Cooperative advertising plan with no ceilng on suppliers' payments

No. 49. Cooperative advertising plan with no ceilng on suppliers' payments. A retaiJer has been advised by the Federa1 Trade Commission that its proposed standard cooperative advertising agreement with its suppliers is not objectionable. The contemplated agreement states that the supp1ier (1) agrees to pay a fixed percentage of the requesting retaiJer s cost of advertising and (2) is offering proportionally equal allowances to the retaiJer s competitors.

The Commission noted that the plan provides for promotional payments without limitation as to amount and that it is more customary for suppliers to limit their obligation by a percentage of a dealer s purchases.

However, this might be " the advisory opinion said the Commission has concluded that no objection will be raised suppJiers decide to eliminate ,. ,. * (thisJ limitation and undertake to pay a stated percentage of all the advertising conducted by their dealers. This presupposes, of course, that the suppJiers will make the same offer available to a1l competing customers and that the offer is functiona1ly usable by a1l competing customers, The plan, the advisory opinion added does contain features which might conceivably be used to greater advantage by larger retailers. But these prospects appear so remote, the Commission is not inclined to object un1ess and untiJ future experience shou1d produce presently unexpected evidence that some customers actua1ly received favored treatment. Objection then would be taken on1y after proper and adequate notice that the plan had not deve10ped as anticipated. " (File No. 633 7060, released May 20 1966.