Imágenes de páginas
PDF
EPUB

state of the economy and of the consumers' relation to it in this present dav.

Mrs. Peterson, for whom I have very great respect, and who I think is very able, a very conscientious person, has made one point that 1 think we ought to examine, and that is her reference to the fact that some people do not speak English or do not read English very well. The only area which I see for deceit or deception, or possibly misleading a consumer, would appear to be in that range. As your advertisement well illustrated and your previous testimony, the American woman shopper is razor sharp in her judgment of products. She cannot be deceived in a purchase more than once.

This bill would propose to say that in addition to the power to protect her from such deceit or misrepresentation, there appear to be some other areas where she needs the benefit of Government regulation.

Honestly, I can't find those areas unless they exist in the area where people cannot read English, or cannot read it very well. Would you comment on that phase of Mrs. Peterson's remarks?

Mr. DUNNING. Mrs. Peterson commented on that, and anything we can do to help that person by way of consumer information and education will be useful. The only other way you can solve it is to print every kind of language there is on every label and somebody will think of that next if we pass this law. How else are you going to get at the problem. If a woman comes over here and can't speak English, or read English, it seems to me it is her responsibility to learn English, and to avail herself of any information that is available that will help her if she doesn't read English.

Senator SCOTT. The normal criterion of the marketplace, as I understand it, is the producer, ready and able to sell, and the consumer ready, able, and willing to buy. The judgment

Mr. DUNNING. Of course, I don't think these people-I don't know what a woman has that a man doesn't. But she has an innate sense about these things that always comes to the forefront. As I said when I was here before, if you want to go into any grocery store in America and ask what the largest sellers are and then make your own analysis of the products that are the largest sellers, you will find that the largest sellers are the best buys. And the women find this out.

Senator SCOTT. I would be inclined to think that even with a very small percentage of illiteracy in this country, or the very few people relatively who do not yet speak English, there would be the widest kind of interchange of information among those people as among all other Americans, as to whether one product has proved to be better in the neighbor's kitchen than another.

I question the wisdom of founding an entire new government regulatory agency, and the wisdom of changing hundreds of millions of dollars worth of machinery to gear an economy and a government program together on perhaps 3 percent or 5 percent of the people in the country. And yet it seems to me that this bill is really directed to some fear that something may happen to them other than his reputation, for which there are already ample protections in the law.

Mr. DUNNING. I agree with you. If you do pass the bill I hope you will have it expire in 1970, because the headline in the paper-I think it was yesterday-said that illiteracy will be stamped out in this coun

try by 1970. So we won't need this bill to help people who come from foreign countries.

Senator SCOTT. I realize that there is considerable haste in the country in order to cure problems which have not yet arisen. But I agree with you when you say that this is another example of a government project for which there is no demand and the government's instant reaction is to go out and create a demand, to send out, in effect, the agent provocateur, the spreaders of a feeling of malaise to say to people that you are not really happy in the Great Society, we must not believe what you have said about being happy because you are being badly treated by manufacturers. We are going to explain to you how you are being badly treated and we want you to become very angry about it, and then come down here and tell us about it, and send us telegrams, 3,000 for this quota, and 2,000 for that group, indicating that you are being hurt. And whever you feel that you haven't been hurt we will be glad to show you how you have been.

I can't see any more merit to that for this bill except in a single small area where it is geared to people who may have a disadvantage. I would think our recent education bill, which will cost billions of dollars, will go a long way toward closing that particular gap.

Mr. DUNNING. I agree with you a hundred percent.

Senator SCOTT. In your testimony in March 1963 there was a colloquy between you and Senator Hart, which I thought was interesting and I will ask you to comment on it. You stated, at page, 313, addressing a comment to Senator Hart:

Do you conceive under this bill, then, that if there were somebody in the Federal Trade Commission who felt it was desirable that the industry, meaning your industry, would be called together, that an agreement would be made, let us say, that we can sell facial tissues in 200 counts, 300 count, 400 count, 600 count; is that a conception of yours under this bill?

Senator HART. A lot of definitions would have to be built in if we ever go that far. And I know the answer is yes, if necessity is established.

So that Senator Hart's answer would seem to indicate that the government is going to help you count your tissues.

Mr. DUNNING. That is right.

That is exactly the impression that we have, sir.

Senator Scorr. In other words, that the government is going to go into every detail here.

You go on to say:

Mr. DUNNING. All right. Let us assume this is the case 2 years ago-these were the counts that were sold. Scott Paper Co. got the notion sometime ago that it would be a darned good thing if we could have a box of small facial tissues that would fit in the glove compartment of an automobile, that would fit in a student desk in school, would fit in the vanity drawer of a lady's dressing table, places where these big boxes wouldn't fit conveniently. So we decided we would try this out. Under your proposal we could not try it out because there would be a prohibition on it.

And you go on to say you did have a 75-count box to sell at a certain price, and you accomplished part of your purpose. But you couldn't get the box in the glove compartment.

Mr. DUNNING. The automobile manufacturers were kind of sneaky and made the glove compartment smaller so we had to make the box smaller. Under this proposal we could not do that in the future without coming to Washington and get clearance.

Senator SCOTT. In order to keep up with another phase of industry, not under the jurisdiction necessarily of the same bureau of the Government, you had to comply with the practice of another industry and reduce the count to 60 count.

Mr. DUNNING. So it would go in the glove compartment.

Senator SCOTT. Under this bill the Government could arbitarily have issued a regulation that wouldn't have permitted you to get your box in the glove compartment of the new cars.

Mr. DUNNING. That is right. Or if they did give us permission, they would have to make that permission known to every other manufacturer of facial tissue so we would lose the advantage of having an original idea and getting to the market first with something we thought was a new convenience to the consumer. You see facial tissues sitting on the back windows of automobiles all over America. That is strictly for the birds from our point of view because the guy driving the car can't get back there to get a facial tissue. If they don't use them, we don't make any money.

Senator SCOTT. You must have a lot of correspondence at Scott Paper Co. from your customers.

Mr. DUNNING. About 40 or 50 a day. We aren't in the league with the gentleman who just spoke to you. But we get a lot of them. And a lot of them are lovers, too, Senator Neuberger.

Senator Scort. What proportion, or number, if you kept any record, of the people are complaining about your packaging or labeling practices?

Mr. DUNNING. I am not familiar with our ever having a complaint on packaging and labeling in the context of this Hart bill. We do have complaints on packaging of products like Cutrite waxpaper where the people feel that the cutter edge on that box might protrude a little too far and might scratch their hand on it, or something of that

sort.

Senator SCOTT. That puts it right into HEW instead of Federal Trade Commission. Now you disappointed Mr. Dixon.

Mr. DUNNING. We did get dispensing complaints sometimes on packages. Or if in a pop-up tissue there is a discontinuance and the next tissue won't pop up, somebody will write about it. In terms of labeling on the package and in terms of the size or the unit of the package, and so forth, I am not familiar with any such complaints. I get a dozen letters personally and I answer every letter that is ever addressed to me personally from consumers every week, and I have been doing this for years. I can't recall any single instance of where we have had a complaint that we have deceived people. We had one little flurry a year or so ago when we added to our 1,000-sheet Scott tissue a 650-pack of Scott tissue, but we put the 650 on the package in big numbers. We packaged the 650 count in packages of 4, and the 1,000 sheets only in the single rolls, and did everything we could to develop the differentiation and were careful in our advertising to point out there were 2 sizes instead of 1. It is usual in this country to have several sizes of things that you can buy.

If you are buying a tube of toothpaste, some people like a little one and some a bigger one and on up. We had some questions about that. Those are the only questions I can ever recall.

48-222-65--19

Mrs. Peterson incidentally said those are the only questions she could ever recall on Scott Paper, too, because we had an afternoon with her and talked this all over.

Senator Scorr. Do you know of any complaints within your industry in recent years of misleading or deceptive practices which have been established to be misleading or deceptive?

Mr. DUNNING. Senator Scott, I think you can find in any walk of life in this country somebody who wants to cut the corners, who wants to beat the game. We have even in our past history had dishonest Congressmen, and we have dishonest businessmen, and we have dishonest consumers. We have dishonest everything, a very small percentage of the public. I won't presume to say to you I haven't seen competitors do things in our business that we have felt weren't as completely honest as they should be, but the amazing part about it is that it never lasts long because the consumer gives them their comeuppance by not buying their products.

Senator SCOTT. Were these practices of the kind which could be dealt with under the present statutes?

Mr. DUNNING. As I understand the law, yes, sir.

Mr. Dixon and Mr. Harrick both admitted that in the prior hearings. Mr. Cohen, who was there is the room, was in on those, as I was. They came out clearly in the testimony that they have the law today. It is just awkward and difficult and takes time and so forth. Senator SCOTT. That is all that I have.

Senator NEUBERGER. Do you use cents-off procedure in your business?

Mr. DUNNING. Senator Neuberger, we disapprove of cents off for a label as a merchandising activity on an established product which has not had any measurable, recognizable improvement, quality, or dispensing or some other kind of improvement.

We tried this thing extensively for a year and half. We were told by Nielsen, who is the greatest mentor of what happens in this business that there is, if you run cents off on the label you will get a temporary advantage over your competitors, but it is not a permanent advantage unless you have in your product something new which will make the consumer stick with this, that they like it better.

We feel cents off is an introductory merchandising technique, to get people to sample a new product where you need sampling so that they can know what you have to offer.

We will use it on the introduction of new products. But after a product has been established in the marketplace, which is about 2 years, we will not use the cents-off label technique. So we announced? publicly on July 1, 1961, and we have never done it since.

On the other hand, I will sit here and defend until the day is done the right and privilege of American manufacturers who do believe in cents off on the label to use that as a merchandising technique. It i a perfectly proper technique.

The only deception that can come, comes on the part of the retailer not the manufacturer, because if he puts 5 cents off the label, he l done his part. He has announced to his consuming public that ther is 5 cents off the label.

If the retailer chooses not to pass that on, unfortunately the manu turer can't do a darned thing about it because we simply are no

allowed under the law to try and control the price at which products are sold in retail stores.

We are very sensitive in business today to what we can do and cannot do. I didn't even dare say good morning to Mr. Halverstadt because he is a competitor. Somebody from the FTC might be in the the back of the room and figure we were colluding on prices. You can't tell, the way people look at us today. This is a very sensitive area that we are in.

We will not go into a grocer-we will go to one grocer and say we think you ought to have a better profit on this product, but we can't go across the street to a competitor and say the same thing, or we are in violation of the law.

Senator NEUBERGER. How can it be a cents off on the introduction of a new product?

Mr. DUNNING. That is a darned good question. It is a little hard to do. We don't do it in the initial introduction.

Senator NEUBERGER. It is pretty hard when there is no established price. How can you start off with a cents off?

Mr. DUNNING. That's right.

Senator NEUBERGER. This is what we would like to know.

Mr. DUNNING. That is a good question. Some people do that. I don't think it is smart, but

Senator NEUBERGER. It is not only not smart, it is deceptive.
Mr. DUNNING. What?

Senator NEUBERGER. It is not only not smart, it is deceptive.
Mr. DUNNING. If they have established a price-

Senator NEUBERGER. They can't have if it is an introductory thing. How can they? It is just impossible.

Mr. DUNNING. No, it is not impossible, Senator Neuberger. If you are going to put a new product on the market, you run your business on the basis of where, in order to stay in business, you have to have a certain spread between your manufacturing cost and your actual sales cost, and you establish that as to what you are going to sell this product for.

Senator NEUBERGER. But your consumer doesn't know what the established price is if you are introducing a new product.

Mr. DUNNING. She doesn't if it was never sold at its regular price before it goes in, under cents off.

Senator NEUBERGER. This proves the point.

Mr. DUNNING. But you can achieve the same result, and if you are going to outlaw one you should outlaw the other, probably, by saying our regular price on this product will be $10 a case to the grocer, but for an introductory period we will offer it at $9 a case. Then he can either sell it at what he considers to be a standard markup, using the $10 base, or he can say for introductory purposes I will use the $9 base before I make my markup.

Senator NEUBERGER. The bill doesn't prohibit that.

Mr. DUNNING. No, but it ought to prohibit that if it prohibits cents off. It is the same ball of wax.

Senator NEUBERGER. I have no further questions.

The next witness will be Mr. E. Scott Pattison, manager of the Soap & Detergent Association, 295 Madison Avenue, New York, N.Y.

« AnteriorContinuar »