Advisory opinion letter to Mr. Millane
Opening text: President Sale of denture cleanser to grocery wholesalers and related outlets at higher prices than product is now being sold to drug wholesalers. :
77 F.T.C. 1742 · July 22, 1970 · File No. 7037115
source volume section (77 F.T.C. 1742)
Text is machine-OCR of the printed volume and may contain errors. Advisory opinions are the Commission's views on proposed conduct, not binding orders.
President Sale of denture cleanser to grocery wholesalers and related outlets at higher prices than product is now being sold to drug wholesalers. (File No. 703 7115) :
Opinion Letter
July 22, 1970
Dear Mr. Millane:
This is in further reference to your request of June 12, 1970, for Commission advice concerning your proposal for selling denture cleanser to grocery wholesalers and related outlets at higher prices than the product is now being sold to drug wholesalers. As the Commission understands your submittal, the product is now being sold directly to drug wholesalers with suggested consumer and retail prices published in the Drug Topics’ Red Book and the American Druggist’s Blue Book. You intend to expand distribution by selling to wholesale grocers and others through brokers while continuing your direct sales to drugwholesalers. Because of the difference in selling costs as between direct and brokerage house sales you propose other than drug wholesalers, such increase to reflect and include only the fees paid to brokerage houses for their services in selling your product. :
The Commission is of the view that to the extent the higher prices to be charged grocery wholesalers and related outlets include an amount paid brokers by your firm for their services in connection with the sale of your product an unlawful discount or allowance in lieu of brokerage will have been accorded drug wholesaler recipients of the lower prices.
Accordingly, the Commission is of the opinion that institution of your proposed pricing program would expose your firm to charges of ADVISURY OPLNIUNS WILT KRQunbold Wii asrun Lite granting unlawful discounts or allowances in lieu of brokerage to drug wholesalers i in violation of Section 2(c), amended Clayton Act. Under the circumstances of your presentation your direct buying customers, the drug wholesalers, would be exposed to charges of receiving or accepting an unlawful discount or allowance in leu of brokerage in violation of Section 2(c), amended Clayton Act.
By direction of the Commission.
Leiter of Request
June 12, 1970