Fisher Nut and Chocolate Co

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IN THE :MA'ITER OF FISHER NUT AND CHOCOLATE COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 6 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 4594. Complaint, Sept. 25, 1941-Decision, July 7, 1943 Where a corporation, engaged in the manufacture and competitive Interstate sale and distribution of assortments of candy and nut products so packed and assembled as to involve the use of games of chance ln retail sale thereof, a typical assortment consisting of several tins of salted peanuts and a punch· board for use in their sale and distribution to consumers nuder a plan by which chance selection of certain numbers entitled purchaser, for the 2 cents paid, to a tin of peanuts, value of which was in excess thereof, and purchaser of last punch in each of the six sections into which board was divided received a tin, others recelvlng'nothing for their money- Sold to wholesalers such assortments, and thereby supplied to and placed ln the hands of retail purchasers, who exposed and sold same to purchasing public, in accordance with aforesaid plan, the means of conducting lotteries in the sale and distribution of its said products, contrary to an established public policy of the Unit~d States Government, and In competition with many who refr~in from use of any such method ;

With result that many person!! were attracted by Its said plan and the element of Chllnce involved therein, and were thereby induced to buy and sell its said products ln preference to those of Its aforesaid competitors; and with capac- Ity and tendency thereby unfairly to divert trade in commerce to lt from them:

Held, That such acts and practices, under the circumstances set forth, were all to the prejudice and Injury of the public and competitors, and constituted unfair mf:lthods of competition in commerce, and unfair acts and practices therein.

Before Mr. John lV. Addison, trial examiner. Mr. J. W. Brookfield, Jr. for the Commission Weinstein & /{line, of :Milwaukee, Wis., for respondent. 2 FEDERAL TRADE COMMISSION DECISJONS Complaint 37F.T.C.

Complaint Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act,·the Federal Trade Commission, having reason to believe that Fisher Nut and Chocolate Co., a corporation, hereinafter referred to as respondent, has violated the provisions of said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the interest of the public, hereby issues its complaint stating its charges in that respect as follows:

PAR..4.GRAPH 1. Respondent, Fisher Nut and Chocolate Co., is a corporation, organized and doing business under. and by virtue of the laws of the State of Minnesota with its office and principal place of business located at 2327 Wycliff Street, St. Paul, Minn. Respondent is now and for more than 6 months last past has been engaged in the manufacture o£ candy and nut products and in the sale and distribution thereof to wholesale dealers, jobbers, and retail dealers located . at points in the various States of the United States and in the District of Columbia. Respondent causes and has caused said products, when 1wld, to be transported from its aforesaid principal place o£ business in the city of St. Paul, Minn., to purchasers thereof at their respective points of location in various States of the United States other than Minnesota and in the District of Coll!mbia. There is now, and has been for more than 6 months last past, a course of trade by respondents in such candy and nut products in commerce between and among the various States of the United States and in the District of Columbia. ~ 'i . i In the course and conduct of said business respondent is and has oeen in competition with other corporations and with partqerships and individuals engaged in the sale and distribution of candy and nut products 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 described in paragraph 1 hereof, respondent sells 1;1nd has sold to wholesale dealers, jobbers, and retail dealers certain assortments of candy and nut products so packed and assembled as to involve the use of games of chance, gift enterprizes, or lottery schemes when sold and distributed to the consumer thereof. One of said assortments is hereinafter described for the purpose of showing the method used by respondent, and is as follows: . · This assortment includes several tins of salted peanuts and a punch board. Appearing on the face ot the punch board is the following inscription:

FISHER NUT AND CHOCOLATE CO. 3 1 Complaint FISHER'S VACUUM FRESH 2¢ per sale Numbers 10, 20, 30, 110, 120, 130,,210 220, 230, 310, 320, 330 Each Receive (Depletion 8 oz. Vacuum Pack o:t can ot FISHEH'S PARTY PACK peanuts) Numbers 15, 25, 35, 115, 125, 135, 215 225, 235, 315, 325, 335 Each Receive 8 oz. Vacuum Pack "SALTED IN THE SHELL" PEANUTS LAST SALE IN EACH SECTION REC'S 8 oz. Vacuum Pack "S:ALTED IN THE SHELL" PEANUTS Said peanuts are distributed to the purchasing public by means of said punch board in the following manner: Sales are 2 cents each, and when a purchase is made, a number is disclosed. The numbers begin with one and continue to the number of punches there are on the board, but the numbers are not arranged in numerical sequence and said numbers a~e arranged in 6 sections. The board bears a statement informing purchasers and prospective purchasers that said specified numbers entitle the purchaser thereof to receive a can of peanuts, and the last sale in each of the sections completely sold entitles the purchaser to receive a can of peanuts. A purchaser who does not qualify by obtaining one of the specified numbers or the last punch in a section receives nothing for his money. The peanuts are worth more than 2 cents a can, and the purchaser who obtains a number calling for a can' of peanuts receives the same for 2 cents. The numbers are effectively concealed from purchasers and prospective purchasers until a purchase or selection has been made and the particular punch separated from the board. The peanuts are thus distributed to members of the purchasing public wholly by lot or chance. The respondent furnishes and has furnished various punch boards and push cards for use in the sale and distribution of its candy and other products by means of a game of chance, gift enterprise or lottery scheme. Such punch boards and push cards are similar to the one herein described and vary only in detail. PAR. 3. Retail dealers who purchase respondent's candy and nut Products, directly or indirectly, expose and sell the same to the pur~ chasing public in accordance with the sales plan aforesaid. Respondent thus supplies to, and places in the hands of, others the means ?f conducting lotteries in the sale and distribution of its products 1n accordance with the sales plan or method hereinabove set forth. FEDERAL ·TRADE COMMISSION DECISIONS4 Findings 37F.T.C.

·The use by respondent of said sales plan or method in the sale of its -candy and nut products and the sale of said <;andy and nut products by .and through the use thereof, and by the aid of said sales plan or method, is a practice of a sort which is contrary to an established ;public policy of the Government of the United States. PAR. 4. The sale of candy and nut products to the piuchasing public by the method or plan hereinabove set forth involves n game of ·chance or the sale of a chance to procure candy and nut products at prices much less than the normal retail price thereof. Many persons, firms, and corporations who sell and distribute candy and nut products in competition with respondent as above alleged do not use said method -or any method involving a game of chance or the sale of a chance to win something by chance or any other method contrary to public policy and such competitors refrain therefrom. Many persons are attracted by said sales plan or method employed by respondent in the sale and distribution of its candy and nut products and in the element of chance involved therein and are thereoy induced to buy and sell respondent's .candy and nut products in preference to candy and nut products of said competitors of respondent who do not use the same or equivalent methods. The use of said method by respondent because of said game of chance has a tendency and capacity to unfairly divert trade in commerce between and among the various States of the United States and in the District of Columbia to respondent from its said competitors who do not use the same or equivalent method, and as a result thereof substantial injury is being and has been done. by respondent to competition in commerce between and among the various States of the United States and in the District of Columbia. P .AR. 5. The aforesaid acts and practices of respondent, as herein alleged, are all to the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition in commercii and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. REPORT, FINDINGS AS TO THE FACTs, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on September 25, 1941, issued and subsequently served its complaint in this proceeding on the respondent, Fisher Nut and Chocolate Co., a corporation, charging it with the use of unfair methods of competition in commerce and unfair acts and practices in commerce in violation of the provisions of said act. After the issuance of said complaint and the filing of respondent's answer thereto, testimony and other evidence in support of, and in opposition to, the allegations of said complaint were introduced before a trial FISHER NlJT AND CHOCOLATE CO.

1 Findings examiner of the Commission theretofore duly designated by it, and saiu testimony and other evidence were duly recorded and filed .in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission upon said complaint, testimony, anu other evidence, report of the trial examiner upon the evidence, and briefs filed in support of the complaint and in opposition thereto (oral argument not having been requested) ; and the Commission, having duly considered the matter and being now fully advised in the premises, finds that this proceeding is in the interest of the public and. makes this its findings as to the facts and its conclusion drawn therefrom. . FINDISGS AS TO THE FACTS PARAGRAPH 1. Respondent, Fisher Nut and Chocolate Co., is a corporation, organized and doing business under and by virtue of the Jaws of the State of Minnesota, with its office and principal place of business located at 2327 Wycliff Street, St. Paul, Minn. Respondent is now, and for more than 1 year last past has been, engaged in the manufacture of candy and nut products and in the sale and distribution thereof to wholesale dealers and jobbers located in the various States. of the United States. Respondent causes, and has caused, said products, when sold, to be transported from its aforesaid principal place· of business in the dty of St. Paul, 1\finn., to purchasers thereof at their respective points of location in various States of the United States. other than Minnesota. Respondent maintains, and at all times mentioned herein has maintained, a course of trade in such candy and nut Products in commerce between and among the various States of the United States.

In the course and conduct of said business, respondent is, and has been, in competiton with other corporations and with partnerships: and individuals engaged in the sale and distribution of candy and nut Products 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, respondent sells,. and has sold, to wholesale dealers and jobbers certain assortments of' candy and nut products so packed and assembled as to involve the use of games of chance, gift enterprises, or lottery schemes when sold and distributed to the consumer thereof. One of said assortments is hereinafter described for the purpose of showing the method used by respondent, and is as follows:

Findings 37F.T.C.

This assortment includes several tins of salted peanuts and a punch board. Appearing on the face of the punch board is the following inscription:

FISHER'S VACUUM FRESH 2¢ per sale Numbers 10, 20, 30, 110, 120, 130, 210 220, 230, 310, 320, 330 Each Receive (Depletion 8 oz. Vacuum Pack ot can ot FISHER'S PARTY PACK peanuts) Numbers 15, 25, 35, 115, 125, 135, 215, 225, 235, 315, 325, 335 Each Receive 8 oz. Vacuum Pack "SALTED IN THE SHELL" PEANUTS LAST SALE IN EACH SECTION REO'S 8 oz. Vacuum Pack "SALTED IN THE SHELL" PEANUTS Said peanuts are distributed to the purchasing public by means of Eaid punch bo~rd in the following manner: Sales are 2 · cents each, and when a purchase is made, a number is disclosed. The numbers begin with one and continue to the number of punches there are on the board, but the numbers are not arranged in numerical sequence and said numbers are arranged in 6 sections. The board bears a statement informing purchasers and prospective purchasers that said specified numbers entitle the purchaser thereof to receive a can of peanuts, and the last sale in each of the sections completely sold entitles the· purchaser to receive a can of peanuts. A purchaser who does not qualify by obtaining one of the specified numbers or the last punch in a section receives nothing for his money. The peanuts are worth more than 2 cents a can, and the purchaser who obtains a number calling for a can of peanuts receives the same for 2 cents. The num· bers are effectively concealed from purchasers and prospective pur· chasers until a purchase or selection has been made and the particulai.' punch separated from the board. The peanuts are thus distributed to members of the purchasing public wholly by lot or chance. The respondent manufactures, sells, and distributes various assort· ments of candy and nut products involving a lot or chance feature, hut such assortments and the method of sale and distribution thereof are similar to the one herein described, and vary only in detail. FISHER NUT AND CHOCOLATE CO. 7 1 Order PAR. 3. Retail dealers who purchase respondent's candy and nut products expose and sell the same to the purchasing public in ac~ ~ordance with the sales plan hereinbefore described. Respondent thus supplies to, and places in the hands of, others the means of conducting lotteries in the sale and distribution of its products in accordance with the sales plan or method hereinabove set forth. The. use by respondent of said sales plan or method in the sale of its candy and nut products and the sale of said candy and nut products by and through the use thereof, ·and by the aid of said sales plan or method, is a practice of a sort which is contrary to an established public policy of the Government of the United States.

PAR. 4. The sale of candy ahd nut products to the purchasing public by the method or plan hereinabove set forth involves a game of chance or the sale of a chance to procure candy and nut products at prices much less than the normal retail price thereof. Many persons, firms, and corporations who sell and distribute candy and nut products in competition with respondent as above described do not use said method or any method involving a game of chance or the sale of a chance to win something by chance or any other method contrary to public policy and such competitors refrain therefrom. l\Iany persons are attracted by said sales plan or method employed by respondent in the sale and distribution of its candy and nut products and in the element of chance involved therein and are thereby induced to buy and sell said candy and nut products so packed and sold by the respondent in preference to candy and nut products of said competitors of respondent who do not use the same or equivalent methods. The use of said method by respondent, because of said game of chance, has a tendency and capacity to 'unfairly divert trade in commerce between and among the vn,rious States of the United States to respond(lnt from its said competitors who do not use the same or equivalent method.

CONCLUSION The aforesaid acts and practices of respondent, as herein found, are all to the prejudice and injury of the public and of respondent's competitors and constitute unfair methods of competition in commerce and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act. ORDER TO CEASE AND DESIST .T~is proceeding having been heard by the Federal Trade Comll:usslOn upon the complaint of the Commission, answer of the re- Order 37F. T. C.

spondent, testimony and other evidence taken before a trial examiner of the Commission theretofore auly designated by it, in support of the allegations of said complaint and in opposition thereto, report of the trial examiner upon the evidence, and briefs filed in support of the complaint and in opposition thereto; and the Commission having made its findings as to the facts and its conc.lusion that said respondent, Fisher Nut and Chocolate Co., a corporation, has violated the provisions of the Federal Trade Commission Act. It i.g ordered, That the respondent, Fisher Nut·and Chocolate Co., a corporation, its officers, represontatives, agents, and employees, directly or through any corporate or other device in connection with the offering for sale, sale, and distribution of candy and nut products or other merchandise in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: 1. Selling or distributing candy, nut products, or any other merchandise so packed or assembled that sales of said merchandise to the public are to be made or, due to the manner in which such candy, nut products, or other merchandise is packed or assembled at tho time it is sold by respondent, may be. made by means of a game of chance, gift enterprise, or lottery scheme. 2, Supplying to, or placing in the ~ands of, others, push or pull cards, punch boards, or other lottery devices, either with assortments of candy, nut pr9ducts, or other merchandise or separately, which said push or pull cards, punch boards, or other lottery devices are to be used or may be used in selling or distributing said candy, nut products, or other merchandise to the public. 3. Selling or otherwise disposing of any merchandise by means of a game of chance, gift enterprise, or lottery scheme. It is further ordered, That the respondent shall, within 60 days after service upon it of this order, file with. the Commission a report in writing, setting forth in detail the manner and form in which it has complied with this order. · LEKAS AND DRIVAS,. INC. 9 Syllabus ·