Paramount Distillers, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER 01'' PARAMOUNT DISTILLERS, INC.

COMPLAINT AND ORDER IN REGARD TO THE ALLEGED VIOLATION m' SEC. IS OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2453. Complaint, Julie 21, 19.35-0rdcl', Ja-n. 30, 1937 Consent order requiring respondent, its officers, etc., in connection wJ.th sale or otl.'er, in Interstate commerce and in the Dlstrlct of Columbia, of whiskies, gins, and other alcoholic beverages produced by it, but excepting gins produced by it through process of rectification whereby alcohol purchased, but not produced, by it is redistilled, as specified, to cease and desist from representing, through use of word "Distillers" In its corporate name and on its sta· tionery, advertising, etc., or in any other way, that It is a distiller of whiskies, gins, and other alcoholic beverages, or that said whiskies, etc., were by It made through process of distillation, or that it owns, operates, or controls a place where such products are thus made, unless and until it shall own, oper· ate, or control a place or places where such products are by it manufactured through process of original and continuous distillation from mash, wort, or wash, through continuous closed pipes and vessels until manufacture is complete.

Before Mr. John lV. Bennett, trial examiner. Mr. PGad B. Morehouse for the Commission.

Cooke & Beneman, of ·washington, D. C., for re!;pondent. COMPLAINT Pursuant to the provisions of an Act of Congress approv~>d Septem· ber 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that Paramount Distillers, Inc., hereinafter referred to as respondent, has been and is using unfair methods of competition in commerce, as "commerce" is defined in s~id act, and it appearing to the said Commission that a proceeding Ly it in respect thereof would be in the public interest, hereby issue!'~ its com· plaint, stating its charges in that respect as follows: PAnAonArH 1. Respondent is a corporation organized, existing and doing business under the laws of the State of Ohio, with its principal office and place of business in the city of Cleveland, in said State. It is now, and for more than one year last past has been, engaged in the business of purchasing, rectifying, blending, and bottling whiskies, gins, and other alcoholic bevemges and in the sale thereof in constant course of trade and commerce between and among 'the various States of the United States and in the Di!'itrict of Columbia. In the course PARAMOUNT DISTILLER.'3, INC. 587 :ti8(l Complaint :and conduct of its said business it causes its said products when sold to be transported from its place of business aforesaid into and through various States of the United States to the purchasers thereof, consisting <>f wholesalers and retailers located in other States of the United States and the District of Columbia. In the course and conduct of its business as aforesaid, 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 manufacture by distillation of whiskies, gins, and other alcoholic beverages and in the sale thereof in trade and commerce between and among the various States of the United States and in the District of Columbia; and in the course and conduct of its business as aforesaid, respondent is now, and for more than one year last past has been, in substantial competition with other corporations and with individuals, firms, and partnerships engaged in the business of purchasing, rectifying, blending, and bottling whiskies, gins, and other alcoholic beverages and in the sale thereof in commerce between and among the various States of the United States and in the District of Columbia. PAR. 2. In the course and conduct of. its business as aforesaid, respondent has upon its said premises a still which it uses in the Production of gin by a process of rectification, whereby alcohol pur- <:based but not produced by respondent is redistilled over juniper berries and other aromatics. Such rectification of alcoholic spirits does not make or constitute respondent a distiller as defined by Seetion 3247 of the Revised Statutes regulating Internal Revenue, nor as commonly understood by the public or the liquor industry. For a long period of time the word "Distillers" when used in connection With the liquor industry and the products thereof has had and still has a definite significance and meaning to the minds of the wholesalers and retailers in such industry and to the ultimate purchasing public, to wit, those who manufacture such liquors by the process of original and continuous distillation from mash, wort, or wash, through continuous closed pipes and vessels until the manufacture thereof is completed; and a substantial portion of the purchasing public prefers to buy spirituous liquors prepared and bottled by distillers. PAR. 3. In the course and conduct of its business as aforesaid, by the use of the word "Distillers" in its corporate name, printed on its stationery and advertising, and on the labels attached to the bottles in which it sells and ships its said products, and in various other Ways, respondent represents to its customers and furnishes them with the means of representing to their vendees, both retailers and the ultimate consuming public, that respondent is a distiller, and that the whiskif's, ~ins, and other alcoholic hen-rages thf'rein contained 588 FEDERAL TRADE COMMlSS!ON DECISIONS Complaint 24 F. T. C. were by it manufactured through the process of distillation from mash, wort, or wash, as aforesaid, when, as a matter of fact, respondent is not a distiller, does not distill the said whiskies, gins, and other alcoholic beverages by it so bottled, labeled, sold and transported, and merely by the use of a still operated by it as aforesaid in the rectification of alcoholic spirits by redistillation over juniper berries and other aromatics does not distill the gins by it so bottled, labeled, sold, and transported. in the sense in which the word "distilled" is commonly accepted and understood by those engaged in the liquor trade and the public. Respondent does not own, operate, or control any place or places where such beverages are manufactured by the process of distillation from mash, wort, or wash. PAn. 4. There are among the competitors of respondent engaged in the sale of spirituous beverages, as mentioned in paragraph 1 hereof, corporations, firms, partnerships, and individuals who manufacture and distill from mash, wort, or wash, as aforesaid, whiskies, gins, and other spirituous beverages sold by them and who truthfully use the words "distillery" "d.istilleries " "distillers " or "distillin(J'" as a part of their corporate' or trade names' and on' their stationery1:> and ad.vertising, and on the labels of the bottler in which they sell and ship such products. There are also among such competitors corporations, firms, partnerships, and individ.uals engaged in the business of purchasing, rectifying, blend.ing, bottling and. selling whiskies, gins, and. other alcoholic beverages who do not use the words "distillery," "d.istilleries," "distilling," or "distillers" as a part of their corporate or trade names, nor on their stationery or advertising, nor on the labels attached. to the bottles in which they sell and ship their said products.

PAn. 5. Representation by respondent, as set forth in paragraph 3 hereof, is calculated to and has the capacity and tendency to and does mislead and deceive dealers and the purchasing public into the beliefs that respondent is a distiller and that the whiskies, gins, and. other alcoholic beverages sold by the responuent are manufacturpJ and distilled by it from mash, wort, or wash, as aforesaid, and is calculated to and has the capacity and tendency to and does induce dealers and the purchasing public acting in such beliefs, to purchase the whiskies, gins, and. other alcoholic beverages bottled and. sold by the respondent, thereby diverting trade to respondent from its competitors who do not by their corporate or trade names or in any other manner misrepresent that they are manufacturers by distillation from mash, wort, or wash, of such products, and thereby respondent !loes substantial injury to substantial competition in interstate commerce. PARAl\IOUXT DISTILLERS, INC. 589 58(1 Order PAn. 6. The acts and things above alleged to have been done and the false representations alleged to have been made by respondent are to the prejudice of the public and the competitors of respondent and con- .stitute unfair methods of competition in commerce within the intent and meaning of Sect.icn 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. ORDER TO CEASE AND DESIST This proceeding having come on to be heard by the Federal Trade Commission upon the complaint hereinbefore issued and served upon Paramount Distillers, Inc., respondent herein, and the said respondent's written answer made thereto, waiving the taking of testimony, ?ndings as to the fact, filing of briefs, oral argument and all other Intervening procedure, and consenting that an order shall issue herein for it to cease and desist from methods of competition charged in the colllpluint, awl the Commission being fully advised in the premises, having thereupon conclwled that respondent has violatell Section 5 of an Act of Congress approved September 2G, 1914, entitled, ''An .A.ct to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

. It is now ordered, That the respondent, Paramount DistiUers, Inc., lts officers, representatives, agents, and employees, in connection with ~he sale, offering for sale, and distribution in interstate commerce and ln the District of Columbia of whiskies, gins, and all other alcoholic b.evPrages, except gins by it produced through a process of rectification whereby alcohol purchased but not prolluced by respondent is redistilled over juniper berries and other aromatics, do cease and desist from:

Reprl'sl'ntin~, through the use of the word "Distill<>rs," in its cor- }:lorate name, on its stationery, advertising, or on the labels attached to the bottles in which it sells and ships its said products, or in any other "'ay by word or wonls of like import, that: (a) It is a distiller of "'.hiskies, ~ins, and other alcoholic beverngcs; or (b) The said whislnes, gins, and other alcoholic beverages WIO're by it manufactured through the process of distillation; or (c) It owns, operates, or controis a place or places where such beverages are manufactured by the process of distillation, unless and until the said respondent shall own, operate, or control a place or places where such whiskies, gins llncl other alcoholic beverages are by it manufactured through a r>rocess of original and continuous distillation from mash, wort, or 1467!lll'" 39 vol. 2·1 40 DECI~IONS.590 :FEDERAL TRADE COMMISSION Order 2-l F. '1'. C. wash, through continuous closed pipes and wssels until the manu· facture thereof is completed.

It is further ordered, That the said respondent within 60 days from and after the date of the service upon ·it of this order, shall file with. the Commission a report or reports in writing setting forth in detail the manner and form in which it is complying and has complied with the order to cease and desist hereinabove set forth. HERCULES PRODUCTS & DISTILLING CORP. 591 Syllabus