Cooperative advertising aIlowances

No. 10. Cooperative advertising aIlowances. A recent Fec1"cal Trade Commission advisory opinion informed a manufacturer that the requirements of Section 2(d) of the amended Clayton Act wil be satisfied where the proposed advertising aIlowance program reflects that alternative methods of promotion are available to customers unable to use the preferred method of advertising in the regular course of their business. As explained by the manufacturer, all of its customers wiIl be ofIered advertising aIlowances equal to 1 % of net purchases to defray up to a maximum of 50% of the actual cost of advertising its branded first-quality products in any ACB (Advertising Checking Bureau Inc. ) daily and Sunday newspaper. Where a retailer is unable in a practical business sense to advertise in such newspaper the program wil provide him with adequate alternative methods of sales promotion such as, but not limited to, other newspapers, letter stufIers or handbils as wil enable him to earn the allowances specified. A retaiJer may use up to 30% of his allowance in Christmas Catalog advertising where the brand name or label is prominently mentioned, payment for which is based on catalog circulation. New accounts and those with which the manufacturer has had Jess than one year experience wil be ofIered the same allowance, payment for which wil be computed on the basis of purchases for the first full quarter year. All accounts wil be notified of the program by first-class mail by the manufacturer s sales representatives and by notices accompanying invoices. (File No. 653 7053 , released Dec. 9 , 1965.