Advisory opinion letter to Mr. Dufresne: the Thank you for your lettcr of for an advisory application of Mr.

January 7 , 1974

Dear Mr. Dufresne:

January 3, 1974 , concerning the Thank you for your lettcr of for an advisory application of Mr. Don Odessky of Don Odessky, Inc., opinion.

We stated in our letter that "the amount of the payment would be based on a percentage of purchases with a relationship to the cost of thc display" so that it would be clear that no overpayments would be permitted. All customers would be paid at thc same rate and this would be donc by basing the payments on the dollar quantity of goods purchased during a specified period. Specifica1ly, a supplier would give each competing customer an a1lowance of four (4%) percent on the dollar volume of purchases to promote his product. A1l customcrs of the same supplicr would be paid an identical ratc but in no cvent to exceed the cost of the display or other promotion. The amount earned could be ADVISORY OPINIONS 143

used for displays, newspaper advertising, handbils and stuffers. Whatever the means of promotion selected, the payments made would be calculatcd by actual or approximate costs and would never be more than the cost of the promotion utilized.

The Odes sky company, as a service organization, would he responsible for insuring that a1l customers were advised of the availability of the program, and fixing the costs of the promotion utilized so that some customers did not receive payments in amounts greater than the costs of the promotion and thus obtain a price advantage. There would always be a ceiling on payments. The Odessky compRny would see to it that the services the supplier is paying for arc furnished by checking the stores, the displays and other promotions utilized and also by making certain that no overpayments are involved. By utilizing the services of a third party to monitor the program, performance can be verified and the obligations of thc Robinson-Patman Act wil be satisfied.

Again , thank you for your interest and if you need any additional

information , please give me a cal1.
Sincerely yours
/s/ Basil J. Mezines

LetWT of Request