§ 15.415 Country of origin labeling on

crates containing unfinished imported raincoats and on garments after being finished in the United States.

(a) The Commission rendered an advisory opinion with respect to (1) its requirements for foreign origin disclosure in the labeling on containers of unfinished "Dacron" polyester and rayon raincoat bodies and raincoat carry-bags to be imported from the Orient and (2) the necessity for disclosing the foreign country of origin on labels of the finished garments and bags which are to be sold as a unit to consumers at the retail level.

(b) Under the proposed operation various sized raincoat bodies will be imported without collars, buttons or buttonholes. Material for the carrybags, cut to size, will also be imported without buttons or buttonholes. After importation, American made buttons and various styled American made collars will be sewn onto the coat body, and the buttonholes cut out and bound. American made buttons will be sewn onto the carry-bags and the buttonholes cut out and bound. The estimated costs in the operation are $2 as the f.o.b. value of the unfinished garment body and bag material and $1.23 as the cost of domestic labor and material.

(c) The submittal of facts disclosed that the Bureau of Customs would consider importer-finishers as the ultimate purchasers of the unfinished raincoats and bags within the meaning of the amended Tariff Act of 1930, and that an exception from the marking of the country of origin requirement on each individual raincoat body and carry-bag would be granted so long as the containers in which the unfinished material will be imported are legibly and conspicuously marked as to indicate the foreign country of origin of the contents and so long as Customs Officers at the Port of Entry are satisfied that such containers will reach the ultimate purchasers unopened.

(d) The Commission advised, based on its understanding of the factual submittal, particularly in light of the provisions of section 4(b) (4) of the Textile Fiber Products Identification Act and the labeling exception granted by the Bureau of Customs, that (1) no additional marking on the containers or

unfinished materials therein will be required beyond that requirement imposed by the Bureau of Customs; (2) that the raincoats to be sold to consumers at the retail level after having been finished in the United States must be labeled so as to clearly and conspicuously disclose the foreign country or origin of the imported fabrics; and (3) in the absence of any affirmative representation that the finished raincoat carry-bag is made entirely in the United States it will not be necessary to disclose the foreign country of origin of the imported fabric thereof. [35 F.R. 10109, June 19, 1970]

§ 15.416 Meaning of phrase “Leave your pocketbook at home".

(a) The Commission rendered an advisory opinion concerning the proposed use of the phrase "Leave your pocketbook at home" in light of the requirements of the Truth in Lending Act, section 144, and Regulation "Z", promulgated thereunder (12 CFR § 226.10 (d) (2)).

(b) The phrase in question would be used in television and mail circular advertising by sellers of clothing at retail on installment sales contracts. It was presented that customers may make the first payment at some future time and that "The customer may take the clothing with him at the time the purchase is made rather that wait until the first payment has been made. In ninety-nine out of a hundred cases, the purchaser does take the clothing with him at the time the purchase is made."

(c) The Commission advised it had concluded that the proposed phrase is equivalent to, or synonymous with, a "no down payment" claim. Under these circumstances it would be improper to use the proposed phrase without disclosing the specific credit terms required by section 226.10 (d) (2) of Regulation "Z". Specifically, the advertising must disclose the following credit information whenever no down payment claims are made:

(1) The cash price,

(2) The number, amount, and due dates or period of payments scheduled to repay the indebtedness if the credit is extended,

(3) The annual percentage rate, and (4) The deferred payment price of the article offered for sale.

[35 F.R. 10109, June 19, 1970]

§ 15.417 Use of term "manufacturer”. (a) The Commission rendered an advisory opinion as to whether producers of electronic display systems may be referred to as "manufacturers" of such eqiupment in informational materials furnished the press.

(b) It was submitted that such firms produce and sell electronic display systems and related equipment to those interested in obtaining current transactions on the stock exchange. In order to produce such equipment, various components such as electronic parts, motors, pumps, frames, and related materials are purchased from many sources and assembled into a completed unit at a manufacturing plant in the northeastern States. Some of these components are stock items, others are made to specification and in some instances machine work is necessary in order to properly assemble the basic components into completed units.

(c) On the basis of the information supplied, the Commission concluded that such producers, because they shape basic materials and components into finished products by hand-labor and by machinery, are the manufacturers of electronic display systems and related equipment. In the premises, the Commission advised that it would not object to references of such producers as the manufacturer of the systems in informational materials sent to the press.

[35 F.R. 10110, June 19, 1970]

§ 15.418 Four point tripartite promotional advertising plan.

(a) The Commission responded to a request for an advisory opinion regarding the legality of a proposed four point three-party promotional advertising program to be offered suppliers and retailers in the grocery field.

(b) Under the program as presented for consideration, the first point involves contracting with retailers for the use of one or more mass display areas in their stores by suppliers. (A mass display area is defined as that space set aside for the display of merchandise of the same manufacturer, usually at the end of an aisle.) Suppliers would be charged and retailers remitted (less 15 percent agency fee) one-half cent per display area for each person entering the store each week, the number to be determined by the number of sales slips run through each cash register. Supplier's customers would be notified of the program's availability

through bulletins included in suppliers' and wholesalers' mailing, through letters to direct buyers, and directly by mail to any other of the suppliers' customers. Suppliers would be limited to 10 percent of the available mass display areas in a given market during a calendar year.

(c) The second point involves the offer of a plan to suppliers for making funds available to retailers for the advertising of suppliers' product as a supplement to each mass display. Suppliers would be charged and retailers remitted (less 15 percent agency fee) one-fourth cent per person entering the store (as determined by cash register sales slips) per week for inclusion of the supplier's product as a feature in the body of the retailer's newspaper advertising. Retailers would also qualify for this allowance through distribution of handbills and/or mailers reasonably covering his trading area. Supplier's customers would be notified of the program's availability through bulletins included in supplier's and wholesaler's mailing, through letters to direct buyers, and directly by mail to any other of the supplier's customers.

(d) The third point involves arranging radio/television commercials for suppliers announcing that their products are available at named retail outlets. The commercials would supplement the mass display promotions. Time requirements for spot commercials would be pooled so as to obtain the best "frequency rate." Each customer of a participating supplier would receive at least one commercial without cost. The total number of commercials furnished a customer would be computed by dividing an amount computed by multiplying the retailer's customer count (as determined by cash register sales slips) by oneeighth cent per person and dividing by the post per commercial.

(e) Under the fourth point it was proposed to supply to retailers and suppliers a sales survey which would include consumer reaction to a product, reasons for consumer purchases of a product and, when possible, a reaction to the product after use, and with retailer cooperation, comparison of sales with competing products.

(f) The Commission advised it was of the view that were the program, other than the proposed sales survey under point four, implemented in the manner described no law administered by the Commission would be violated. The sales survey in point four of the plan, which

calls for the exchange of price or quantity sales information among retailers, or between retailers and suppliers, might be used in such manner as to lessen competition and since the legality of any such survey depends on the manner of its implementation, the Commission is unable to advise on this aspect of the plan.

[35 F.R. 10268, June 24, 1970]

§ 15.419 Tripartite promotion based on television game show.

(a) The Commission rendered an advisory opinion relative to the legality of a television game entitled "Your Name's a Winner" sponsored by a local retailer and national food suppliers.

(b) It was proposed that a television game show type program be produced and sponsored primarily by a local grocery retailer at a contract price determined by the number of "game pieces" (resembling Bingo cards) distributed by that retailer to customers for the play of the game. Home viewers cross off the letters of their own names on a game piece against those flashed on the television screen and receive all prizes appearing in the squares of the crossed-off row, including a hidden prize. The show producer would sell each square as advertising space to national manufacturers and suppliers, some of whom will be suppliers to the sponsoring retailer. The products involved in each advertising space would be prominently displayed during the course of the game show, and the suppliers of each would be featured at all times.

(c) The Commission expressed the view that insofar as a supplier to a retailer-sponsor is an advertising contributor to the game show problems under the amended Clayton Act would be present. The advertising rights of a national supplier purchasing a square constitutes a payment of something of value to or for the benefit of a customer within the meaning of that Act. On the other hand, if the advertising rights to all such squares are sold to non-suppliers of the sponsoring merchant so that a suppliercustomer relationship would not exist, the Act's prohibitions are not applicable.

(d) The Commission advised, because the proposed program contemplates that some of the advertisers would be suppliers to a sponsoring retailer, implementation and production of the television game show "Your Name's a Winner" in the manner outlined would raise seri

ous questions under sections 2(d) and 2(e) of the amended Clayton Act and section 5, of the Federal Trade Commission Act.

[35 F.R. 10269, June 24, 1970]

§ 15.420

Multiple foreign origin of parts disclosure on partially imported toys.

(a) The Commission rendered an advisory opinion concerning a proposed country of origin labeling on the containers of sets of toy racing cars and tracks. The labeling would include the following language:

Contents made in Great Britain and/or U.S.A. and/or Canada, as specified therein. Box printed in Great Britain.

(b) Seven different sets of toy racing cars would be sold through retail stores to the general public, with the most expensive set retailing at $22.50. At present, it is not known what percentage of the parts would originate in Great Britain, Canada or the United States. The plastic track would be made either in the United States or Canada, and the metal cars would originate in Great Britain. The paper container would also be made in Great Britain. The imported parts will be clearly and conspicuously marked as to their foreign country of origin. The cars and tracks will be packaged in a container which can, and normally would be opened for inspection by prospective purchasers prior to the purchase thereof.

(c) On the basis of the presentation, the Commission advised that it would interpose no objection to the proposed language being printed on the toy containers.

[35 F.R 10269, June 24, 1970]

§ 15.421 Origin disclosure on imported (9 percent to 15 percent) air filter parts.

(a) The Commission responded to a request for an advisory opinion regarding a foreign country of origin marking on aquarium valves and filters.

(b) According to the presentation the merchandise in question is a two- three-, or four-outlet gang valve connected by a plastic tubing to an air filter. The entire device is mounted on a plastic bracket designed to be hung over the top edge of an aquarium. All parts of the assembly are manufactured in the United States except for the bracket and filter which are produced in and imported from Hong Kong. These parts are identical and represent about 15 percent of the total cost

of the two-way gang valve, about 11 percent of the total cost of the three-way gang valve, and about 9 percent of the total cost of the four-way gang valve. The filter, including the filteration material with which it is filled, is designed for use for the life of the gang valve and in ordinary use it is not replaced.

(c) The Commission expressed the view that in the absence of any affirmative representation that the product is made in the United States or any misrepresentation that might mislead the purchasing public as to the country of origin of the bracket and filter, under the facts presented, the failure to mark the origin of the products would not be regarded as deceptive.

[35 F.R. 10269, June 24, 1970]

(a) The Commission responded to a request for an advisory opinion with respect to the legality of importers affixing preprinted labels bearing a retailer's discount selling price on packages of prepriced imported candles.

(b) It was proposed that importers of packaged and prepriced candles would affix onto each individual package a pressure-sensitive label printed with a retailcustomer's discount selling price. For example, the package as imported may bear a preprinted retail price of 41 cents and a retailer's discount selling price of 34 cents. Two questions were asked on the basis of this presentation:

(1) Is it permissible for importers of record to affix a discount operator's price label on the packages?

(2) If so, may this be done in the country of origin?

(c) The Commission expressed the view that the affixing by importers of a retailer's price on the package would not in and of itself be violative of the laws administered by this agency and that the place where this operation is performed would not be determinative of its legality. The Commission cautioned, however, that the contemplated arrangement is a preticketing scheme which must comply with the requirements of section 5, Federal Trade Commission Act. (See Commission's Guides Against Deceptive Pricing (16 CFR part 233).) Should the contemplated price saving claim as represented by the retailer's discount price label have the tendency and capacity to deceive and mislead the consuming public, then the importers as knowing par

(a) The Commission rendered an advisory opinion concerning the advertising of food and nonfood products on shopping carts in retail grocery stores.

(b) The program submitted for Commission consideration involved two plans. Plan A related only to the advertising of food items. Seller-advertisers would be charged a rate commensurate with the number and length of time shopping carts are used to display his advertising, and the estimated number of in-store shoppers exposed to such advertising. Participating retail grocers would be paid for the use of his shopping carts based on the number and length of time his equipment is used for supplier advertising and the estimated number of shoppers exposed to such advertising. Stores without shopping carts will be offered placards or self-markers without cost and will be paid on the basis of the number of customers exposed to the advertising. All competing retail grocers would be informed of this plan by personal solicitation, advertisements in trade journals and direct mailing to all in business at least 6 months prior to the start of the plan.

(c) Under Plan B nongrocery items not available for resale by participating retail grocers would be advertised only in those stores which have shopping carts. The rates and payments to advertisers and participating retailers would be the same as in Plan A.

(d) The Commission advised it would interpose no objection to the implementation of Plan A provided the following conditions were met:

(1) If the advertised grocery products are being handled by other than grocery stores, the other stores must also be notified of their right to participate in the plan, provided they compete with the

favored retail grocery stores. Moreover, all competing customers must be notified of the plan, regardless of whether they purchase direct from the supplier or through some intermediary.

(2) Payments to smaller participating stores with shopping carts should be made on the same terms as those to the smaller stores without shopping carts.

(3) Since the plan calls for performance of certain obligations which are normally performed by a supplier, Guide 13 of the Commission's Guides for Advertising Allowances should be

consulted.

(e) The Commission advised further that section 2(d) or 2(e) of the amended Clayton Act would not be applicable to that part of the program described as Plan B. This conclusion is based upon the statement that the nongrocery items, which are to be advertised only in retail grocery stores with shopping carts, would not be available for resale in such stores. However, the Commission cautioned, if the advertising on the shopping carts indicate the name of any particular dealer where the advertised products may be purchased, then the advertising should also indicate the names of all competing dealers.

[35 F.R. 10950, July 8, 1970]

§ 15.424 Tripartite promotional program using trash receptacle panels for advertising.

(a) The Commission responded to a request for an advisory opinion concerning a proposal to offer advertising panels on trash receptacles to advertisers of product and services.

(b) Under the program trash receptacles would be placed in public service areas where permission is obtained from the property owner, city government, or the person who controls the premises. Advertising thereon would be sold to producers on a yearly contract basis, the rates to be determined by the location and pedestrian traffic in the area. Product advertising will only advertise the product and will not indicate where it is available. however, service advertising will probably direct potential customers to the service.

(c) Physical servicing of the receptacles would be handled in many ways. Where they are placed on city streets, arrangements would be made with the city government to empty them and to report their condition. Where the receptacles are placed at motels, hotels, serv

ice stations, and like locations, arrangements would be made with persons who normally service such areas. Where the receptacles are placed in shopping centers or shopping malls, arrangements would be made with merchants within such areas to empty them and report on their condition. A fee would be paid to those rendering these services.

(b) The Commission expressed the view that payments to a merchant to service trash receptacles which may display advertising of products that he sells would be objectionable under section 2(d) of the amended Clayton Act. The proposed program would be unobjectionable under this Act where payments for servicing the receptacles are made to anyone other than merchants engaged in the sale of the advertiser's products. [35 F.R. 10950, July 8, 1970]

§ 15.425 Combining advertising for mailing purposes.

(a) The Commission rendered an advisory opinion concerning a proposal to combine manufacturer and retailer advertising into one mailing piece. The intended program involves the attaching of packets containing direct-to-consumer redeemable coupons and other advertising material prepared for various manufacturers and service organizations to the tabloid or booklet type mail advertising of national or regional retailing organizations. The purpose of the proposed program is to minimize mailing costs for the participating organizations. As each party to the arrangement would pay a proportionate share of the preparation, postage and other mailing costs, the mailing expenses for each would be reduced about one-half.

(b) The Commission expressed the view that to the extent a participating retailer will realize a saving in mailing costs because the advertising material of one or more of his suppliers is inserted in the packets prepared by the other participant who is under contract with such suppliers, a discriminatory promotional allowance will have been accorded by such supplier to that retailer. However, the same result will not pertain where the packet contents are limited to those products and services not available from the participating retailer.

(c) The Commission advised that so long as precautionary measures are taken as will insure that the packet contents are limited to the advertising of those products and services which are not