the level of competition which today works to her benefit. The only increase would be in the prices she would pay for the food she would buy.

This legislation talks of standardizing food packaging. I would like to cite for you several examples from our own company where standardized packages would have worked to the detriment of the

consumer.

We recently introduced a new product called Instant Please—a powdered coffee "creamer." It is packaged in a very attractive white plastic pitcher which is far more appealing on your breakfast table than an ordinary jar.

When we entered this market, it was dominated by three competitors. In fact, we would not have entered this market except that we were convinced we had an excellent product plus package superiority which we felt would enable us to compete successfully.

What has happened? We have spent a great deal of money. Competition has been increased substantially. The overall market for this type of product has been expanded. And the housewife likes our product and the package. We have received as many complimentary letters about the package itself as we have about the product.

If we had been required to compete against three major companies with a standardized package, we almost certainly would not have entered this market. Thus, here is an excellent example of how a nonstandardized package increased competition and assured consumers added choice.

In developing and marketing this new nonstandardized package it was not our intent to deceive the consumer by using a form of packaging which nobody else had thought of before. Rather, it was our purpose to attract her attention with a package which in itself conveyed a message as to what the product was inside.

We wanted to provide a package which not only contained an excellent product but which had some very real esthetic qualities and appeals for many housewives.

Still another of our objectives was to provide a package which would have many reuse values for consumers. For example, I have here a page from a recent issue of our company magazine showing some imaginative uses to which creative housewives have put our Please pitchers after the product inside has been used.

My point is this: There is a great deal more today to the successful marketing of a product than merely having a good product and uniform, standardized packages with accurate labels.

I submit that consumers want different packaging because it adds interest and variety to their shopping and because it has values to them over and above the mere containment of a product.

Everything in our business experience leads us to believe that consumers like and will buy an increasingly wide variety of products in an equally wide variety of package forms. This means more employment for more people and, not at all incidentally, more taxes paid in to the Federal Government.

Here is still another example of the kinds of benefits which can be provided to consumers by nonstandardized packaging:

Recently, after many years and over $1 million in research expenditures, we introduced the first presterilized, completely self-contained

ready-to-feed infant formula. This unit comes complete with its own nipple and is fed babies at room temperature. It takes a mother about 5 seconds to open it for use. When the mother has completed feeding her baby, the whole unit-nipple and all-is thrown away.

The entire process of bottle washing, sterilizing, heating, cooling, warming, testing, et al., are eliminated. Yet hospital studies show that this method of infant feeding is the safest of all methods.

In time and motion studies we have made in connection with this new infant nurser, we have discovered that a mother can save as much as an hour and a half to 2 hours of time per day by using this new convenience product rather than using old-fashioned methods of formula preparation.

Are we deceiving the American mother by making this product available to her in a nonstandardized container? We certainly don't believe so and neither does she nor her doctor.

Are we benefiting her by assuring her complete safety and great savings in time? We believe we are and she agrees.

Because the sale of infant formulas is naturally limited by the number of babies born each year, there is a relatively narrow market for these products. For this reason, we felt we had to be first in the marketplace with this unique innovation.

By maintaining strict secrecy in our research center, we were able to justify our very substantial investment in this product and were able to introduce it first.

This product would have been impossible to develop within the confines of a standardized packaging program.

Similarly, if we had been forced to divulge the nature of this product through premarketing clearance and licensing procedures-with all their attendant dangers of "leaks" and "tipoffs" to our competitionwe quite probably would have completely abandoned our efforts to proceed with this nurser because the financial risks would have been too great.

In passing, I might add a word about how we ourselves in many cases obsolete our own products. Our company founded the evaporated milk industry 80 years ago and this is still our biggest single product line. One of the major uses of evaporated milk has traditionally been in infant feeding.

This new infant nurser will literally cost us sales of our Pet Evaporated Milk. However, we believe this is in the natural evolution of newer, better, and improved products and packaging. We feel this is the way it must be if the consumer is going to be well served.

One of the greatest stimulants to progress in the food industry, to competition, and to the ever-increasing freedom of choice enjoyed by the food buyer in America is new product development.

More new foods, more improved foods, and more convenience foods have been brought to our Nation's marketplace in the past 20 years than at any other time in the world's history.

What happens to this kind of progress under legislation that is virtually a licensing law, requiring a premarket clearance procedure which could become a matter of public record?

The answer, to anyone in the food industry, is clear. Product development, as we know it today, would be drastically reduced.

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We are willing to risk a substantial investment in a new product only if we are reasonably confident that we can enter the market with a sufficiently superior product and superior packaging so that we can compete successfully and earn a satisfactory return on our invest

ment.

Tip our hands to our competitors about a new product or new packaging or both? Give him 6 or 12 months' notice of our plans and ideas? The risk would be far too great. The investment could not be justified. The idea would be pigeonholed in some filing cabinet at our research center.

S. 985 would eliminate "cents off" and coupon promotions. We do not engage in this type of marketing very often, but I defend most earnestly our right to do so, as a means of gaining better market penetration for a present product or stimulating the housewife to try a new product.

What is wrong with a technique, assuming its use in an ethical fashion, that saves the buyer money? If you tell us we cannot engage in price promotions today, why not, tomorrow, decide that all products must sell at standard, Government-established prices? The philosophy, it seems to me, is quite the same.

Deceptive packaging, misbranded food, false, or misleading labels are already against the law. Our laws are adequate. If their enforcement is not, then let us provide not more legislation but more funds and personnel to insure adequate enforcement.

In my view S. 985 runs counter to basic American policy. Our Governinent, historically, has been concerned with preserving and increasing competition. S. 985 would reduce competition.

It would seriously tamper with an economic system that has produced more value for this Nation-in products and services-than any other yet devised.

In a word, gentlemen, its "defeat" would best serve the objectives it professes to obtain.

(The previous mentioned page from the Pet Milk Co. magazine appears on p. 601.)

Senator Bass. Mr. Gamble, thank you very much for your state

ment.

At this time the members of the committee would probably like to interrogate the witness. Senator Lausche?

Senator LAUSCHE. How large an operation does the Pet Milk Co. have?

Mr. GAMBLE. Senator, our sales for this past fiscal year ended March 31 approximately $35 million.

Senator LAUSCHE. And you operate in what area of the country primarily?

Mr. GAMBLE. We operate throughout the country.

Senator LAUSCHE. You are of the belief that we now have on the statute books, both in the States and in the Federal Government, laws that are adequate in protecting the consumer from fraud practiced by yourself?

Mr. GAMBLE. I do.

Senator LAUSCHE. Is that correct?

Mr. GAMBLE. That is correct.

Senator LAUSCHE. Can you identify especially what laws you have in mind?

Mr. GAMBLE. We are talking specifically, as far as our operations under the present Food and Drug Cosmetic Act, the Federal Trade Commission Act-these are the two that come most prominently to mind.

Senator LAUSCHE. You are talking now from the Federal level, primarily of the Food, Drug, and Cosmetic Act?

Mr. GAMBLE. That is right.

Senator LAUSCHE. And the Federal Trade Commission Act?
Mr. GAMBLE. Yes, sir.

Senator LAUSCHE. Do you understand that in those acts there are direct provisions giving the Federal Government remedies by which, one, of criminal prosecution; two, of injunctive relief; and three, of cease and desist orders in the event fraud or misrepresentation is practiced?

Mr. GAMBLE. That is my understanding.

Senator LAUSCHE. Even though this may be repetitious I want to get it into the record.

Misbranded food, section 403 of the Federal Food, Drug, and Cosmetic Act, provides:

Food shall be deemed to be misbranded if its labeling is false or misleading in any particular.

That is a pretty broad provision.

Mr. GAMBLE. That certainly would

Senator LAUSCHE (continuing):

It shall be deemed to be misbranded if its labeling is false or misleading in any particular. (b) It shall be deemed to be false if it is offered for sale under the name of another food.

That is, if you offer food A and say it is food B when in fact it isn't, you are committing a Federal offense.

Mr. GAMBLE. That is correct.

Senator LAUSCHE (continuing):

(c) If it is an imitation of another food, unless its label bears in uniform type, size, and prominence the word “imitation" and immediately thereafter the name of food imitated.

So you have in this act a specific provision against selling imitated foods without so labeling on the package.

(d) It shall be deemed to be misbranded if its container is so made, formed, or filled as to be misleading.

I take it that that would mean if you make a large container which in fact is small in its content capacity, you would be misleading. Mr. GAMBLE. That is correct.

Senator LAUSCHE. If you had a container which seemed to have a certain quantity, but put in it less than the quantity that it ought to have, I think it would also be misleading. I want to repeat that:

It shall be deemed to be misbranded if the container is so made, formed, or filled as to be misleading. (e) It shall be deemed to be misbranded if in package form unless it bears a label containing (1), the name and place of business of the manufacturer, packer, or distributor, and (2), an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count, provided, under clause 2 of this paragraph, reasonable variation shall be permitted and exemptions as to small packages shall be established by regulations prescribed by the Secretary.

Those are the primary provisions of the Food, Drug, and Cosmetic Act. The Federal Trade Commission likewise has controls which are intended to protect the buyers of goods in our stores. I will not proceed with a reading of these provisions, but they deal with nonfoods primarily. Can you tell me what your knowledge is of the existence of statutes within the States duplicating the provisions of the Federal law which make it a crime and a wrong inequity to misbrand