Tripartite promotional plan in the grocery field

No. 387. Tripartite promotional plan in the grocery field. The Commission issued an advisory opinion with respect to a proposed tripartitie promotional plan which proposed to secure advertising from packagers of food and grocery products. and place ads in retail stores. The display ad will measure 22" x ADVISORY OPINION DIGESTS 1117 21" and can be located in the middle of the store with or without aisle directory information or it can be divided in half and placed on the wall of the store. Payments to stores would be calculated in terms of the number of ads installed, the rate per ad to vary with the monthly traffc in the store, the minimum payment to be $4.25 per month per ad, and the smaller grocery stores wi1 be paid more proportionally than larger stores. Competing retailers would be informed of the opportunity to participate in the plan through personal solicitations, advertisements in trade journals, and direct mailings to every grocery retailer in the country which has been in business for a period of at least 6 months. The Commission stated that the proposed method of calculating payments to stores, if implemented as stated, would not violate the requirements of proportionally equal terms in Guide 7 of the Commission s Guides for Advertising Allowances and Other Merchandising Payments and Services (May 29 , 1969). The proposed method of informing competing retailers of the opportunity to participate in the plan, if implemented in good faith, seems to satisfy the requirements of Guide 13 (a) (1). As long as non-food items and food items likely to be sold in stores other than supermarkets are not advertised, a plan to provide availability to all grocery stores of an sizes would meet the requirements of availability to all competing customers as required by Guide 9. The proposed ad which can be used in an aisle or on the wall of a store would appear to be "usable in a practical business sense" in a store of any size. Thus the plan satisfies the requirements of Guide 9 that the plan "* * ,', should in its terms be usable in a practical business sense by all competing customers, " Therefore no alternative plan seems to be required in the absence of proof that some customers cannot in fact make use of the proposed ads. The Commission advised that were the plan implemented as proposed, the Commission would have no objection to it. The Commission pointed out that were the plan implemented in a different manner, the promoter, the supplier, and the retailer might be acting in violation of Section 2(d) or (e) of the Clayton Act, as amended, and/or Section 5 of the Federal Trade Commission Act. (File No. 703 7031 Released October 29 , 1969)