sidered appropriate to emphasize that section 701 requires hearings only in the event that a person who would be adversely affected by a proposed regulation has filed a specific objection and has stated reasonable grounds therefor. The Hale amendment to section 701, enacted in 1956, is designed specifically to permit the adoption of regulations without hearings when the FDA and those affected have no significant difference of opinion concerning the nature and content of the regulations.

Only in the event that there is controversy, when the affected persons feel that there is no factual basis for the proposed regulation, is a hearing required. If section 701 were to be utilized in conjunction with the adoption of regulations such as those proposed in S. 387, these same Hale amendment procedures would come into play.

NORTH CAROLINA DEPARTMENT OF AGRICULTURE, DIVISION OF WEIGHTS AND

MEASURES

ADMINISTRATIVE INTERPRETATION OF A DECEPTIVE PACKAGE

The uniform weights and measures law, General Statute 81-14.3, reads: "It shall be unlawful to keep for the purpose of sale, offer or expose for sale, or sell, any commodity in package form when said package is so made, or formed, or filled, or wrapped, or exposed, or marked, or labeled as to mislead, or deceive the purchaser as to the quantity of its contents." Question has been raised as to when is a package deceptive as to fill regardless of size or shape, thus requiring an administrative definition which is as follows:

"A package is deceiving when the named contents therein occupies less than 90 percent of the enclosed volume of the package, exclusive of any wrapping or other material attached or included therewith: provided that the principal label shall indicate the net weight of contents by legend as plain and conspicuous as any other legend thereon, and as likely to be read as any other legend, and shall not be obscured by crowding, or by color, or by any other legend."

Another factor involved in deception is the plainness and conspicuousness of the marking of the net content on the principal label in terms of weight or measure or numerical count. The law declares what constitutes "plain and conspicuousness" which reads as follows: (General Statute 81-15) "the words plainly and conspicuously marked as used in this section shall be construed to mean that the principal label shall indicate the net weight contents by legend as plain and conspicuous as any other legend thereon and as likely to be read as any other legend, and shall not be obscured by crowding or by color or by other legend."

The other 10 percent of package volume unaccounted for in the above definition is intended as a maximum allowance for natural shrinkage or settling resulting from natural characteristics of the product in the package from the time the package is filled by the manufacturer or distributor until received by the consumer, and is not to be considered as a tolerance for the benefit of the packer.

Expressed in other words: If upon receipt of a package by the ultimate consumer or user, the fill, exclusive of any wrapping or binding or filler or other material, is less than 90 percent of the total filling space or if the net content declaration on the principal label is not plain and conspicuous as required by law, it shall be considered that the package was not legally filled and/or labeled by the originator of the package. The principal label herein referred to, shall be that part or panel of the label which presents or displays the commercial or brand name of the product under customary conditions of purchase.

It is obvious that a number of processors and packers are not conforming to these requirements of our law and are therefore liable to be prosecuted accordingly. It is hoped that all processors and packers, who distribute any commodity in package form in this State, will take cognizance of these laws and govern themselves accordingly.

JUNE 22, 1961.

C. D. BAUCOM, State Superintendent.

NORTH CAROLINA DEPARTMENT OF AGRICULTURE,
WEIGHTS AND MEASURES DIVISION,
Raleigh, N.C., July 26, 1961.

Subject: Net contents specifications.
To All Manufacturers, Processors, and Packers of Products Which Are Marketed
in Package Form:

Even though the North Carolina weights and measures law and its related rules and regulations and the North Carolina pure food and drug law and its related rules and regulations, also the Federal Pure Food and Drug Act and its related rules and regulations, do not specify location of content declaration on the label of a package, it, nevertheless, is obvious that the purpose is to enable a prospective purchaser to become informed regarding the quantity of the product that is in the package, the name of the product in the package, and the name of the packer. It is also obvious that the intent of the above-referred-to laws and regulations is to enable a prospective purchaser to discern quickly the quantity of product that is in the package.

Therefore, since June 1, 1961, this office has held conferences with, and received letters from, a great many manufacturers and packers of products marketed in package form, which had as its objective the determination of what is necessary to satisfy the law and rules and regulations as regards to the conspicuousness of the net content declaration. As a result of these conferences and letters, this office concludes that the following specifications will satisfy the purpose and intent of the law and rules and regulations of the North Carolina State Department of Agriculture, to wit:

"1. That the net content declaration appear on the principal label, main panel, or face, preferably at the top, in a contrasting color and not be obscured by crowding or by color, or by other legend. Said label, panel, or face being the one which is customarily displayed by the vendor within the view of a prospective purchaser.

"2. That the letters or figures that comprise the net content declaration be of a height not less than 3 percent of the height of the package or one-eighth inch, whichever is greater. Or as an alternate, a package less than 8 inches high shall be labeled with letters or numerals no less than one-eighth of an inch high, and for each additional 4 inches in package height or fraction thereof, the letters or numerals shall be increased in height by one-eighth of an inch up to and including packages 32 inches high. The height of letters or numerals on packages in excess of 32 inches shall be optional but not less than 1 inch."

In adopting these specifications for enforcement in this State, we recognize that there is a time element which must be reckoned with; namely, the intervening time from date of this letter until date of ability of manufacturer or packer to comply; therefore, we are sending this letter in duplicate asking that you acknowledge with endorsement on copy and return, and that you fill out and return, at your earliest convenience, the attached form. Your acceptance and compliance with these specifications will, in the opinion of this office, justify toleration of disposition of packages now in warehouses and at retail level. Very sincerely yours,

C. D. BAUCOM,

Superintendent, Weights and Measures Division.

AN ADDRESS BY PAUL S. WILLIS, PRESIDENT, GROCERY MANUFACTURERS OF AMERICA, INC., BEFORE THE EIGHTH ANNUAL MEETING OF TELEVISION BUREAU OF ADVERTISING, INC., NOVEMBER 16, 1962, WALDORF-ASTORIA, 12:30 P.M., STARLIGHT ROOF

IN 1962 GMA MEMBERS WILL INVEST $1.2 BILLION IN ADVERTISING

In your publicity covering your annual meeting, you say that industry is learning that it cannot increase sales just by increasing production and pushing more products through the distribution pipeline. It is the customer's pull that determines sales today, a pull transmitted through the chain of demand.

Our manufacturers as well as the distributors-wholesalers and retailershave been keenly aware of this for a long time. That is why they are annually investing so many millions of dollars in advertising and promotions. The theme of your meeting, "The Chain of Demand," is right down our alley.

GMA-WHAT DOES IT DO?

Before discussing your theme, I want to tell you a little bit about GMA- who we are and what we do. Our membership includes the leading manufacturers of this country that produce most of the food and grocery items sold in supermarkets throughout the United States. In addition to the regularly accepted items that make up the grocery basket, our manufacturers produce soft drinks, beer, cigarettes, beauty aids, general merchandise items--most of the branded products available in supermarkets. In recent years many manufacturers who heretofore sold their products primarily through other channels, and who are now marketing them through supermarkets, have joined GMA, and we have been very helpful to them.

GMA provides many services.-We have 20 working committees on which some SOO people serve actively. This includes committees on marketing, advertising. public relations, trade relations, employee relations, traffic, agricultural relations, broker relations, legislative, consumer services and so on. Our members look upon GMA as their organization to provide leadership with the trade, the public, the Government, communications, press, and so on.

INDUSTRY GROWTH

Our industry has had a fabulous growth, especially within the last two decades. It grew from a $16 billion annual business to an estimated $80 billion in 1962. This growth did not just happen because people have to eat, or because of population increases. Had we depended on these two factors only, our total annual food consumption bill would probably now be $40 billion instead of $80 billion. This extra growth resulted from many things *** good management at all levels, fine teamwork among all segments of the industry, heavy investment in research, new and improved products, modernization of plants, new equipment, automation, and very importantly, advertising and promotions. It was the combination of these many factors that helped to promote this extra growth. and the industry is moving right ahead-spending more dollars for advertising, etc.

CONSUMER BENEFITS

This industry has made great contributions to the American people and to our total economy. Today's homemaker has the distinct privilege of selecting her groceries from an assortment of some 8.000 items instead of a limited selection of 1,000 items as before. Two-thirds of today's items are either new or were materially improved within the past 10 years. She prepares her three daily meals of nutritious, tasty foods for a family of four, in 11⁄2 hours compared with an earlier time requirement of 51⁄2 hours.

Today's food products, in many instances, are far superior in nutrition, tastiness, safety, variety, and reliability of quality.

Today's new household items with their built-in maid service provide many timesaving devices which have materially lightened the homemaker's chores. Largely because of the availability of safe, tasty, nutritious foods, and the public's greater understanding and appreciation of the value of good eating, the American people, as a nation, are healthier now than ever before. Children are taller. Sports records are continuously broken and the lifespan is constantly increasing. The American consumer never had it so good. The press apparently like this way of stating the point and picked it up.

COST-OF-LIVING INDEX

While our Government's overall cost-of-living index shows an increase of 17 percent within the last 10 years, exclusive of food, we are highly pleased to say that the cost of our Government's standard “grocery basket” costs no more today at the supermarket than it did 10 years ago. This standard grocery basket set up by the Government contains some 80 selected basic grocery items carefully weighted as to consumer usage. It is the composite cost of this grocery basket that the Government uses as a monthly measurement of food prices at the grocery store. Whenever we make the statement that today's grocery basket costs no more than it did 10 years ago, it naturally raises eyebrows for some people spend more dollars now at the supermarket than before.

There usually is a practical explanation for this. The family may be larger today, and growing children require more food. People are also buying different

and better foods. Additionally, they buy many other items at the supermarket: Magazines, cigarettes, stockings, kitchen utensils, etc. *** all are paid for out of the grocery budget.

Recently, you have seen several magazine and newspaper articles on "Why Our Food Is a Bargain." That is a correct statement, as it relates to the overall cost-of-living items, and especially when measured in terms of hourly wages related to purchasing power. Ten years ago, in 1952, the American factory employee worked 51 hours to earn enough money with which to buy the Government's monthly market basket of farm foods. This year, in 1962, 10 years later, he earns enough money from 37 hours of work to buy the same standard "market basket." He has the income of 14 hours work for spending for other things *** a real contribution to our total economy. In this country, we spend about 20 cents of our dollar income, after taxes, for food. This leaves 80 cents available for buying other things. In Russia they need about 50 cents of their dollar to buy foods.

PROMOTION-MINDED INDUSTRY

Our manufacturers are highly promotion-minded. In 1962, they will be investing $1.2 billion in advertising. A 1961 listing of the top 100 advertisers in 7 media showed that 30 of the first 50 manufacturers belong to GMA, and 57 out of the top 100. In addition to media advertising, our GMA members spent many millions of dollars in promotional material and in the marketing of their products.

This year they will invest over $120 million in research for the creation of new products and the improvement of their old ones, and new uses for them. We are very promotion-minded.

INDUSTRYWIDE TEAMWORK

Our industry has a splendid record of teamwork cooperation of all the segments which make up the lifeline from farm to table. Our manufacturers enjoy a fine relationship with each other, and we work in fine harmony with the six national distributor associations and their members. This fine teamwork cooperation has contributed greatly to improving the facilities of distributing our products to the American people.

CONSTANTLY CHANGING INDUSTRY

Today's success of a company's business carries no survival guarantee for tomorrow. Many products which were considered old standbys yesterday have been replaced with improved models or with different products serving the purposes more efficiently and economically. Examples: Cake mixes have reduced the needs for baking powders and other ingredients. Detergents have taken the place of soap in many instances. Instant and frozen products have become regular household items. Any concern that does not invest heavily in research, in advertising, in new and improved products will find it increasingly difficult to keep pace with progress.

COST OF ADVERTISING

For this audience, it is not necessary to comment upon the rising cost of advertising, whether it is per page or per broadcast. You know the story, and GMA members know it. Our manufacturers are great users of advertising. Naturally, they are concerned about the rising costs, not only covering advertising, but all costs. While costs are increasing, competition is growing constantly more severe, and the rate of profit per dollar sales is heavily squeezed. What I want to say is that manufacturers must constantly realize a greater sales return from their advertising dollar. How can we bring this about?

Last year we met with 16 top management people of national magazines. We wanted to discuss with them the facts of life covering advertiser-media relationships. We pointed out that many years ago the advertising department of the manufacturer and the sales department operated independently of each other, even though both had the same purpose, namely, to increase sales. Management did something about it. Now manufacturers are coordinating the work of both departments, and they key into the director of marketing. Both departments supplement each other. Taking a page out of that book of experience, we suggested to the publishers that the day was here when their editorial department and business department might better

understand their interdependency relationships as they affect the operating results of their company; and as their operations may affect the advertisertheir bread and butter. While emphasizing that we would fight to the hilt to preserve their freedom to publish material of their own choice, at the same time, we invited them to consider publishing some favorable articles about the food industry instead of only singling out isolated cases of criticism. Certainly there are many fine things to say about this industry of interest to their readers and as the readers turn the pages and come across an interesting article, they will react more favorably to the advertisement, and be more inclined to purchase the product.

We can point with pride to some of the things which have happened since our visit.

Look magazine ran an article explaining the cost-of-living index published monthly by the Government.

Reader's Digest, an article on "Why Our Food Is A Bargain.”
American Weekly, an article on “Are Food Prices Too High?"
This Week magazine, “The Greatest Food Show On Earth."
Saturday Evening Post, an article exposing the food faddists.
Good Housekeeping magazine, on labeling.

Ladies' Home Journal, a series of articles on food.

Life magazine, several institutional ads, and is devoting its total November 23 Thanksgiving issue to food.

We could mention many other consumer and business magazines that carry frequent favorable articles about this industry, like Family Circle, Women's Day, Food Field Reporter, and so on.

These articles will surely help to create a better understanding of this industry and a favorable public attitude toward it. And our manufacturers-your advertisers feel more friendly to the management people.

ADVERTISER AND TELEVISION RELATIONS

I wish that I could say similar nice things about the relationship of our advertisers with television. Even though the networks receive about 65 percent of their advertising revenue from GMA members, there is lots to be desired as it applies to our relationship with their top management. We are not aware of any great amount of cooperation which television has extended to us in passing along interesting, favorable information to the public, information such as appeared in the magazine articles. The newspapers throughout the United States publish a great deal of information relating to food prices, food supplies, nutrition, and so on.

I have before me an article appearing in the Hammond (La.) Sun with boxcar headlines: "How about a great big hand for our food enterprises?" We have stacks of such clippings from hundreds of newspapers. In contrast with these favorable items, we have seen some television newscasts where they seemingly took great delight in bellowing out stories that were critical of this industry. And they told only the critical side. It seems to us that television stations, which have a great influence and responsibility for forming public opinion, would want to report both sides of the story-the whole story. We are not aware of any attempts by television stations to verify the accuracy of critical statements, or to obtain the other side of the story. The press communicates with us freely when statements of doubtful accuracy are received. Another comment: When our Government's monthly cost-of-living index shows an increase, commentators make a big deal out of it, even though the increase as it applies to food might be one-tenth of 1 percent-the equivalent of about 3 cents a week added to the cost of the family grocery bill. Usually such increases apply to seasonal items which are certainly not a necessity for the consumer when she can select from some 8,000 other items.

There is plenty of interesting material available about this industry for radio/TV use, and broadcasting such information should create a better public attitude, the advertising would be more effective, and the advertiser would get more for his advertising dollar. It is something to think over.

GMA ANNUAL MEETING

We just finished our 54th annual meeting-a 5-day meeting, including five luncheons and three dinners. It began with the GMA Food Forum on Friday. We had our regular meeting on Monday, Tuesday, and Wednesday; and on Thursday an all-day meeting devoted to "General Merchandise."