Is this problem not one of enforcement of existing legislation and regulation very similar to the manufacture and distribution of clothing following the discovery and utilization of synthetic fibers. It was sufficient to label the wool, cotton, or synthetic content of the clothing rather than standardize the designs of men's suits or women's dresses.

An equally abhorrent result would follow from regulation of "packages of sizes, shapes, or dimension proportions which may deceive retail purchasers as to the net quantity of the contents thereof. * * *" Lost would be the creative genius now being displayed in glass packaging without intent to deceive but with full intent to beautify and to utilize a versatile material to its best advantage. Many homes in this country are lit by table lamps whose bases have been adapted from a beautifully designed glass container. Shelves of objets d'art contain empty vials and decanters having the appearance of fine cutglass.

More important, the varied composition of foods now being concentrated in powders, liquids, shreds, and cubes dictate the shapes and sizes of their glass containers in order to achieve free flow, prevent wastage, and provide easy access to the commodity. Safe and utilitarian packaging of these nutritional developments are the concern of glass container designer and their economy in filling of concern to the packer and the consumer.

Surely a stultification of industrial ingenuity and marketing diversification is not a purpose of S. 387. Yet the above-mentioned sections of the legislation would hamper if not eliminate the efforts now in progress toward full utilization of the desirable characteristics of glass as a packaging material. Standardization would reduce employment among members of our union employed as glass mold makers and their craft, often passed from generation to generation, could be lost.

It is also my belief that the American glass industry would suffer greater unemployment as a result of encouragement of enterprise and technological advances abroad in the art of glassmaking and increase even further the imports which have been harmful to employment in the American glass industry. The handmade art and tableware industry has lost 50 percent of its employment opportunities since the end of World War II.

To summarize, the fundamental error in these sections of S. 387 cited above is that they would establish unnecessary controls and regulations without implementing the necessary consumer protection contained in other sections of the bill. Establishment of "reasonable weights or quantities" and restriction of "sizes, shapes, or dimensional proportions" of containers would neither reduce nor eliminate the policing problem caused by dishonest packaging. The fault lies, not in the packaging, but rather in the claims made on the label regarding the contents.

There presently exists sufficient regulatory authority to enforce observance of honesty in claims for contents of commodities packaged in glass. The technological nature of the moldmaking, molten glass pouring, and automatic finishing render it economically useless to attempt to gain an illicit profit from glass containers designed to deceive the consumer. The expense of such designs, their manufacture, packaging, and special closures would prohibit and additional profit in lessening the contents below the amounts claimed on the labels.

For these reasons I respectfully submit that section 3 (e) (1) and (2) are superfluous to the objective of the bill in relation to glass containers and that the conditions imposed by these sections would hamper the remarkable advances of the glass container industry and result in increased unemployment in the American portion of that worldwide industry.

APPENDIX TO STATEMENT MADE BY GEORGE M. PARKER, PRESIDENT OF THE AMERICAN FLINT GLASS WORKERS' UNION, AFL-CIO, 2 YEARS AGO AT THE HEARING ON S. 387

(Before the Subcommittee on Antitrust and Monopoly of the Committee on the Judiciary, U.S. Senate, 88th Cong., 1st sess., as it appears in pt. 2 of the printed record, pp. 759 through 761)

The position of the American Flint Glass Workers' Union on bill S. 985 is essentially the same as it was on bill S. 387 which was before the Subcommittee on Antitrust and Monopoly of the Committee on the Judiciary, U.S. Senate, 88th Congress, 1st session.

We respectfully note and appreciate the effort which was made by your comttee to recognize the objections raised by Mr. Parker in his statement 2 ars ago. However, we are of the opinion that the provisions in section c) (1) and (2) of the present bill do not correct the conditions to which we jected in the original bill. While we are in wholehearted agreement with the tent of the basic provisions of bill S. 985 and concur with the position that nsumer products should be labeled plainly with full information regarding e contents of the package, we do not believe that section 3(c) (1) and (2) conibutes anything to proper labeling.

The American Flint Glass Workers' Union, AFL-CIO, represents the men ho make molds which are used in the manufacture of glass containers. These re highly skilled workmen and anything that adversely affects the glass coniner industry immediately effects the employment opportunities of our memers. Government, business, and organized labor are very much concerned bout the unemployment situation in the United States and we believe that very reasonable effort should be made to preserve the job opportunities rather han destroy them.

Section 3(c) (1) and (2) of the bill, we repeat, does not contribute to the olution of the problem of proper labeling. It merely places restrictions in the lesigning of containers which are very detrimental to the glass industry, crippling he initiative to develop new glass containers, thereby seriously reducing job ›pportunities in the glass industry.

We most respectfully suggest that section 3(c) (1) and (2) can be deleted 'rom bill S. 985 without impairing its functions and sincerely urge that this section referred to be deleted. If this is done we can honestly and without reservation recommend passage of bill S. 985.

Thanking you for any consideration given our position, I am,
Respectfully yours,

ALBERT VOTTERO,
First Vice President.

STATEMENT FOR THOMAS J. LIPTON, INC., BY FRANK S. KETCHAM, ATTORNEY,

WASHINGTON, D.C.

My name is Frank S. Ketcham and I am Washington counsel to Thomas J. Lipton, Inc., upon whose behalf I am appearing at this hearing. Thomas J. Lipton, Inc., is not only the largest processor of tea in this country but also manufactures and distributes either directly or through subsidiary companies, numerous other food products such as soups, salad dressings, macaroni and noodles, ice creams, soft drinks, and dehydrated food dishes, all of which will be affected by S. 985.

In order to limit the length of this statement, we shall briefly describe our approach in examining the bill, look at three sections of the bill, state the results of our thinking on these three sections, including a few positive suggestions with respect to some of the problems, the solutions to which the three sections of the bill are addressed, as well as make a statement of conclusions. We could discuss other sections of the bill, but we believe that our analysis of the three sections, sections 3(a) (5), 3(c) (1), and 3(c) (2), will indicate the scope of our concern and what we feel might be a useful approach to more satisfactory solutions to the problems to which the bill as a whole is addressed.

In looking at the bill, we asked five basic questions:

(1) What, precisely, in each section is the practice about which concern is expressed, is the practice inherently an abuse or a deception, and in any event how extensive is it?

(2) Does the proposed legislative prohibition effectively bring about the barring of such practice or provide for such barring?

(3) Does the proposed legislative prohibition bring with it harmful side effects, either as to the persons sought to be protected or the persons regulated, or might it do so?

(4) What is the relative social utility of preventing the practices in question as compared to the side effects of the statutory preventionary scheme?

(5) Are more satisfactory alternatives available to reach the legislative goal? Section 3(a) (5) of the bill is popularly known as the "cents off" prohibition. The section appears to be based on the desire to prevent those situations where in "cents off" campaigns, the "a cents off" is not passed on to the consumer in spite

of a contrary implied representation, or in spite of what is at least a perfectly reasonable inference on the part of the consumer on viewing the label of the container in question.

It also appears to be based on a desire to prevent those situations where the per unit (price, sheet, whatever) retail price of larger net contents containers are the same or higher than that afforded by smaller net contents containers of the same product (lack of "cents-size discount") in spite of a contrary implied label representation or in spite of what is at least a perfectly reasonable inference on the part of the consumer viewing the label of the container in question. You have heard ample and excellent testimony on the economic value and significance, to both manufacturer and consumer, of "cents off" campaigns. Aside from agreeing with the testimony, in looking at the section, we asked several questions, to wit: Is it not correct to assume that since the manufacturer embarks on a "cents off" campaign to get the consumer to try a new or modified product or retry an old product; i.e., price savings to increase demand; its commitment at the retail level would be to see that the price savings are passed on to the consumer? Can the same reasoning obtain, or should it, with slight modifications, as to cents-size campaigns and/or containers? If these assumptions are correct, we then asked how widespread was the abuse where these: savings are not passed on and, in the same vein, should the focus of concera more properly be on someone other than the manufacturer, in trying to prevent the deception to which the section is directed.

Apart from the question of proper focus, it seems to us that the section does not prevent a manufacturer from affixing the following legend on a label: “The wholesale or manufacturer's list price has been reduced a cents" or a label stating the following: "The wholesale or manufacturer's list price per ounce is z cents an ounce lower than the wholesale or manufacturer's list price per ounce in the next smallest sized container." While this apparent omission in the section would permit the continuation of "cents off" campaigns, and cents-size campaigns and/or containers the retailer still would not be bound to pass on to the consumer the particular price reduction implied by the label and earnestly desired by the manufacturer. Further, of course, confusion might arise in the mind of the consumer as to whether or not the regular price of the product and size should be reduced by the "cents off" and cents-size referred to in the label plus cents representing the retailer's proportionate profit on the "cents off" and cents-size reduction. Thus it would seem to us that if the section is enacted in the present form, "cents off" and cents-size merchandising would still be practiced but the same abuses, to the extent that they presently exist, would continue, albeit in somewhat different form, as well as causing the introduction of a new element of possible consumer confusion.

We wonder if a simple solution which goes to the heart of what appears to us to be the problem, again to the extent to which it exists, might simply be a law which says that the purchase by a retailer of products labeled “e cents off" or where there is a cents-size price reduction stated or implied on the label and the display of such products for sale, carries with it the affirmative implied representation that the retailer is offering the product at a cents off his regular offering price or that the larger net contents container is being sold at a lower per unit price than the regular per unit offering price of the smaller net contents container of the same product, and, further, that any acts inconsistent with such a representation shall be unlawful. This, it would appear to me, would free the manufacturer to embark upon "cents off" and cents-size merchandising as effective sales tools, the consumer would have the advantage of the price savings afforded by such sales tools, and yet the retailer would be free to elect whether or not to sell such products at such reduced prices by purchasing or not purchasing products so labeled or packaged.

Section 3 (c) (1) of the bill (and in part, sec. 3(c)(2)) seems grounded in part on a belief that a consumer seeing two containers of equal size, assumes that their net contents are equal, and that if they are not, is deceived. The other premise seems to be that the consumer has difficulty making a per unit price computation as between, for example, 3- and 41⁄2-ounce net contents containers. As to deception with respect to the net contents of containers of equal size, this can only rest on an assumption that the consumer doesn't look at the label which sets forth the net contents. The problem of the per-unit price of different net contents containers is more difficult, but we will discuss what appears to us to be a simple solution to that later in this statement. Clearly, if there is such a deception or difficulty as set forth above, and if the regulations permitted by

the section are enacted, the deception or difficulties might not arise, but other difficulties might arise in the area of cost-price and other values.

The problem of net contents of two containers of equal size is a knotty one. In consideration of the problem, we looked to what we called horizontal and vertical contents standardization. A horizontal contents standardization problem may arise where the manufacturer produces a multiple comparable use product line, for example, baby foods or spices.

If one should ask whether if a manufacturer produces 50 different spices or baby foods, why does it not package a given size (e.g., smallest) in varying sized containers each containing a ounces. It would appear reasonable to assume that for reasons of cost in packaging and shipping, the manufacturer has to pick a given sized container, pack that container with as much of the particular spice or baby food as it will contain, and note the differing weights on the labels of the containers. We should imagine that if there were 50 different spices produced, 50 different-sized containers would be required to market a ounces each of a given spice because of the variations in the density of spices. A similar result would probably obtain as to baby foods. It would also appear reasonable to assume that it is easier for the retailer to display and stack such products of a particular standard size container; and most consumers seem to like a uniform container size for a product line. I know, for example, that my wife enjoys having the same-sized spice containers on her spice shelf. While the assumption on packaging and shipping costs, as well as consumer preferences, appear reasonable, the next question to ask is, are they? While some information has been set forth in testimony before this committee on the cost of contents standization and the consumer's interest therein, and I have some personal knowledge on the subject, I don't know the answer as to the larger parts of the spectrum of major products subject to the bill.

If one says that horizontal contents standardization appears to cause problems, what can one say about vertical contents standardization; that is, if the smaller size container of pepper is marketed at net contents of 2 ounces, would there be any problem in a regulation requiring that the next larger net contents amount at which pepper is marketed be an even multiple of such 2 ounces? Here, too, it appears that the manufacturer may well be trapped by horizontal contents standardization problems. For example, the container for an even multiple of 2 ounces of pepper may well not be suitable for a container for an even multiple of ounces of bay leaves. This nonsuitability may be for all the reasons suggested above. Again it seems more definite information on the cost and other problems is called for.

As to the problem of the consumer having difficulty computing the per unit price as between, for example, 3- and 4-ounce net contents containers, wouldn't a simple remedy be to require the retailer to post in a prominent position sheets setting forth in the vertical column, for example, ounces and fractions of ounces and in the horizontal column 1 cent through 99 cents so that the consumer could readily determine the per ounce cost of a 34-ounce net contents container by looking at the intersection of the 34-ounce line with the 99 cent line. This is similar to what we all do in looking at a road map and determining how far one city is from another. The information suggested above might well be in pamphlet form, which a statute might require to be affixed to all shopping carts in a retail establishment.

The permissive regulation contemplated by section 3 (c) (2) seems to be grounded in part on a concern that the consumer is misled as to the net contents of the container by the existence of so-called slack fill, even though again the net contents of the container are printed on the label. There are other apparent concerns reflected in section 3(c) (2) but these have all been amply discussed in the hearings.

You have heard testimony on the need for slack fill in packages containing such commodities as paper towels, biscuits, and other products. Let us add one other to the list. The manufacture of prepared soup mixes basically involves the production of dehydrated soups. The soup, in order to avoid spoilage through hydration after the process of manufacture, must be packed in airtight aluminum foil. The soups in foil are then generally placed in cardboard boxeswith airspaces; i.e., slack fill. Why? If the foil package is shipped, there would be breakage of the contents of the package in the shipment, whereas the box itself is easier to pack in shipping cartons, affords protection against breakage of the soup ingredients, and is more convenient to stack on retailer's shelves.

The examples you have heard of slack fill, including the above, may be the only situations where slack fill is inevitable. Here, too, much more information is needed. However, if there is felt to be a pressing need immediately to protect the consumer against being misled by slack fill, why not a simple label requirement, that where slack fill in fact exists in the container or wherever slack fill may possibly exist, there be stated on the label: "This package has slack fill because ***"

The complete answers to some of the basic questions which we asked are not presently available to anyone. To this end we suggest the following: (1) A survey be undertaken wherein all manufacturers or processors producing more than 100,000 units of a particular product annually would state whether the containers of such products have slack fill, how much, and why.

(2) The same survey should determine from the same manufacturers or processors as to the same products, how many containers are used for the products in question and what additional packaging, shipping, and other costs there would be, in any, to tailor the containers to standardized net contents, both on a horizontal and on a vertical basis.

(3) All manufacturers or processors producing or processing more than 100,000 units of a particular product annually and who in the previous fiscal year other than the current fiscal year embarked on cents-off or cents-size campaigns or container usage which involved savings to consumers of more than $100,000 per annum should conduct surveys amongst retailers to see what the going retail price was of the products in question prior to a particular cents-off campaign or the introduction of a cents-size container or campaign and whether or not the cents-off reduction was honored if containers so labeled were sold and whether or not the cents-size discount was given.

In conclusion, we would say, of course, we believe that deception in merchandising is an evil and should not be a practice. However, we feel that the relative social utility of preventing varying degrees of misunderstanding by, and in some cases deception practiced upon one or more consumers, must be weighed against the economic costs of revising existing practices and techniques on certain levels in order to prevent such deception and misunderstanding. Further, however, we must confess that at least as to the three areas we touched upon, we feel strongly that too little is known on the precise magnitude of the deception or misunderstanding and the precise costs of preventing such misunderstanding or deception. As such, we feel it imperative that before legislation is passed to regulate any part of the problems to which S. 985 is addressed, we have before us precise information on the dimensions of the problem. This is so that you can draft legislation tailored to a clearly defined problem and so that groups affected by the legislation, whether manufacturers, retailers, or consumers, can more effec tively comment on the proposed legislation.

Mr. EDWARD JARRETT,

MAGAZINE PUBLISHERS ASSOCIATION, INC.,
New York, N.Y., May 10, 1965.

Chief Clerk, Committee on Commerce,

U.S. Senate, Washington, D.C.

DEAR MR. JARRETT: Enclosed are 10 copies of the statement of the Magazine Publishers Association, Inc., on S. 985 the Fair Packaging and Labeling Act of 1965. I would appreciate your incorporating these statements into the record of the hearings. Sincerely,

CHARLES D. ABLARD.

STATEMENT OF THE MAGAZINE PUBLISHERS ASSOCIATION, INC., BY JOHN K. HERBERT,

PRESIDENT

The Magazine Publishers Association is an association of 113 member publishing companies which publish over 300 magazines of national circulation. The magazines published by MPA member publishers comprise in excess of 70 percent of the total magazine circulation of the United States.

We have several interests in the proposed legislation which this committee is considering. The magazine industry is an integral part of the communications network of the United States and has provided a key link in the unification of our country by providing information of a public character to our people.