special competence with respect to the subject of that regulation concerning the scope, application, form, and effect thereof, (2) publish in the Federal Register reasonable advance notice of intention to promulgate such regulation, and (3) accord to persons who would be affected thereby reasonable opportunity for consultation with respect to such proposed regulation. (b) All regulations adopted under this Act shall be promulgated in conformity with the provisions of the Administrative Procedure Act. No regulation shall be promulgated for any purpose described in section 3 (c) of this Act unless a public hearing has been conducted and opportunity for review has been accorded in conformity with the provisions of sections 7 and 8 of the Administrative Procedure Act. (c) Any regulation promulgated under this Act may be modified by the promulgating authority, upon the initiative of that authority or upon application made by any person affected by that regulation, whenever such authority determines that such modification is necessary to conform to the requirements of this Act or to any change occurring in the method of packaging, labeling, distributing, or marketing of any consumer commodity. (d) No regulation adopted under this Act shall take effect until a reasonable period of time (as determined by the Secretary or the Commission, as the case may be) has passed after the promulgation thereof to permit persons affected thereby to effectuate compliance with the provisions of such regulation. (e) In carrying into effect the provisions of this Act, the Secretary and the Commission are authorized to cooperate with any department or agency of the United States, with any State, Commonwealth, or possession of the United States, and with any department, agency, or political subdivision of any such State, Commonwealth, or possession. ENFORCEMENT OF REGULATIONS SEC. 5. (a) Upon written request made, by the officer or agency authorized or directed by this Act to establish packaging or labeling regulations as to any consumer commodity of any class or kind, to any producer or distributor of such consumer commodity, such producer or distributor shall transmit promptly to that officer or agency a true and correct sample of each package and label used by that producer or distributor for or in connection with the distribution in commerce of any particularly described consumer commodity of that class or kind. Any person who fails to transmit any such sample to such authority within twenty days after receipt of such request shall be subject to a civil penalty of not more than $1,000 for each day of the continuance of such failure, except that the amount of such penalty may be compromised by such authority before the final determination of action for the recovery thereof. Such forfeiture shall be recovered in a civil action brought in the name of the United States in the district court of the United States for any judicial district in which such person resides, does business, or is found. Upon demand made by the defendant before the trial of any such action upon its merits, the defendant shall be entitled to have any issue of fact with respect to such failure determined by a jury. (b) Any consumer commodity introduced or delivered for introduction into commerce in violation of any regulation promulgated by the Secretary of Health, Education, and Welfare under this Act while that regulation is in force and in effect shall be deemed to be misbranded within the meaning of chapter III of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 333) shall have no application to any violation of any such regulation. (c) Any violation of any regulation promulgated under this Act by the Federal Trade Commission while that regulation is in force and in effect shall constitute an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act. The remedies provided by sections 4, 4A, and 16 of the Act entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes", approved October 15, 1914 (38 Stat. 730, as amended; 15 U.S.C. 15, 15a, and 26), commonly known as the Clayton Act, shall not be available to any person threatened with loss or damage, or injured in his business or property, by any violation of any such regulation under this Act. REPORTS TO THE CONGRESS SEC. 6. Each officer or agency required or authorized by this section to promulgate regulations for the packaging or labeling of any consumer commodity shall transmit to the Congress in January of each year a report containing a full and complete description of the activities of that office or agency for the administration and enforcement of this Act during the preceding calendar year. COOPERATION WITH STATE AUTHORITIES SEC. 7. (a) A copy of each regulation promulgated under this Act shall be transmitted promptly to the Secretary of Commerce, who shall (1) transmit copies thereof to all appropriate State officers and agencies, and (2) furnish to such State officers and agencies information and assistance to promote to the greatest practicable extent uniformity in State and Federal standards for the packaging and labeling of consumer commodities. (b) Nothing contained in this section shall be construed to impair or otherwise interfere with any program carried into effect by the Secretary of Health, Education, and Welfare under other provisions of law in cooperation with State governments or agencies, instrumentalities, or political subdivisions thereof. SEC. 8. As used in this section DEFINITIONS (1) The term "commerce" has the meaning given thereto by section 4 of the Federal Trade Commission Act (15 U.S.C. 44). (2) The term "consumer commodity", except as otherwise specifically provided by this paragraph, means any food, drug, device, or cosmetic (as those terms are defined by the Federal Food, Drug, and Cosmetic Act), and any other article or commodity of any kind or class which is customarily produced or distributed for sale through retail sales agencies or instrumentalities for consumption by individuals, or use by individuals for purposes of personal care or in the performance of services ordinarily rendered within the household, and which usually is consumed or expended in the course of such consumption or use. Such term does not include (A) any meat, meat product, poultry, or poultry product, (B) any commodity subject to packaging or labeling requirements imposed by the Secretary of Agriculture pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act, the provisions of the eighth paragraph under the heading "Bureau of Animal Industry" of the Act of March 4, 1913 (37 Stat. 832-833; 21 U.S.C. 151-157), commonly known as the Virus-Serum-Toxin Act; (C) any beverage subject to or complying with packaging or labeling requirements imposed under the Federal Alcohol Administration Act (27 U.S.C. 201 et seq.); or (D) any commodity subject to the provisions of the Federal Seed Act (7 U.S.C. 1551-1610). (3) The term "package" means any container or wrapping in which any consumer commodity is enclosed for use in the delivery or display of that commodity to retail purchasers thereof, but does not include (A) shipping containers or wrappings used solely for the transportation of such commodity in bulk or in quantity to wholesale or retail distributors thereof, (B) shipping containers or outer wrappings used by retailers to ship or deliver such commodity to retail customers if such containers and wrappings bear no printed matter pertaining to any particular commodity, or (C) containers subject to the provisions of the Act of August 3, 1912 (37 Stat. 250, as amended; 15 U.S.C. 231-233), the Act of March 4, 1915 (38 Stat. 1186, as amended; 15 U.S.C. 234-236), the Act of August 31, 1916 (39 Stat. 673, as amended; 15 U.S.C. 251-256), or the Act of May 21, 1928 (45 Stat. 685, as amended; 15 U.S.C. 257–257i). (4) The term "label" means any written, printed, or graphic matter affixed to any consumer commodity. (5) The term "person" includes any firm, corporation, or association. SAVING PROVISION SEC. 9. Nothing contained in this Act shall be construed to repeal, invalidate, supersede, or otherwise adversely affect (a) the Federal Trade Commission Act or any statute defined therein as an antitrust Act; (b) the Federal Food, Drug, and Cosmetic Act; (c) the Hazardous Substance Act; or (d) any provision of State law which would be valid in the absence of such amendment unless there is a direct and positive conflict between such amendment in its application to interstate or foreign commerce and such provision of State law. EFFECTIVE DATE SEC. 10. This Act shall take effect on the first day of the sixth month beginning after the date of enactment of this Act. The CHAIRMAN. I want to state at the outset that we appreciate that we are in a very complex and economically sensitive field. The committee has the bill before it to listen to witnesses both pro and con, to receive suggestions, probably even to make substantial modifications, and to try to keep our eye on its goal and objective. I hope the witnesses will feel free to testify in a manner to give us the benefit of their experience and their views on this legislation. It is not a new field. As I pointed out, this committee has passed many acts the chairman himself has been the author of some-in this whole field of consumer protection. There is enough interest to justify what we are doing here. I hope we will come out with something that is to the best interests of the consumer, the producer and interstate commerce in the United States. The Chair would like to put in the record at this point comments received from the various Government agencies: DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Hon. WARREN G. MAGNUSON, April 27, 1965. DEAR MR. CHAIRMAN: This letter is in response to your request of February 23, 1965, for a report on S. 985, a bill to be known as the "Fair Packaging and Labeling Act" and popularly referred to as the "truth-in-packaging bill." The bill-the outgrowth of extensive investigations and studies conducted for several years by, and under the leadership of, its principal sponsor, Senator Hart-would authorize this Department with respect to foods (other than meat and poultry products), drugs, devices, and cosmetics, and the Federal Trade Commission with respect to most other nondurable consumer commodities, to promulgate regulations designed to insure that such consumer commodities will be so packaged and labeled as to inform the consumer, in plain, meaningful, nonmisleading, and conspicuously placed and printed language how much is in the package and what the commodity consists of (short of revealing trade secrets); to prevent such disclosure from being counteracted by misleading pictures on the label or by a misleadingly shaped, formed, or sized container; to enable the average consumer to make quick and simple unit-price calculations, and to make ready comparisons between different packages of the same or different brands; and to prevent any label statements (other than accurate markings by the retailer) that state or imply that the consumer is getting a reduced price, or a bargain by reason of package size, which in the nature of things only the retailer could assert with knowledge as to its accuracy. These purposes would be sought to be achieved through mandatory regulations on five matters specified in the bill-subject, as to some of these matters, to any exceptions that the nature, form, or quantity of particular commodities may require and that do not deprive consumers of reasonable opportunity to make rational comparison between competing products-and discretionary regulations on six other matters specified in the bill, which would be promulgated only if and as determined to be needed as to any consumer commodity to prevent consumer deception or to enable consumers to make rational comparison between competing products as to price or other factors. An article that violates such a regulation of this Department would, generally, be deemed to be misbranded within the meaning of the Federal Food, Drug, and Cosmetic Act, while the violation of a regulation of the Federal Trade Commission under the bill would be deemed to constitute an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act. The pressing need for action in this field has been amply demonstrated and was emphasized by President Johnson in his message to the 88th Congress on "The American Consumer"-in which he recommended "legislation to insure that the consumer has access to the information necessary to make a rational choice among competing packaged products"-and, again, in his Economic Report to the present Congress, in which he stated: "Informed consumer choice among increasingly varied and complex products requires frank, honest information concerning quantity, quality, and prices. Truth-in-packaging will help to protect consumers against product misrepresentation." (To the same effect, see the accompanying Annual Report of the Council of Economic Advisers, p. 138.) We believe that legislation along the lines of S. 985, with certain modifications designed to strengthen and perfect the bill, would be well suited to meeting that need. Of primary importance in the scheme of the bill insofar as our own responsibilities are concerned is the provision (sec. 5(b)) under which articles that are violative of regulations issued by us under the bill would be deemed to be misbranded within the meaning of the Food, Drug, and Cosmetic Act. The regulations that would be authorized by the bill would thus greatly strengthen the effectiveness and enforceability of certain requirements and prohibitions that are already contained in the Food, Drug, and Cosmetic Act in more general terms, and would further implement that act's philosophy of honesty and fair dealing in the interest of consumers by authorizing additional regulatory requirements or prohibitions so as to prevent confusing in the market place and assist consumers of such articles in making informed and intelligent choices. (As pointed out below, however, this provision (sec. 5(b) of the bill) is in need of improvement.) While, as a consumer protection agency, we have stressed the bill's principal objective, it should be noted that the bill at the same time, recognizing that selfregulation by industry has inherent limits, would protect the more responsible manufacturers and distributors who themselves desire to maintain high packaging and labeling standards, standards which too often they cannot maintain in the face of debased marketing practices on the part of less scrupulous competitors. As said by President Kennedy in his Consumer Protection Message (1962) after recounting some of these practices: "Misleading, fraudulent, or unhelpful practices such as these are clearly incompatible with the efficient and equitable functioning of our free competitive economy. Under our system, consumers have a right to expect that packages will carry reliable and readily useable information about their contents. And those manufacturers whose products are sold in such packages have a right to expect that their competitors will be required to adhere to the same standards." In order to meet the objectives of the bill more fully, we believe that certain amendments to it, summarized below, are desirable. 1. RELATIONSHIP OF S. 985 TO FOOD, DRUG, AND COSMETIC ACT (a) While providing that a commodity introduced or delivered for introduction in commerce in violation of a regulation issued by us under the bill shall be deemed misbranded within the meaning of the Food, Drug, and Cosmetic Act, section 5(b) of the bill adds that "the provisions of section 303 of that act❞— i.e., the provision making it a misdemeanor to violate that act—“shall have no application to any violation of any such regulation." We recommend deletion of this exemption. It would conflict with a principle that has been imbedded in our Federal food and drug laws for almost 60 years, where the public interest demands that those who make or deal in these products assume the highest degree of responsibility for assuring themselves that the product complies with the law and that there is no consumer deception. And the exemption would set a dangerous precedent for other legislation in this field. It could, moreover, create confusion in those subject-matter areas in which the Food, Drug, and Cosmetic Act already has provisions paralleling or overlapping those of the bill and in which the criminal sanctions of that act clearly apply. For example, where we now proceed criminally under the present provisions of that act (and regulations thereunder) for failure of a food package label to state accurately "the contents in terms of weight, measure, or numerical count," and to do so "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" (sec. 403 (3) (f)), we should be able 48-222-65 to strengthen the Government's hand in such a prosecution by also charging a violation of regulations under section 3 (a) of S. 985 requiring the net quantity of contents (in terms of weight, measure, or count) to be stated on the front panel and establishing minimum standards with respect to the prominence of that statement (including standards as to type size and type face). It should be emphasized that we now refer cases for criminal prosecution only in flagrant cases, that the Food, Drug, and Cosmetic Act (sec. 305) calls for giving a person against whom a criminal proceeding is contemplated and opportunity to present his views before the violation is reported by us to a U.S. attorney for that purpose, and that we are not required to report minor violations for prosecution or, for that matter, even civil proceedings where the public interest will be adequately served by a suitable notice or warning (sec. 306). (b) We also suggest clarification of section 5(b) of the bill so as to make clear that it is coextensive with the Food, Drug, and Cosmetic Act in including violations that occur after an article has been shipped in interstate commerce, e.g., by alteration of the label while the article is held for sale after such shipment. 2. "CENTS OFF," ETC., LABELS As indicated in the Budget Bureau's report on the bill the administration would prefer that the provision of section 3(a) (5)—relating to regulations to prohibit "cents off," "economy size," and similar labels when not affixed by the retailer-be shifted to section 3 (c) of the bill so that, instead of being required to issue such regulations for all consumer commodities, this Department or the FTC, as the case may be, would issue them only with respect to a particular product or products upon a determination that this is necessary to enable consumers to make rational comparison between such product or products and competing products with respect to price and other factors, or to prevent the deception of consumers as to the product or products involved. The reason for this recommendation, we understand, is that to outlaw this label practice completely would prohibit such labels even where they are completely accurate and honest. If this provision is transferred to section 3 (c), we would in order to administer it effectively need authority for access to the the necessary data. 3. EXCEPTION FROM REQUIREMENTS OF REGULATIONS Section 3 (c) (2) of the bill-which would authorize us to issue regulations to prevent distribution of packages in deceptive sizes, packages, or dimensional proportions-contains an exception to the effect that, where reasonable weights and measures have been established for a commodity pursuant to section 3(c) (1), regulations under section 3(c) (2) “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." We recommend that this exception be deleted, or that it be clarified by the addition of the phrase "except to the extent that such use would defeat the purposes of this subsection" (and by changing "except that" on page 6, line 4, to "but"). Otherwise the exception of such containers would prohibit the exercise of the authority of section 3(c) (2) where necessary to prevent deception of consumers or to enable them to make rational comparison between competing products. 4. INCLUSION OF “LABELING" OTHER THAN LABELS We suggest that in appropriate places, to be specified in the law, the regulations as to labels be made also applicable to written, printed, or graphic matter accompanying the commodity, which is included in the term "labeling" as defined in the Food, Drug, and Cosmetic Act. 5. PROCEDURE FOR PROMULGATION OF REGULATIONS Section 4(b) of the bill, which sets forth the procedure for promulgation of regulations under the bill, not only requires the regulatory agencies to consult with other Government agencies and with persons to be affected by a proposed regulation and to give reasonable advance notice of its intention to promulgate the regulation in the Federal Register, and not only requires that all regulations under the bill be promulgated in conformity with the Administrative Procedure Act, but it further requires that the discretionary regulatory authority |