Chicago Macaroni Co

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IN THE MATTER OF CHICAGO MACARONI COMPANY, TRADING AS A. MORICI AND G. MATALONE COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Dockel 2848. Complaint, June 16, 19tJG~Decision, Aug. 12, 199G Where a corporate wholesale grocer engaged, among other things, in preparing, packing, selling, and distributing a table oil composed of fifteen percent olive oil from Spain, and eighty-five percent cottonseed oil, or corn oil~ Labeled containers thereof with name "Italy Brand Table Oil", and set forth thereon Italian and English statements, and words "Packed by A. 1\Iorici & G. Mataloue Co.", etc., and also pictorial representations of Italian medals or coins depicting persons showing Italian characteristics, and decorative floral sprays similar to those found on other Italian products, notwithstanding fact that no part (If said product was produced in or imported from Italy, and same Wll.S not pncked by the fictitious concern indicated through use of name ".A Morici & G. 1\Iatalone Co.", but by aforesaid corporation, the ordinary American name of which included one of the great American cities;

'With tendency nnd capacity to deceive ll.nd mislead purchasers and prospective purchasers thereof into belief that said product's olive oil ingredient wns produced in or imported from Italy, and that said A. Morici nnd G. Matalone Company was nn Italian or Italian-American concern engaged in importing olive oil from Italy, and distributors and purchasing public into erron<'oml belie! that said statements nnl1 representations were true, nnd with etrect o! inducing members of public to purchase said product on account of snell erroneous belief, and of unfairly diverting trade to it from competitors, among whom there are those who, as manufacturers, blenders, sellers, and distributors o! olive oil, table oil and other like and similar products In Interstate commerce, truthfully advertise and represent the merit, origin, and packing o! their respective products, and do not advertise and represent the same or any part thereof as produced In or Imported from Italy when such Is not the case; to the substantial injury ot competition in commerce :

Held, That such nets and prnctlces, under the conditions and circumstances set forth, were to the prejudice of the public and competitors and constituted unfair metlJOds of competition.

Mr. Joseph C. Fehr for the Commission.

Mr. Jolm A. Sbarbaro, of Chicago, Ill., for respondent. Colli PLAINT Pursuant to the provisions of nn Act of Congress, approved September 26 1914 entitled "An Act to create a Federal Trade Comnnssion,. to' define' its powers and duties, and for other purposes, " t h e Complaint 23F.T.C.

lt,ederal Trade Commission, ha.ving reason to believe that Chicago Macaroni Company, a corporation, trading as A. Morici and G. Matalone Company, hereinafter referred to as respondent, has been and is using unfair methods of competition in commerce as "commerce" is defined in said act, and it appearing to said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows:

PARAGRAPH 1. Respondent, Chicago Macaroni Company, trading as A. Morici and G. Matalone Company, is a corpoartion organized and existing under and by virtue of the laws of the State of Illinois, having its principal office and place of business at 2148 Canalport A venue, in the city of Chicago, in the State of Illinois. Respondent, for more than one year last past has been, and still is, engaged in the wholesale grocery business, and among other things prepares, packs, sells, and distributes a table oil which it labels "Italy Brand Table Oil." This preparation is a blend of olive oil and other vegetable oils intended for use in salads, cooking, baking, and other kitchen uses. When said product is sold, respondent transports or causes the same to be transported from its place of business in the State of Illinois to the purchasers thereof located in States of the United States other than the State of Illinois, and in the District of Columbia. There has been for more than one year last past, and still is, a constant current of trade in said product sold and distributed by respondent, in commerce between and among the various States of the United States and in the District of Columbia. Respondent is now, and for more than one year last past has been, in substantial competition with other corporations and with individuals, partnerships, and firms engaged in the sale and distribution of like and similar products in commerce between and among the various States of the United States and in the District of Columbia. PAn. 2. In the course and conduct of its business, as aforesaid, the respondent, in selling its table oil and for the purpose of creating a demand upon the part of the consuming public for said product, now causes, and for more than one year last past has caused, the containers in which said product is packed, sold and distributed to the consum· ing public, to be marked, branded and designated with certain de· scriptive advertising matter. By said means respondent makes and has made to the general public many unfair, false and misleading statements concerning its said "table oil." On the front of such containers appear the following printed repre· sentations:

CHICAGO MACARONI CO. 253 251 Complaint ITALY BRAND TABLE OIL Un Purissimo composto dl quidici per cento d'olio di oliva e ottanta cinque Per cent d'altrl olu vegetali.

Packed by A. Morici & G. Matalone Co.

Cl!icago, Ill.

On the back of such containers the following appears: ITALY BRAND TABLE OIL An excellent composition of fifteen per cent imported olive oil and eighty-five Jler cent of other vegetable oils.

Packed by A. Morici & G. Matalone Co.

Chicago, Ill.

On both sides of such containers, the following appear: ITALY BRAND TABLE OIL Best tor salads, cooking, baking and all kitchen uses. Olio di tavola per insalata fritture e uso di cucina in generale. Packed by A. Morici & G. Matalone Co.

Chicago, Ill.

. Such labels further carry pictorial representations of several Ital- Ian medals or coins whereon are depicted persons showing Italian characteristics; a picture in the nude of a boy and a girl, the former being represented as dark and the latter as blond, in harmony with the Italian concept of beauty in the two sexes; and decorative floral sprays similar to those found on other Italian products . • PAR. 3. There are among the public many purchasers who use olive 0lls nnd table oils produced in or imported from Italy in preference to similar products produced in the United States, or produced in or imported from other foreign lands, believing that olive oil produced in, or imported from Italy is superior in quality to that Produced in any other country.

COl\I:MISSION~ DECISIONS254 FEDERAL TRADE Findings 23 F. T.C. PAR. 4. The statements and representations set forth in paragraph 2 hereof have a tendency and capacity to deceive and mislead pur· chasers and prospective purchasers of said respondent's product into the belief:

(a) That the olive oil ingredient of its said product was produced in or imported from Italy;

(b) That said product is packed by A. Morici and G. Matalone Company and that said A. Morici and G. :Matalone Company is an Italian concern and is engaged in the business of importing olive oil from Italy.

In truth and in fact, no part of said product was produced in or imported from Italy. Nor is it true, as represented, that said product is, or has been, packed by A. Morici and G. Matalone Oompany. The representations made by the respondent with respect to its "table oil" and the ingredients thereof, as well as the packing thereof, are false, misleading, and untrue.

PAR. 5. There are among the competitors of the respondent in interstate commerce, blenders, sellers, and distributors of like and eimilar products who truthfully advertise and represent the merit, origin, and packing of their respective) products and who do not advertise and represent that said products or any part of said prod· ucts were produced in or imported from Italy when such is not the case.

PAR. G. The above alleged acts and practices of respondent have the capacity and tendency to mislead and deceive purchasers and prospecti vo purehasers into the erroneous beliefs described in para· graph 4 hereof and into the purchase of respondent's product on account of such beliefs. Thereby trade is unfairly diverted to re· spondent from respondent's competitors in interstate commerce re· ferred to in paragraph 5, and as a consequence thereof substantial injury is done by respondent to competition in interstate commerce. PAR. 7. Said acts and practices of respondent are all to the preju· dice of the public and respondent's competitors, and constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REronT, FINDINGS AS TO THE FACTs, AND Onder Pursuant to the provisions of an Act of Congress approved Sep· tember 26, 1014, entitled "An Act to create a Federal Tmde Coal· mission, to define its powers and duties, and for other purposes,'' CHICAGO MACARONI CO. 255 t51 Findings the Federal Trade Commission, on the 16th day of June 1936, issued and served its complaint in this proceeding upon the respondent, Chicago Macaroni Company, a corporation trading as A. Morici and G. Matalone Company, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act.

After the issuance of said complaint and the filing of said r~ spond~nt's answer' thereto, the respondent, through its attorney, John A. Sbarbora, filed a motion to withdraw said answer and filed a substituted answer, subject to the approval of the Commission, in which substituted answer the respondent stated that it Waived hearing on the charges set forth in the complaint, that it admitted all of the material allegations of the complaint to be true and that it consented that the Commission may, without trial, without further evidence and without any intervening procedure, make, enter, issue and serve upon it, the said respondent, its findings as to the facts and conclusion based thereon and an order to cease and desist from the methods of competition alleged in the complaint. Thereafter, the proceeding regularly came on for final bearing before the Commission on said complaint and the answer of the respondent, and the Commission having duly considered same and being fully advised in the premises, finds that this proceeding is in ~he interest of the public and makes this its findings as to facts and lts conclusion drawn therefrom:

FINDINGS AS TO THE FACTS • PARAGRAPH 1. The respondent, Chicago :Macaroni Company, trad- ~ng as A. Morici and G. Matalone Company, is a corporation organlZed and existing under and by virtue of the laws of the State of Illinois, having its principal office and place of business at 2148 Canalport Avenue, in the city of Chicago, in the State of Illinois. Respondent, for more than one year last past has been, and still is, engaged in the wholesale grocery business, and among other things Prepares, packs, sells, and distributes a table oil which it labels "Italy nrand Table Oil." This table oil, which is a brand of olive oil and other veO'etable oils intended for use in salads, baking and other kitchen ~ses, is mixed and pr~pared by respondent in its own factory and packed in cans varying in content from one quart .to o~e gallon. The preparation is a mixture containing 15% ohve 01l anrl 85% cottonseed oil or corn oil. The olive oil which respondent lists in prl:'paring' this table oil is not produced in Italy but is produced in Spain ~nd from thence imported to the United States in FEDERAL TUADE COl\Il\IISSION DECISIONS256 Findings 23F. T.C.

barrels or drums, each barrel or drum containing 55 gallons and each individual drum being marked "Product of Spain." In manufacturing its table oil, respondent makes use of a mixing tank which will hold 366 gallons and is so labeled. 'When it is desired that a supply of the table oil be made, one drum or barrel of this Spanish olive oil is first dumped into this mixing tank. The mixing tank is then filled with either cottonseed oil or corn oil. Dy means of an electrical mixing apparatu<;; the two oils are thus blended together in the mixing tank. 'When this process is completed the oil is piped into cans and scaled. Either cottonseed oil or corn oil, but never the two together, is used with the olive oil for blending into the finished product. As thus blended, the product is known and sold to the trade as "Italy Brand Table Oil."

Respondent transports its product or causes the same to be transported from its place of busines<;; in the city of Chicago, in the State of Illinois, to the purchasers thereof located in States of the United States other than the State of Illinois, and in the District of Columbia. There has been for more than one year last past, and still is, a constant current of trade in said product sold and distributed by respondent, in commerce between and among the various States of the United States arHl in the District of Columbia. Respondent is now, and for more than one year last past has been, in substantial competition with other corporations anJ. with individuals, partner- ~hips, and firms engaged in the sale and distribution of like and similar products in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. Most of respondent's customers are of Italian nationality and extraction. 'Vhen respondent sells its product it causes, and for more than one year last past has caused, the containers in which said product is packed, sold and distributed to the consuming pub· lie, to be marked, branded, and dcsignatcll with certain descriptive advertising matter. In said ways and by said means respondent makes and has made to the general public many unfair, false and misleading statements concerning its said table oil. On the front of each container of "Italy Brand Table Oil" appear :he following printed representations:

ITALY BRAND TABLE OIL Pn Purlsslmo composto dl qulndlcl per cento d'olio dl oll\·a e ottnntn cl"fJUP. per cent d'altrl olil vegetull.

CHICAGO l\IACARONI CO. 257 2tn Findings Packed by A. Morlcl & G. Matalone Co.

Chicago, Ill.

On the back of such containers the following appears: ITALY BRAND TABLE OIL An excellent composition of fifteen per cent imported olive oil and eighty-live per cent of other vegetable oils.

Packed by A.. Morici & G. Matalone Co.

Chicago, Ill.

These labels further carry pictorial representations of several Italian medals or coins whereon are depicted persons showing Italian c·haracteristics; and decorative floral sprays similar to those found on other Italian products. Respondent also represents its product as having been packed by "A. Morici & G. 1\Iatalone Co." which company is non-existent, except as a trade name used by respondent in connection with the sale of its products. Uespondent's selection and nse of this trade name further tends to designate and characterize its "Italy Drand 'fable Oil" as a product of Italy, packed by an Italian or Italian-American concern. The manufacturer, packer, and distributor of the aforesaid "Italy Drand Table Oil" is, in fact. the Chicago .Macaroni Company, the respondent herein. PAR. 3. There are among the public many purchasers who use olive oils and table oils produced in or imported from Italy in preference ~o similar products produced in the United States, or produced in or ~imported from other foreign lands, believing that olive oil produced Jn or imported from Italy is superior in quality to that produced in any other country.

PAn. 4. The statements and representations set forth in paragraph 2 hereof have a tendency and capacity to deceive and mislead pnrc·ha~ers and prospective purchasers of said respondent's product into the belief:

• {a) That the olive oil inrrrediente of its said product was produced Jn or imported from Italv:

(b) That said A. Morici & G. Matalone Company is an Italian or Italian-American. coneern enrrarrede e in the business of importing olin 0ll from Italy.

258 FEDERAL TRADE 001\Il\IISSION DECISIONS Order 23F. T. 0, In truth and in fact, no part of said product was produced in or imported from Italy. Nor is it true, as represented, that said product is, or has been, packed by A. Morici & G. Matalone Company, the fact being that said product is, and has been, packed by the Chicago Macaroni Company, the respondent herein.

PAR. 5. There are, among the competitors of the respondent in interstate commerce, manufacturers, blenders, sellers, and distributors of olive oil, table oil, and other like and similar products who truthfully advertise and represent the merit, origin, and packing of their respective products and who do not advertise and represent that their products or any part of them were produced in or imported from Italy, when such is not the case. PAR. 6. The use of each and all of the foregoing false and misleading statements and representations by the respondent, as set out in paragraphs 2 and 3 hereof, have had and do have the tendency and capacity to mislead and deceive distributors and the purchasing public into the erroneous belief that said statements and representations are true, and have induced and do induce members of the public to purchase respondent's said product on account of such erroneous belief, to the consequent damage and injury of distributors and to the injury of the general public. Said representations have unfairly diverted trade to respondent from competitors and thereby substantial injury has been done by respondent to competition in interstate commerce.

CONCLUSION The aforesaid acts and practices of said respondent, under the conditions and circumstances described in the foregoing findings, are to the prejudice of the public and of respondent's competitors, are unfair methods of competition in commerce and constitute a violation of Section 5 of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes.'' ORDER TO CEASE AND DESIST The respondent herein having filed its answer to the complaint in this proceeding and having subsequently filed with this Commission motion that it be permitted to withdraw its said answer and that it be permitted to file in lieu thereof as a substituted answer, the draft of n proposed substituted answer annexed to the said motion, and the Commission having duly considered the said motion: CHICAGO MACARONI CO. 259 251 Order It is he1·eby ordered, That the said motion be and the same is hereby granted; that the answer be and the same is hereby withdrawn; and that the said proposed substituted answer be and the same is filed in lieu of the said answer hereby withdrawn, The said respondent in and by its said substituted answer having waived hearings on the charges set forth in the complaint in this proceeding, and having stated in its substituted answer that it does not contest the said proceeding and that it admits all of the material allegations of the complaint to be true, and that it consents that the Commission may, without further evidence and without any intervening procedure, make and enter its findings as to the facts and conclusion thereon, and issue and serve upon said respondent an order to cease and desist from the methods of competition alleged in the complaint; and the Commission having duly considered the record and being now fully advised in the premises: It is hereby further ordered, That the respondent, Chicago Macaroni Company, a corporation, trading as A. :Morici and G. l\.Iatalone Company, its officers, agents, servants, representatives and employees in the sale or offering for sale by it in interstate commerce and in the District of Columbia of its "Italy Brand Table Oil'' do forthwith cease and desist from:

Representing, directly or indirectly, through circulars, catalogs, labels or any other form of printed matter or by radio broadcasting, or in any other manner:

(a) That the olive oil ingredient of its said product was produced in or imported from Italy, until and unless said olive oil ingredient of its said product is actually produced in or imported from Italy: (b) That said A. Morici & G. Matalone Company is an Italian or Italian-American concern engaged in the business of importing olive oil from Italy:

and from making any other representations of similar tenor or import. And it is hereby further ordered, That the said respondent shall within GO days from the date of the service upon it of this order file with this Commission a report, in writing, setting forth the manner and form in which it has complied with this order. 780JSm--J9--vol.23----19 260 FEDERAL TRADE CO:Ml\IISSION DECISIONS Syllabus 23F. T. C.