STATEMENT OF E. SCOTT PATTISON, SECRETARY AND MANAGER, THE SOAP & DETERGENT ASSOCIATION; ACCOMPANIED BY JOHN P. MOSER, VICE PRESIDENT, LEVER BROS. CO., NEW YORK, N.Y.

Mr. PATTISON. Madam Chairman, I hate at this late hour to take very much time. But in view of all the publicity Procter & Gamble had this morning, as we have 30 other members in this field, I think they deserve about a half a minute per member. So I will guarantee to stick to this point.

Senator NEUBERGER. In addition to that, I think Procter & Gamble are members of the Grocery Manufacturers.

Mr. PATTISON. Yes; they are a member of GMA, I believe, and also a member of our association.

Senator NEUBERGER. So they have had that additional publicity. You go right ahead and take as much time as you want.

Mr. PATTISON. It just so happens that the vice president of the association, who is also in the room, Mr. John Moser of Lever Bros., is here. He is my boss, too. So I will have to carry water on both sides. Senator NEUBERGER. Would you like to have him come up and join you at the table? We have had Procter & Gamble. Let's have Lever Bros. Maybe we can find out what is in detergent soaps, when we get all of you together here.

Senator SCOTT. Who makes "All"?

Mr. MOSER. We do.

Mr. PATTISON. The Soap & Detergent Association, which I represent, has 120 members. About 30 of these firms make packaged cleaning products for personal or household use, and these member firms produce 90 percent or so of all such products.

In addition to those making the well-known national brands, others pack soaps and detergents to be marketed by chainstores under private label. The big names you hear on TV are balanced by small firms having one or two specialized products, or localized areas of sale. Both large and small are represented on our board of directors, on a onecompany, one-vote basis.

In the last Congress, our members opposed S. 387, and we are equally sure that S. 985 is a needless bill from the standpoint of consumer protection. We believe it will result in increased costs that will more than offset for the consumer any supposed gains from shopping comparisons, which may or may not be more rational.

We believe the bill is a potential threat to innovation, particularly damaging to the small company which must depend on the package as its primary means of promotion. We feel that the grants of authority to the Secretary of Health, Education, and Welfare, and to the Federal Trade Commission are ill-defined and would permit regulation of many legitimate competitive practices which are not in fact deceptive or unfair.

In the interest of saving time, I shall skip over those general objections to this bill that apply to all kinds of packaged merchandise. We support the position that existing State and Federal laws are fully adequate to cope with real, deliberate deception, and falsehood.

But there is good reason to discuss soap and detergent packages specifically in relation to S. 985 because people are very conscious of

our highly competitive sales methods. Admittedly, there is more visual vying-for-favor among detergent packages on the supermarket shelf than, say, among cans of beans.

This competition makes for a certain amount of consumer puzzlement, though far less-I would contend-than among the competing covers of paperback books.

The main point that I wish to develop is simply this: As a consumer protection measure as a supposed means of helping the shopper— this bill sacrifices the important for the unimportant. Its passage would be likely to interfere with positive services to the consumer that offer much greater opportunity for savings than helping her avoid a few misguided buying decisions.

The most important, positive, moneysaving support for the consumer, deserving top priority, is the encouragement of policies that will maintain the pace of product improvement. We know that the actual cleaning accomplishment per dollar of today's packaged products is greater than back in the days of the nickel bar of laundry

soap.

Many products and formulas of only 10 years ago are obsolete today the housewife wouldn't buy them, even at yesterday's prices. Furthermore, when a newly developed cleaning products is keyed to the needs of the new fabric or floor covering, indirect savings result in prolonging the life of the material, and coming on the market all the time. Indirect savings result in prolonging the life of the new material because of a cleaning product adapted to that particular material.

Suppose the first detergent producer to introduce a fluffy product, instead of a dense one, or a soap-impregnated steel wool, faced packaging regulations on weights and shapes and sizes such as might be set up under this bill? Would he have ben able to test-market these items promptly? Or, particularly, if he were a small manufacturer with limited resources, would he have looked at the regulations and let the opportunity pass promptly?

Let me digress for a second. A few days ago a man brought to my attention a need for a little domino detergent which he intended to weld inside two layers of plastic sponge. The reason he wanted to do this was to produce a little item that you could use to clean pans and the detergent would be right in the middle.

This would bring up the question of what do you show on the outside of the package? Do you show the weight of the detergent, do you show the weight of the sponge, do you show the weight of both?

If we had had this procedure that has been mentioned here, this advance clearance, before he could make a sales test of that product, he would have to go down to Washington and get advance clearance of what kind of a label he should put on that particular package. I am sure that somewhere along the line all his plans for a test market, which involved going into a city and making arrangements for local spot radio and all the rest of it, would have communicated this fact to his competitor long before he got his clearance, or by the time he got his clearance.

So this small manufacture starting out with his new product would be in a hopeless position if he had to get clearance on his label before he could even make a sales test in one city of this particular material.

Sales tests are very valuable for the consumer. If a company doesn't make a sales test, and they put out a product that the consumer doesn't like, there are 5 or 6 or 7 or more million dollars gone down the drain which that company has to try to make back on some other product. But if they can run a sales test in one community, they can save those mistakes and pass the savings on to the

consumer.

Please understand, I am not contending that this bill, in itself, would stagnate product improvement. But I think it can be proved the customer's best chance for greater value in our field comes from encouraging innovation, and the use of the package to persuade the customer to give it a trial.

What is next after you do your best to save the customer money by introducing a new product? I think the next No. 2 priority area for the economic protection of the customer is the more skillful, wastefree application of the right type of product at the point of use.

We are strong for having the housewife read and follow the instructions on the label. The savings that arise from proper use involve not only product cost, but timesaving and better results from laundry equipment.

If the average housewife followed instructions carefully, she could save far more in efficiency of cleaning than she can ever hope to save by slide rule calculations of cost per ounce of detergents in the store. More often than not, she just pours in a slug.

There are great opportunities entirely aside from instructions on the package, and we know there are great opportunities for protecting the consumer by instruction and training in efficient, waste-free cleaning techniques.

Mention was made by Senator Scott a moment ago of foreign people, people who can't read very well. I am happy to say that our industry has worked out a number of display sheets. These are simple instruction sheets on how to wash the bathroom floor, how to wash baby furniture, how to wash walls.

These sheets have now been taken over by various groups in the antipoverty program and the Federal Housing Authority is having these sheets printed by the Government Printing Office to do exactly what you were pointing out, Senator Scott.

These are edited for people who are school dropouts and can only read very simple words. The opportunity for saving and the efficient use of the product, any product, whether they buy brand A or brand B, is far greater than the opportunity for saving by buying a giant size box against a king size box.

Senator SCOTT. Madam Chairman, if I may comment right there, I would feel that that is probably almost exactly the same kind of risk that you would also be getting from a government which is being supplied by an institute, and I think it is a good idea.

When a government agency sees a need for its perpetuation, ex pansion, and indefinite existence, which is the normal rule of thumb they would have to show some reason for being, aside from just bringing lawsuits and wagging monetary fingers.

I would assume they would get out a great deal of this material. It seems to me that what you are doing is a far less expensive way of doing it from a consumer standpoint. I think the greatest liability

to the consumer involved in this bill is the extraordinary additional tax program which is going to be passed straight on to him either by the manufacturer, or through the Internal Revenue Service. Mr. PATTISON. Shall I go ahead?

Senator NEUBERGER. Yes.

Mr. PATTISON. Now, assuming consumers keep being offered new products, and being persuaded to try them, and to learn to use them in an efficient waste-free manner, what's the next best possible source of saving?

We think it is the good old American habit of shopping for sales and discounts. So here the housewife comes up against one of the things that this bill would prohibit or restrict-the use of cents off sales appeals on the labels.

In the days before self-service, as a housewife read items from the restricted shopping list of those days, the clerk behind the counter would point out the bargains of the day or of the season.

Today, a different mechanism is needed to flag the buyer's attention to a sales drive or temporary discount on a particular product or pack

age.

This is a form of competition that works. It is device by which the smaller manufacturer-possibly without television support-can make that first trial sale that may lead to a permanent preference. Professional "consumer protectionists," I know, have pointed to individual instances where the reduction from the regular list price apparently did not occur, or was overstated, or left the customer confused as to how much discount she was getting. All highly competitive selling sometimes engenders such confusion, including automobiles and life insurance where much bigger risks are at stake than the quarter or 50 cents that we are talking about here.

But to impose a new Federal restriction on what a leading economist described, in testifying on S. 387 last year, as "a form of genuine price competition"-that was Dr. Barnes, you may recall-would not seem to be called for.

Suppose one time out of a hundred-the savings are not fully passed on: From the consumers' standpoint, preventing the other 99 cents off reductions that do occur would seem to be like throwing out the baby with the bath water!

Incidentally, I might mention that in Germany, where a price-change notification law does effectively prevent cents-off labeling, customers don't seem to be gaining by the restriction. I am told that, over there, it is the well-entrenched seller with the old established line that benefits, and who has been in business for years and years, and the innovator coming into the market who has difficulty. He has to spend money on billboards, or something like that, which doesn't benefit the consumer as much as passing it on in the form of a cents-off offer.

Often, the housewife who shops and switches and possibly switches back again on the second round as a result of these competing labels, finds savings in improved results-as well as in cash-by this experimentation.

Fairness, in the face of this trial and error, is virtually self-enforcing. Unfairness is quickly self-revealed at the point of use. Of course, there will be variations in value.

But the few cents worth of difference between the "best buy" and the "worst buy"-on a cost per ounce basis-will be insignificant com

pared to finding the best product for individual conditions of a particular household-the type of washer, the hardness of the water, the personal preferences of the user as to the convenience of the containereven product odor.

My wife likes one type of detergent better than another because she doesn't like the smell of one. This is a perfectly legitimate differentiation.

Finding the right detergent is a little like finding the right restaurant-you are not helped much by being told in advance of the cost of the meal per ounce.

At this point, let me review the real channels by which support for consumer savings can be strengthened on soaps and detergents.

1. Encouragement of continued product improvement to provide more cleaning effect per dollar.

2. Cooperation on education and instruction in proper use, to achieve more effective results (fabric life, and so forth) and less waste of time and product.

3. More trial-and-error experimentation by the housewife to match new products to individual requirements, stimulated by cents-off special sales and other trial offers.

This brings us down to No. 4 on the list-the savings to be made by price comparisons between brands on the shelf, or between package sizes of the same brand, right in the supermarket.

We have gone through this before and I won't repeat the business about it is impossible to find any general index of cleaning power. Earlier in the week I was at Houston at a meeting of the oil chemists, who operate in the field of detergency.

They had a paper comparing three different kinds of soil cloth that are used. This is a cloth that they soak up with lampblack and oil to wash in a standard way. They found that, depending on whether you bought type A soil cloth or type B soil cloth or type C soil cloth, you got different results. The product that was best for one was less good for a less oily soil.

This comes right back to our initial point, that a housewife, one housewife may always wash dirty overalls, and she may find that she needs a different type detergent which costs more per ounce or less per ounce than another's housewife who is only washing white shirts because her husband has a different type of job.

Her choice of brand size, for example, may reflect her laundering practices, and these will vary, depending on such factors as family size, ages within the household population, water conditions, and the types of clothing and soils involved.

Surveys show that homemakers with the convenience of automatic laundry equipment tend to use it 2 or more days a week-some as often as 5 or 6 days a week, with the number of separate washloads ranging up to 10 or more weekly.

Convenience in package size, therefore, generally is a dominant factor in the homemaker's choice of package, outweighing minor savings which might be arrived at by cost-per-ounce calculations.

Let me quote at this point a communication-not from one of the big firms, with resources to make all kinds of packaging changes-but from a moderate sized midwestern company making a specialized line of hand cleaners; the G. H. Packwood Manufacturing Co. of St.