and illustrative matter which may mislead the consumer as to the contents of the package. No specific act is declared illegal by the statute and no test of illegality is given to guide the administrative agencies which are required to promulgate regulations making such acts illegal.

In addition, whenever the administrative agency determines that, with respect to a given product, additional regulations are required, in its opinion, to assure fair competition and rational consumer comparison between competitive products, it may promulgate regulations which establish sizes, shapes, and weights of packages, define size and serving terminology and establish standards of quantitative content where net weight or number is not meaningful.

Aside from requiring advance notice and the conferring of an opportunity for consultation with the interested public, and of consultation with other governmental agencies having special competence over the subject matter, no statutory guidelines are provided by the bill to control the exercise of completely unfettered administrative power.

Under present commercial practice, considerable expense and experienced judgment enters into the design of packaging and labeling. Package sizes are developed to reach those customers whose needs are not adequately met by dominant sizes. Aside from utility, competition is directed toward producing an item which is esthetically appealing. Consumer acceptance of this practice is now well established.

The effect of the proposed legislation upon this competitive factor appears to be considerable. To a great extent, competition in packaging and labeling would be replaced by governmental regulations imposing standardization. The exercise of independent discretion by businessmen as to most effective means of marketing their product in packaged form would be replaced by a series of rigid regulations dictating many important aspects of packaging and labeling. The effect of such rigid controls would be felt not only by the businessman who desires to package his product in the most salable manner, but by the consumer who would be less able to secure from industry desired changes in packaging. Under such regulations, industry could not change its packaging practices for reasons of economic feasibility or in response to consumer demand without prior resort to the administrative agency for a formal change in the regulations. The effect is obvious-stagnation and inhibition of proved methods of packaging of consumer commodities.

It does not appear that sufficient need has been established to warrant the substitution of such rigid governmental control for private enterprise in this area. The unscrupulous who seek to deceive the consumer by false and misleading packaging and labeling practices are subject to controls imposed by existing law, which, as will be discussed later, are at least coexistence in general scope with the proposed legislation, and which would be entirely adequate if full enforcement were made possible. But, far more effective than governmental control, such practices are subject to the fatal economic condemnation of an outraged market.

The National Association of Margarine Manufacturers believes in and supports the rule of competition in the marketplace and favors encouragement and enforcement of that rule over the antithetical resort to governmental control. If enacted, the proposed legislation would establish an environment in which discrimination appears likely. By dividing responsibility between the Food and Drug Administration and the Federal Trade Commission, with the sole admonition that they "try" to make their respective regulations uniform, but with widely different sanctions available to enforce the regulations of these agencies, it ap pears clear that different segments of the business community would be subject to discrimination depending solely upon the happenstance of which agency asserts its authority to act.

Different and more stringent sanctions are imposed against violation of regulations promulgated by the Food and Drug Administrator than are provided for violation of Federal Trade Commission regulations. Section 3 (h) of the bill provides that violation of a Federal Trade Commission regulation constitutes an unfair or deceptive act or practice, in violation of section 5(a) of the Federal Trade Commission Act, 15 U.S.C. 45, for which violation a complaint and possible cease and desist order is the usual sanction. For violation of a regulation promulgated by the Food and Drug Administrator, concerning the same practices, the sanctions of chanter III of the Federal Food, Drug, and Cosmetic Act are provided, including injunction, seizures, and criminal nenalties.

Finally, the proposed legislation would increase the workload of presently overburdened agencies without providing a proportional increase in personnel, facil

ities, or funds. Particularly with reference to the Food and Drug Administration is this result undesirable when the addition of economic regulatory responsibility may require a sacrifice of efforts directed toward safety in food, drugs, devices, and cosmetics. In so doing, the bill would take the Food and Drug Administration out of its area of special competence and place it in the area of economic regulation under the antitrust laws, an area in which it has not heretofore developed any extensive expertise.

To a like result, jurisdiction presently exercised by the Federal Trade Commission under sections 5, 12, and 13 of the Federal Trade Commission Act over foods, drugs, devices, and cosmetics, in some areas at least, apparently would be taken from it despite the fact that that agency has customarily dealt with matters of this nature.

Aside from the foregoing objections, S. 387 appears unwarranted because the practices which it seeks to control are presently subject to adequate, and, in some instances, more encompassing, existing legislation.

The Federal Food, Drug, and Cosmetic Act prohibits the misbranding of those commodities subject to its provisions, 21 U.S.C. 301(b). Section 403 provides that a food is misbranded if, among other things, its labeling is false or misleading in any particular; it is sold under the name of another food; its container is so made, formed, or filled as to be misleading; or the package fails to identify its origin or quantity in terms of weight, measure, or numerical count. Similar provisions respecting the misbranding of drugs, devices, and cosmetics are contained in sections 502 and 602, respectively.

In addition, the Secretary of the Department of Health, Education, and Welfare is empowered by 21 U.S.C. 401 to establish standards of identity, quality, and/or reasonable standards of fill of containers whenever he determines that honesty and fair dealing in the interest of consumers will thereby be promoted. With respect to other consumers commodities, the Federal Trade Commission is vested with authority widely regarded as ample to prevent all forms of deceptive packaging practices.

Section 5 of the Federal Trade Commission Act, 15 U.S.C. 45, declares all "unfair methods of competition in commerce and unfair or deceptive acts or practices in commerce" to be illegal. Seemingly, this provision could encompass every deceptive practice specified in S. 387 as well as others not specified therein.

In addition, the Federal Trade Commission Act complements the Federal Food, Drug, and Cosmetic Act by providing, in sections 12 and 13, that the dissemination of any false advertisement for the purpose of inducing the purchase, in commerce, of food, drugs, devices, and cosmetics shall be an unfair or deceptive act or practice within the meaning of section 5.

The foregoing provisions of existing law outline in broad terms substantive bulwarks against deceptive packaging and labeling practices. The broad, sweeping condemnation of these statutes guards the consumer against present and future deceptive practices, and establishes an objective standard of commercial morality which industry, the courts, and the responsible administrative agencies have available as a standard against which to measure particular commercial practices. The National Association of Margarine Manufacturers believes that specific commercial practices are best dealt with on a case-by-case basis and, where practicable, on an industrywide basis, by courts and administrative agencies having particular competence over the subject matter in question and guided by a general legislative precept rather than a detailed pronouncement of specific prohibited practices.

One reason for this belief lies in the evolutionary nature of commercial practices, where variations upon specific practices are constantly being developed. Often, a statute which attempts to control certain practices becomes ineffective and its purpose frustrated by variations from the particular practices specified in the statute. Furthermore, where legislation, such as the instant bill, undertakes to deal with some undesirable practices, often the argument is successfully made that the Congress intended other practices of equal undesirability to be exempted from the sanctions of previously existing general law because such practices were not included in the more specific prohibitions of the more recent law.

The courts and administrative agencies, guided by general standards established by the Congress, are peculiarly capable of coping with specific undesirable practices, although their capability is subject to improvement. One area of possible improvement, pioneered by the Federal Trade Commission, is the making available of administrative guidance to industry in a variety of forms. The 97158-63-pt. 1-35

Commission, for example, has established procedures for the issuance of industry guides, advisory opinions, and regulations to deal with specific practices in any industry.

A comparison between the proposed legislation and existing law and procedures indicates clearly that each specific, alleged abuse sought to be reached administratively by the proposed legislation is generally amenable to control under standards of commercial conduct already established by statute.

Furthermore, the proposed legislation detracts from procedural safeguards allowed industry under present law. No provision is made in S. 387 for hearings and a record in the event of industry disagreement with a proposed regulation. Section 701 of the Federal Food, Drug, and Cosmetic Act contains a minimum of procedural safeguards of this nature. These safeguards should be extended to cover regulations promulgated under S. 387, if such bill is enacted.

The National Association of Margarine Manufacturers is also seriously disturbed by the apparent reversal of legislative philosophy evidenced by S. 387. Under established practice, a determination is made of the need for legislation, Congress then investigates the need, and, if necessary, formulates required legislation. Under this practice, the important elements of regulatory control originate from duly elected representatives of the people. The administrative agencies are left free only to supply mere administrative detail in accordance with specific, statutory guidelines.

The proposed legislation, however, appears to depart from this established practice. If enacted, it would contain a congressional determination of the need for legislation in certain limited areas but coupled with a direction to administrative agencies to formulate the necessary prohibitions.

As a member of the American business community, the National Association of Margarine Manufacturers must express its concern over this apparent attempt to vest unfettered legislative and regulatory authority in the hands of administrative agents.

The association believes that American industry, as a whole, is cognizant of its obligation to the public to maintain forthright packaging and vending praetices and that such cognizance is implemented by the knowledge that deceptive practices will result in a loss of consumer confidence and the imposition of established legal sanctions.

The association believes that the need exists for a statement of congressional policy implemented by an appropriation of funds adequate to allow the administrative agencies more fully to enforce existing law, particularly through the development of additional methods whereby industry may seek guidance as to the requirements of the law.

The National Association of Margarine Manufacturers therefore requests thecommittee to report unfavorably upon S. 387.

NATIONAL COFFEE ASSOCIATION.

New York, NY., March 11, 1963.

Hon. PHILIP A. HART,

U.S. Senate,

Washington, D.C.

SIR: This letter is submitted to set forth the views of this association regarding S. 387, a bill which is pending in the Senate and is directed toward control of packaging and labeling of food, beverages, and other consumer commodities.

The National Coffee Association is a trade association whose principal constituents are companies engaged in the importing, roasting, and distributing of coffee. The association is now in its 52d year of service to the U.S. coffee industry. Our members represent about 85 percent of the total tonnage of coffee consumed in this country. In 1962, that total figure represented an importation of more than 24 million bags of coffee which was valued at approximately $980 million.

Among the objectives and purposes of the association, as set forth in our constitution, are:

"To create and promote sound business relations, mutual understanding, and good wil among all engaged in any branch of the coffee industry;

"To promote the use and consumption of coffee;

"To gather and compile statistical and other data for the use of members. and for general publication;

"To conduct research and disseminate information;

"To cooperate with other trade groups and governmental agencies, both foreign and domestic, in the determination and enforcement of rules, laws and projects for improving and stabilizing the conditions under which the industry renders service to the public."

This association and the members of this industry are deeply committed to the concept of proper packaging, honest labeling, and fair dealing with the American consumer. The prestige and survival of this industry and of its members rest entirely upon our ability adequately and wholly to satisfy the consumer. This industry spends many millions of dollars each year aimed at maintaining and enhancing the quality, reliability, and integrity of the many brands under which coffee is sold in every part of the country.

In view of the extent and degree of our interest in fair dealing with the consumer and in the preservation of full and free competition which best serves the interest of consumer and producer alike, we wish to record our opinions concerning the proposed legislation.

We believe that the bill is not necessary and is injurious to both consumers and business for the following reasons:

(a) Existing law confers ample authority upon qualified agencies having jurisdiction over food products to adequately protect consumers' interests in packaging and labeling of such products.

(b) The proposed bill inhibits proper and legitimate competition and trade practices which operate to the benefit of the consumer.

(c) The measure places undue restrictions upon, or grants unwarranted governmental control over, legitimate marketing, packaging, and pricing practices. (d) The measure deprives the consumer of freedom of choice to meet individual needs.

Adequate protection of the consumers' interests in food packaging exists in the Food, Drug, and Cosmetic Act and the regulations that have been promulgated under it, which require prominent placement of net contents and ingredient information so that it may be read and understood by consumers and prohibits distribution of foods in containers that are misleading in any way and provides adequate guidelines to the manufacturer to fulfill these requirements.

The products distributed in this country have undergone changes for many years. No one can imagine that we have yet reached the perfect container as to size, content, or other features. What was a useful and desired unit or content at one point has often been rejected by the consumer in favor of another. By leaving the process of selection and rejection in the hands of the consumer, manufacturers have been stimulated to implement vast and beneficial changes promulgated by this freedom of choice. There may be those who would be content to end this process by implementing the proposed restrictions. We do not support this point, for we believe the full opportunity to present new containers, new quantities, and new ideas at the most reasonable price to the consumer is the essential foundation of free economy.

According to a recent study by an independent research organization, National Family Opinion, 82 percent of housewives do check package weights against prices. Six percent of the replies gave no clear opinion. Therefore, according to this study, it would appear that only 12 percent of housewives do not check package weights against prices.

We have a sense of obligation to communicate this thought for your respectful consideration. You have the means to protect the consumer in packaging and labeling products. This is evident by the number of different Federal, State, and municipal enforcement agencies on the job. The above survey would indicate that these agencies are successful in their activities and that additional laws are unnecessary inasmuch as 82 percent of the housewives do check weights against prices. It is respectfully submitted that you are employing shotgun therapy to protect 12 percent of American housewives who, for lack of interest or other personal reasons, never do check package weights against prices.

It would serve no useful purpose to deal at length with specific portions of the bill to further demonstrate that existing law, insofar as it relates to food and beverages, is adequate to protect the consumers' interests.

We do not oppose, but rather wholly endorse alert and vigorous programs for the protection of the consumer. We are, however, wholly convinced that voluntary actions in the food industry, supplemented where necessary by adequate laws, is all that is required. We have found that agencies charged with

this function are vigilant, effective, and amply armed with the authority necessary to perform their duties in protecting the consumers under existing laws.

At the present time, Federal agencies interested in the enforcement of food statutes and regulations include the Food and Drug Administration and the Federal Trade Commission. In addition, every State and many cities and municipalities have enforcement agencies, established under local government, to enforce regulations relating to food. The policing of this industry does not lack for numbers, authority, vigilance, or laws.

The chairman of the Federal Trade Commission reportedly has testified that his agency now has all the necessary legal authority to prosecute abuses in the packaging field. Recently, a commissioner of the Federal Trade Commission stated in a speech that the way to deal with packaging deceptions is to let the Federal Trade Commission handle them under the existing law.

We believe this measure is superfluous in the food field, that if enacted it would put added expense upon the consumer and the taxpayer, that compounding and multiplying laws promotes confusion and expense but not consumer protection, and that this bill unduly and unnecessarily inhibits free, fair, and open competition which is advantageous to the consumer and essential to the preservation of a free economy.

I respectfully request that this letter be made part of the record. For the convenience of the members of the subcommittee, I am taking the liberty of sending each member a copy of this presentation. Respectfully submitted.

JOHN F. MCKIERNAN, President, National Coffee Association.

STATEMENT OF NEW JERSEY PACKAGING EXECUTIVES CLUB

New Jersey Packaging Executives Club recognizes the awkward position which the language of the Hart "Truth in Packaging" bill places its opponents. In going on record as being against the provisions of this bill, the club is in no way condoning any deceptive practice which the authors of the bill or its sponsors or supporters are seeking to correct.

New Jersey Packaging Executives Club is strongly opposed to gross misrepresentation of products offered for sale to the general public whether this misrepresentation occurs in the packaging, advertising or general promotion of the product.

PEC strongly believes that

1. The majority of the points covered by the Hart bill are covered by existing legislation (listed below), usually not enforced.

2. This bill is too restrictive to those manufacturers who are not deceiving the public.

3. This bill is unnecessary and takes away important freedoms.

4. The consumer is now protected against harmful practices under existing laws, and should not be expected, through taxes, to pay for nebulous protection against sharp practices in the marketplace.

5. Competition results in the most powerful regulation possible: the decision of the consumer to buy. Restrictions on this freedom to compete serve to lessen competition, which discourages development of products, increases prices, and eventually harms the consumer by curtailing her choice.

EXISTING LAWS WHICH, IF FULLY ENFORCED, COVER THE MAJORITY OF POINTS IN THE HART BILL

1. Food, Drug, and Cosmetic Act of 1938, as amended 1958.

2. Meat Inspection Act of 1906, administered by the Agricultural Research Service of the U.S. Department of Agriculture (mandatory).

3. Poultry Products Inspection Act of 1957 (voluntary).

4. Agricultural Marketing Act of 1946, administered by Agricultural Marketing Service of U.S. Department of Agriculture (fruit, vegetables, dairy products. grading of meats).

5. Seafood Inspection Act of 1934, administered by U.S. Department of the Interior.

6. Fluid milk is regulated by State and local authorities under recommendations by U.S. Public Health Service.