Recipe promotional plan

No. 101. Recipe promotional plan. The Commission announced today it had given conditional approval to the use of a tripartite recipe plan promoting the sale of food products.

According to the terms of the proposed plan, the promoter will install a dispensing maehine (approximately 18" square) in each retail grocery store containing a suffcient number of redpe cards to meet the demands of its customers. In addition to containing a recipe of the week, the card wi1 also feature the specific brand name of one of the ingredients of the participating food suppliers. ADVISORY OPINION DIGEST 1885 Each participating retailer wi1 be paid $10 per month and furnished with posters and shelf markers publicizing the recipe cards and products of the participating manufacturers. Cost of the plan wi1 be borne by the partieipating manufacturers. Notification of the plan win be by a printed promotional piece and/or letter to be maned to an retailers in an area which was not defined with exact precision.

In its opinion the Commission said that Sections 2 (d) and (e) of the Robinson-Patman Act "require a supplier to treat all of his competing customers on a nondiscriminatory basis, which means that if the supplier furnishes promotional assistance to one customer he must make that assistance available on proportionally equal terms to all competing customers. The courts have also held that the supplier must comply with these provisions of the law irrespective of whether the promotional assistance is furnished to the retailer directly or through an intermediary, The three conditions which must be met before the Commission can give its approval to the plan are as follows: First, the plan must be offered to all competing retailers within a given maTketing m'en. ender the facts outlined in your letter, there appears to be an indication that the plan , as presently contemplated, may be offered only to those competing retailers "\vithin an arbitrariJy drawn geographical area. Second , the plan must be offered to all competing retailers within that marketing area. Competing retailers located on the periphery of said market areas are considered by the Commission to be included within the marketing area if in fact they do compete with those therein "\vho are offered participation in the plan. Third, the plan must be made available to a1l competing retailers irrespective of their functional c1assification. It appears that grocery stores wil be the principal beneficiaries of the plan. Ho"\vever, if the items involved in the plan are a1so sold by nongTocery stores , they must be accorded the same opportunity to participate in any promotional assistance given by the suppliers to competing grocery outlets. (File "'0. 6737018, released Nov. 11 , 1966. Modified July 11 , 1968, 69 F. C. 1211.