Foreign origin-Container disclosure for contents of multiple foreign origin

No. 283. Foreign origin-Container disclosure for contents of multiple foreign origin.

The Commission advised a requesting party regarding information as to origin which should be set forth on a kit containing three domestic and eight foreign components from four different fore.ign countries.

Although the individual components are separately marked as to origin, this information is not readily available to a prospective purchaser at the time of purchase.

The Commission stated that a clear and conspicuous disclosure should be made on the container in the following terms, or in substantially equivalent terms: Some of the enclosed items are made in r countriesJ W, X , and Z,

DISSEXTING OPIXION
Al'Gl'ST 31 , 1968
BY ELMAN Commissioner:

I would have granted the applicant' request that it be per- ADVISORY OPINION DIGESTS 1665 mitted to mark the kit to read "domestic and foreign items enclosed. " (File No. 683 7156, released Aug. 31, 1968. 1'0. 284. Location of foreign origin disclosure. In response to a request for an advisory opinion, the Commission announced it would be necessary to disclose the foreign country of origin of imported stainless steel flatware on the outer portion of the cover of the container. Under the facts presented to it, the flatware will be properly marked as to its foreign country of origin on the underside of the handle when it is imported. Because of the manner in which the flatware will be repackaged in the United States, the foreign origin marking will not be seen by prospective purchasers through the cover of the container. Moreover, each container will be sealed with a plastic film wrapper thus making it virtually impossible to inspect the merchandise prior to the purchase thereof. The specific question ruled upon by the Commission was whether it would be necessary to disclose the foreign origin on the outer portion of the container, in view of the fact that the disclosure on the flatware cannot be seen prior to the purchase of the merchandise. In ruling that a meaningful disclosure would be required, the Commission said:

\Vhenevcr an affrmative disclosure of the foreign country of origin is required in order to prevent deception, the general rule is that the marking must be clear and conspicuous. This means that the disclosure must be placed in a location at the point of sale where it would be readily observed by prospective purchasers making a casual inspection of the merchandise prior to, not after, the purchase thereof. Under the facts described in your letter , the container normally \vauld not be opened until after the pun hase has been consummated. Since the disclosure of origin on the underside of the flahvare cannot be seen through the cover of the container, the Commission is of the opinion that the disclosure \ViE have to be made on the outer portion of the cover of the container in order to inform prospective purchasers of a material fact bearing upon their selection. (File )/0. 6837155, released Aug. 31, 1968. o. 285. Formation of common marketing association by agricultural cooperatives. The Commission rendered an advisory opinion to the effect that it could see no objection to the formation by three ag-ricultural cooperatives of a nonprofit marketing association. While the marketing association was to be formed by the three cooperatives under state Jaw, it was contemplated that any other producer of the same products could become a member. At the time, there were several other corporations which were not mar-

keting cooperatives but which were engaged in the production of the same products.

It was stated that the association would have no capital stock would be a nonprofit cooperative organized for the mutual benefit of its members, membership would be restricted to producers who patronize the association, voting rights were to be equal and no member was to have more than one vote. Property rights were to be unequal and in proportion to the patronage of each member to the total patronage of a1l members with the association. It was further provided that the association would not market the products of nonmembers. The proposed contract with the producers provided that the association would be the exclusive sales agent of the producers for the purpose of marketing their products. The Association could, under the contract, market or direct the marketing of a1l products produced by the producers in such manner and under such prices as it deems best. The association could designate authorized handlers to market the products of the members and the producers must market through these handlers. The producers themselves could execute a Handler s Contract and become authorized handlers. The Handler s Contract between the association and a1l authorized handlers provided that the handler was to act as the hired sales agent for the association and was to bc governed by the rules, regulations, orders and prices issued by the association. The handler agreed therein not to se1l for less than the prices recommended by the association. The handlers could, under the contract, market other products for the producers and could handle products for nonmembers. The opinion pointed out that the purpose of the Capper-Volstead Act (7 D. C. 291, 292) is to permit persons engaged in agricultural pursuits to associate in the co1lective marketing of their products. Under its provisions cooperative associations may make contracts or agreements as wil effect such purpose and may have marketing agents in common. It has been construed as a grant of immunity from the antitrust laws insofar as co1laboration among members of the cooperative associations are concerned. This immunity ends, however, at the point where they act, either by themselves or with other persons or entities not in this category, to restrain trade or otherwise eliminate competition at successive .3tages in the marketing process. The opinion further advised that the Commission had considered the proposal and was of the opinion that formation of the ADVISORY OPINION DIGESTS 1667

proposed marketing association by the three cooperatives would not result in violation of Commission administered statutes if implemented in the manner outlined. The Commission cautioned however, that the opinion was limited to the formation of the proposed marketing association and was not to be construed as approval for any practice which may be predatory in nature, may result in unlawful monopolization, may restrain commerce to the extent that prices are unduly enhanced thereby, nor to conspiracies or combinations between the association and persons or entities not in this category. (File No. 683 7129, released Aug. 31 1968.

"'0. 286. Foreign origin- LabeJing requirements for tennis shoes made in Virgin Islands with foreign component. The Commission advised a requesting party that no disclosure need be made as to the presence of foreign made uppers used in the manufacture of tennis shoes in the Virgin Islands. The uppers accounts for less than 30 percent of the total product value of the shoes and the other components are of domestic origin. (File 1'0. 683 7139, released Aug. 31 , 1968.