Cooperative advertising program must be made avail

No. 92. Cooperative advertising program must be made avail. able to all competing customers.

The Commission was requested to furnish an advisory opinion concerning a proposal by an advertising agency to solicit suppliers of products sold in drugstores to permit the agency to place some of their money for advertising in one trade area. Suppliers were to he charged at the rate of $3 per each store which agrees to participate. The agency wi11 notify a11 drugstores in the area that, for example, supplier A wants to participate in the plan and ask each store to mark a self-addressed card as to whether they either displayed the item and/or if they

or inwould purchase additional products either for the display antieipation of the advertising campaign of that product. If coopera-700 stores return the card as evidence of their in-store tion, the supplier would then pay the ageney $2 100 at the rate of $3 per store. The agency will then take this sum and place the money in an advertising campaign for the supplier. In return for the pharmacists' cooperation , the agency wil tag each supplier s advertising with "this product avai1able at your local pharmacy." No specific names will be mentioned. Although each supplier s advertising will be run separately and there will be no joint advertising, eaeh wil be able to buy advertising under discounts earned from collective buying of space under the contract for all participating suppliers. There wil be no payment to any individual druggist or association of druggists. Payments to the agency wil be by the media in the form of agency commissions. Further, none of the advertisements to be published wil contain selling prices for any of the products featured therein. The plan was subsequently amended so that the offer would be extended to all competing retailers of the products advertised instead of just to drugstores. However, the agency advised the it had already received negative answers from a number of food chains and other retailers and, consequently, it proposed to leave the tag reading as above, but that if any of the others subsequently indicated they would like to participate, the tag would be amended to read " available at your local pharmaey and grocery store " or " variety store" as the case may be. All of these stores wil continue to be notified periodically. The Commission advised that while no specific customer wil be named in the proposed advertisements, the fact that a class of customers will be specified , namely, pharmacies, means that the principles of Section 2(e) of the Robinson-Patman Act apply and each supplier would owe a duty to make this proposal available on proportionally equal terms to all of their competing customers. The Commission further advised that it appeared the agency proposed to operate the plan in such manner as to meet the test of that Section, assuming, of course, that all competin retailers wil be notified of the availability of the plan and offered an opportunity to participate and that the tag will b changed in an appropriatc manner if other than pharmacies evidence an interest. (File 1\0. 673 7009 , rcleased Oct. 13, 1966. Modified July 11 , 1968, 69 F. C. 1211. ADVISORY OPINION DIGEST 1877