Commission declined to approve proposed three party promotional plan in the food industry

No. 312. Commission declined to approve proposed three party promotional plan in the food industry. The Commission issued an advisory opinion informing an applicant that his proposed three party promotional plan in the food industry would violate statutes administered by the Commission. Under the plan, the promoter proposes to solicit sales of TV advertising time to suppliers of products retailed principally through grocery stores. The rates charged suppliers would be based exclusively on the television time furnished the supp1ier. In addition, each such supplier would receive the right to have .its products promoted in the establishment of participating retailers. Retail participation in the plan would be so1icited by the promoter through invitations published in trade journals of general circulation to the retail trades. Retailers would participate in the plan by providing special in-store displays of products specified by suppliers who purchase advertising time on the promoter programs and by agreeing with such suppliers to maintain during the period of the promotion a reasonable inventory of the products involved in the in-store promotion. The display obligation of each participating retailer would be geared to the participating retailer s facilities and the product or products to be displayed by that retailer. In return, participating retailers would obtain advertising on the promoter s television programs in accordance with a formula giving each participating rctailer a minimum 10second advertising spot on a television program during the specified period of promotion. Additional 10 second spots would bc allowed on the basis of the retailer s purchases during an immediate prior period of suppliers' products covered by the promotional plan. On the basis of the information submitted in connection with the application for an advisory opinion, it appeared to the Commission that the proposed arrangements for individual negotiations between suppliers and retailers with respect to display obligations of the retailers would probably violate Section 2 (d) of the Clayton Act, as amended, and possibly Section 5 of the Federal Trade Commission Act. Furthermore, the plan made inadequate provision for informing the retailers of their opportunity to partici pate. Commissioner Elman did not concur in the Commission s opinion. (File No. 693 7029, released Dec. 20, 1968.