Mrs. GOODWIN. But I see nothing in the bill that would diminish the beauty of your package. I still think that your people can use all the imagination and ingenuity in making packages beautiful and attractive to the shopper.

Mr. DUNNING. If the bill passes, Mrs. Goodwin, I would hope you are right and I am wrong. My reading of the bill would indicate to me that there are limitations in it that don't exist today. I don't see the necessity for them or I would not have come down here.

If I thoroughly agreed with everything I probably would have stayed home and worked.

Mrs. GOODWIN. That is all, Mr. Chairman. Thank you.

Mr. CHUMBRIS. Just one point in clarification. As I understood your point, though, you did not want the standardization because you might want to make another product to fit the compartment of a car for kleenex, or you might want to compress more into a box. That was the liberty that you wanted.

Mr. DUNNING. Well, take those sandwich bags that Mrs. Goodwin showed. We just decided now that people are using sandwich bags in such volume that the 75 count we have in that pack is not enough for the family where the husband takes lunch and she has several children going to school taking lunches, and so we are changing now to a 150 pack. We are keeping the 75 pack, but we are coming out with a 150 pack.

We wouldn't have wanted, if some other group had been brought together by the Federal Trade Commission, to agree that 75 or 80 are the accepted counts in this field, to have had to go down and say, "Look, we are coming out with the 150 count which was not agreed to in the prior meeting," and of course every other manufacturer of sandwich bags would be advised Scott was coming out with 150, they would all start coming out with 150, we would all go to the store at the same time with 150, and this would diminish our competitive advantage for having figured out it was now time to go to 150.

Mr. CHUMBRIS. That was my impression of your statement earlier. Mr. DUNNING. Yes. This I think is a restriction on the free competitive forces that I don't think we need to introduce, because I don't think it is anybody's decision by present practice.

Senator HART. Mr. Clifford?

Mr. CLIFFORD. No questions.

Senator HART. Mr. Cohen?

Mr. COHEN. I just can't allow to stand on the record unchallenged a statement made in the colloquy between yourself and Mr. Chumbris, in which you both agree with each other warmly that the little guy would be hurt by this bill.

The testimony we have had to date has indicated something quite different. It is the little guy that would be benefitted because he is the guy that cannot afford to compete on the basis of rapid package changes, which of course a lot of the competition in this area now depends upon.

He is in a far better position if he can concentrate on price and quality rather than on package changes. I don't want to argue with you on this or with Mr. Chumbris, but I do want to have the record clear, our record does not express that the little guy is going to be hurt by this bill, but on the contrary he may actually be benefitted.

97158-63-pt. 1-22

Mr. DUNNING. Mr. Cohen, I am not at all surprised that many smaller manufacturers would say that to you, because my philosophy I guess as a marketing man is a little different than many others. So many people look at their competition all the time. They think their only responsibility in life is to match what the competition does.

We in Scott go at the business a little differently. We think the smart thing to do is take a leadership position, find out what the market really wants, and we find this out by going out and asking

women.

We don't make our own specifications. We got out and ask thousands of women what they really want, and we have them try this, that, and the other thing until we find what they do want. Then that is what we manufacture.

So that whenever we change a size to anything else, it is on very sound documentary consumer research, and we do it as a leader not trying to match what the competition is doing, but to take an individualistic position, if you will, in the marketplace.

I think the smaller manufacturers, if they really wanted to be successful, would take a page out of that book, because that is really the way to do it.

You are not going to be a small manufacturer and come out with a detergent in exactly the same volume, size, everything else as the big detergent makers and get to first base. You simply aren't going to do it.

So I say that the more freedom a small manufacturer has, if he has got the ingenuity and the creativity and innovating tendencies that I speak about, he has got a better chance to win than he is going to have if this thing gets locked up to where you are all going to be about the same size and the same package.

Mr. CHUMBRIS. On that point, going back to another hearing that our subcommittee held on drugs, we had two people come before us, one of them had a $500,000-a-year business, and he maintained that $500,000 a year.

We had another witness who started out as a $500,000-a-year business, and he built his business because of ingenuity, coming out with new drugs, and he now is a $53-million concern. That is the American way of life.

Mr. DUNNING. Right. I'm with you.

Mr. CHUMBRIS. You are with my Senator. That is exactly his sentiments as he expressed in his opening statement.

Senator HART. If there are no further questions, Mr. Dunning, thank you again. I should say that the vigor of your presentation has been very effective, as we anticipated.

Indeed the invitation to you to return was in recognition of the fact that you have established a progressive point of view in the industry, and have expressed eloquently an attitude toward this legislation which, while I don't share it, I want very much to have as strongly on the record as it can be put there, and I know of nobody in this country who can do it more effectively than you have. Mr. DUNNING. Thank you very much.

Senator HART. Our concluding witness this afternoon is Edward Brown Williams, counsel for the National Association of Frozen Food Packers.

STATEMENT OF EDWARD BROWN WILLIAMS, COUNSEL, NATIONAL ASSOCIATION OF FROZEN FOOD PACKERS, WASHINGTON, D.C.

Mr. WILLIAMS. Mr. Chairman, since we are late in the afternoon, and this is a fairly long statement, if you wish I can deal briefly with the last 7 or 8 pages of it.

Senator HART. Mr. Williams, so far as the committee and staff are concerned, we are not under that kind of pressure. You go ahead and present it as you would like. You in turn have waited all day, so by all means.

Mr. WILLIAMS. I don't particularly want to bore you.

Senator HART. Have no sensitivity about that. We will be very glad to listen.

Mr. WILLIAMS. My name is Edward Brown Williams. I am counsel for the National Association of Frozen Food Packers, on whose behalf I appear. The membership of the association represents some 80 percent of the frozen food production of the United States. In a relatively few years the production of the frozen food industry has attained a value of more than $3 billion on an annual basis.

The association is in full agreement with the desire of the sponsors of S. 387 to eliminate misbranding and deception from the packaging and labeling of food commodities. We oppose such practices in any industry, including our own. We are satisfied, however, that the present provisions of the Food, Drug, and Cosmetic Act are adequate to control the kind of practices which I have named and that additional legislation for that purpose is not needed.

It is our considered opinion, moreover, that the bill would delegate to the Food and Drug Administration discretionary authority of a scope which goes beyond the regulation of misbranding and deception. We believe that this opinion is supported by the language of the bill and the legislative record upon which its provisions are based.

In his remarks at the time of the introduction of the bill as reported in the Congressional Record of January 21, 1963, Senator Hart said: Our aim is threefold: First, that the spirit and substance of the antitrust laws be extended to the relatively new form of nonprice competition represented by packaging. Second, that the American manufacturer be freed from the unfair trade practices that have grown up in this area beyond the reach of present law. Third, that the American consumer can know what she is buying and paying for.

The second and third aims stated by Senator Hart are, in our view, fully within the scope of present law, as we think previous witnesses have demonstrated; but the first of these aims, the extension of the antitrust laws to so-called "nonprice competition" could hardly be achieved under the existing provisions of the Federal Food, Drug, and Cosmetic Act. If only the prevention of those practices in "nonprice competition" which are deceptive were the objective of the bill, it would not seem logical to us to strive for that objective by way of an amendment to the Clayton Act, which is not aimed at deceptive practices. It could, as we have said, be attained under existing law. So-called "nonprice competition" cannot, in any manner which we can logically conceive, be equated with misbranding or deception. Competition through packaging or advertising practices can be fair or unfair depending upon its nature, just as can competition directly

related to price. It is obvious, however, that all packaging or advertising competition is not unfair or deceptive.

It would appear therefore that, in seeking to extend the antitrust laws to "nonprice competition," the bill pushes well beyond the well established concepts of misbranding and deception and includes practices which are fair and honest and in the interest of both business and the buying public.

That the authority which would be granted is not limited to misbranding and deception seems apparent from the language of the bill itself. The following references to provisions of the bill (except sec. 2) are to subdivision of section 3A of the Clayton Act which would be added to that act by the bill.

For example, section 3(c) (1) and (2) provide for regulations applicable to commodities generally, which would fix the location and prominance of the quantity of contents, including type size and face. It could not, of course, be predicted with what rigidity standards establishing location, prominence, type size, and face would be imposed and into what categories commodities would be segmented for the purposes of the regulations. It is evident that location, prominence, type size, and face are all elements determinative of readibility of statements of net contents and hence bear intimately upon whether the statement is deceptive. It is equally evident, however, that the power delegated by the provision in question is not limited to the prescription of regulations which go no further than to prevent misleading or deceptive net content statements.

No standards for the exercise of this authority are established. No procedural safeguards are provided. It is clear enough that deception can be avoided by clear and unambiguous net content statements without standardization of location and size of type. Yet the bill would permit the agency to go beyond the prevention of deception and to force conformance to its own ideas of the desirability of requiring all packages, at least in categories selected by it, to bear net content statements in the same location in uniform size and face of type, and, in conjunction, with section 3A (c) (6), to prescribe in effect the design of the package itself. It seems plain, therefore, that prevention of deception is not the limit of the application of section 3A (c) (1) and (2).

Section 3A (c) (3) and (4) are subject to like comment. It is apparent that words qualifying statements of net content may or may not be deceptive or misleading, depending upon the context of the label and the commodity contained in the package. It is equally evident that a statement that a price advantage is being offered to the purchaser may be informative and accurate and thus advantageous, rather than misleading or deceptive. Yet there being no standard for the exercise of the authority, the agency could apply it own ideas. of what is good for the purchaser, above and beyond prevention of deceptive practices. Again-if prevention on deceptive practices were the limit of the authority granted, present law is adequate.

Under section 3A (e) the agency may establish regulations for particular commodities, if it "determines" that they are necessary to establish or preserve fair competition or to prevent deception of consumers. The language employed is reminiscent of some of that found in the Food, Drug, and Cosmetic Act and the Federal Trade Com

mission Act and, indeed, when taken alone, substantially reflects basic purposes of those acts. Here again, if this were the extent of authority which could be exercised under section 3A (e), existing laws need not be duplicated by this bill, since those things can be done under them. But this bill is not limited to those things. It authorizes the establishment of weights or quantity, and the sizes, shapes, or dimensional proportions in which a commodity may be sold-in other words, standardization of containers and weights of contents.

We are forced to recall that this committee has heard expounded the economic theory that many industry packaging practices are wasteful and unduly costly to industry and consumer alike, that Government should curb such practices, and that it is bad for one firm to be permitted to market a package which is allegedly uneconomic and because consumers are attracted by it-to force other members of the industry to engage in a similar endeavor.

There were references to containers which give a "billboard effect, an advertising effect." We must ask, what is wrong with this? Billboards and advertising and more expensive containers are not deceptive because they sell a product. If they, or a container, are in fact deceptive, present law can deal effectively with them.

If, regardless of deceptiveness, a container could be prohibited because it has a "billboard" or "advertising" effect, what about nondeceptive advertising outside the store? We wonder whether there will perhaps be another bill which would curb this also on the ground that it effectively plugs a product at a cost higher than that for which it would be possible to market the product and is therefore uneconomic and contrary to the best interest of consumers. We are apprehensive that the concept of deception and unfair competition is being so broadened by this bill, read in the light of its legislative record, that legitimate and heretofore clearly lawful business operations and policies will be subjected to Government control.

Let me just remark here that the impetus to buy may arise, not because a cute, tall, thin, bottle is deceptive but because the purchaser likes it and would rather have an attractive bottle than a drab one.

If, for example, a packer of frozen concentrated citrus juices should find it feasible and attractive as a business proposition to market his product in a curvaceous container instead of in a container with the simple lines of the traditional tin can, we think that he is entitled to it so long as he is not deceiving the consumer.

Some individuals deplore as uneconomic the additional costs which they say are involved in the building of a package beautiful. It seems at least doubtful whether their economic theory is so sound that they can demonstrate that, instead of hiking costs, such innovations do not sell more goods and, in the long run reduce costs. If, as we believe, this doubt exists, surely restricting legislation is not appropriate again, when there is deception, there is already applicable legislation.

Section 3A (g) of S. 387 would require each packer or distributor to submit to FDA upon its request

a true and correct sample of each package and label used or to be used by that producer or distributor for or in connection with the distribution in commerce of any particularly described consumer commodity *

This apparently means that the filled package containing the food product must be submitted. In the case of some manufacturers this