length of the sheets.

"No commodity in package form shall be so wrapped, nor shall it be in a container so made, formed, or filled as to mislead the purchaser as to the quantity of the contents of the package." (Sec. 28 of model State law on weights and measures.)*

ESTABLISHMENT OF STANDARD SIZE DESIGNATIONS TO DESCRIBE THE CONTENTS OF PACKAGES

8. 985

Subsection 3(c) (3): The FDA and the FTC are authorized to adopt regulations for specific commodities to "establish and define standards of designations of size ⭑ which may be used to characterize quantitatively the contents of

packages

Applicable existing law

Section 403 (a) Food, Drug, and Cosmetic Act: "A food shall be deemed to be misbranded if its labeling is false or misleading in any particular."1

Section 5 Federal Trade Commission Act: "Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are hereby declared unlawful."

Comment

Present law does not authorize the Federal agencies to define the label terms that may be used to describe the quantity of the package, but if the terms which are used are misleading or deceptive the use can be prohibited under present law. This provision of S. 985 would transfer the authority to designate descriptive terms to be used from the individual manufacturer to the governmental body.

1 Similar provisions exist for cosmetics and drugs.

• The model law has been adopted in most States. Any commodity in interstate distribution would almost certainly be subject to the requirement quoted above.

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