Advisory opinion letter to Mr. Secretary

ADVISORY OPINIONS 1161 the plans and benefits and arrange the documents that would be necessary to implement such a program. In the approximate 1959-60 onion growing season, a voluntary plan of this type was attempted by the National Onion Association but failed miserably. Again, the logistics problems could not be overcome. Obviously in this type of a plan there is a need for a consistent, even flow of funds that can be relied on and the above considerations are what led to the development of the plan that we are asking an advisory opinion on from the FTC. Thank you so much for your assistance and cooperation. If there are any questions that we can answer, please let us know. We also hope that a few of us will be able to visit you in Washington, D.C. to fully

explain the concept before you.
Yours truly,
/s/ Jerry C. Daniel
Letter of Request
March 7, 1977
Dear Mr. Secretary:

The National Onion Association is starting to evolve a plan which is hoped will be effective in increasing the use and consumption of fresh onions particularly in the United States. The purpose of this letter is to ascertain from your commission if your attorneys feel that the plan of the National Onion Association steps over the line between what is \permitted and what is considered as illegal under various anti-trust nd other pertinent laws. The National Onion Association has proposed the following plan but it is not currently being followed. he National Onion Association is a non-profit Colorado corporation. It is a rather loose knit organization and therefore, does not have a great deal of cohesiveness or power as such pertains to control of members within the association, but does represent 50-75% of the production of onions in the United States. The leadership of the association has determined that it would be to the benefit of onion farmers, the association itself and manufactors and distributors of. onion containers if the consumption of onions could be increased in the United States through a promotion and advertising campaign. As a corollary to this, you might be interested in knowing that consumption of onions in the United States is far below that of most foreign countries. Since the association does not have a Federal or State marketing order and is not a cooperative and does not have viable means of raising much money, the following plan is being considered to pay for a vast advertising campaign.

The association wants to approach the container manufactors and suppliers who furnish onion containers and have them furnish to the association, an amount equal to one cent for each container that they manufacture or supply.

There are two major suppliers of raw materials for onion containers and there appear to be approximately sixty manufactors of onion containers.

The association estimates that the proposed plan would raise about one half million dollars per year for use in advertising the various attributes of onions. Since the association is a non-profit organization, it would use all monies for the advertising and would not profit from the venture itself. Of course, all members of the association, as well as consumers, hopefully would benefit from the proposed plan. It is understood that the container companies would not have to pass on the one cent per container increase to its onion producers, but as a practical matter, probably would do so. Since the association does not comprise all onion producers in its membership, it is planned that any individual, member of the association or not, who desired to not participate in the plan could write to the association, show proof of the purchase he made and receive back the penny per container that would be attributable to him.

Although it would be an administrative nightmare and the association leadership does not feel it would be fair for non-members to benefit and hang on to the coattails of members’ actions and expenditures, it is theoretically possible to limit the program to members of N.O.A. who purchase containers from container suppliers and companies.

Under the proposed plan, the association would act in effect, as an advertising agency and would take such actions as appear reasonable to improve the image of the onion and to promote an increase in the consumption of onions. It would use all of the funds raised in this manner for this purpose.

It would be very much appreciated if the legal department or whoever you feel is appropriate in the FTC would contact me and advise if there is any prohibition on the plan being considered by the association. If there are any limitations or any areas that you would want to caution us’ in, the information would be very much appreciated.

The association is anxious to implement the proposed plan in the immediate future and your prompt attention to this would be very much appreciated.

ADVISORY OPINIONS 1163 Thank you for your consideration and attention to this matter. Yours truly, /s/ Jerry ©. Daniel