Jos. Martinson & Co., Inc.

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IN THE 11ATTEH OF JOS. fARTIKSON & CO., IKC.

SEXT ORDER, ETC., IN REGARD TO THE ALLEGED VlOLATIOX OF SEC. 2 (dJ OF THE CLAYTON ACT Docket 6.169. Complaint, Nov. 1955-Decision, June 30, 1956 Consent order requiring distrihutors in ::ew York Cit;r of coffee and tea prod. ucts, with total sales in 1955 of $14 000 000, to cease making to any customer such payments as he $3 300 it made to Food Fair Stores, Inc. , of Philadelphia, Pa. , for advertising its products, unless they were made on proportionally equal terIlS to all competitors of the recipient. Before llfr. Frank Flier hearing examiner. lJ1r. Andrew O. Goodhope and Nr. FTedric T. Sg88 for the ComillSSlOll.

Phillips, Nizer, Benjamin KTirn of Kew York City, for respondent.

COMPLAINT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly described, has violated the provisions of subsection (d) of Section 2 of the Clayton Act (U. C. Title 15, Sec. 13), as amended by the Robinson-Patman Act., hereby issues its complaint., stating its charges with respect thereto as follows:

PARAGRAPH 1. R.respondent, Jos. 1artinson & Co., Inc., is a corpora.tion organized, existing and doing business under and by virtue of the laws of the State of New York, with its offee and principal place of business located at 190 Franklin Street, New York, New York. PAR. 2. Respondent is now and has been engaged in the business of producing, selling and distributing a line of coffee and tea products the principal brands of which arc sold under the trade names "Martinson Jomar" and "Aborn " In excess of 90% of respondent' products are distributed directly to reta-i grocery stores, including large retail chain store organizations, and the balance of respondent' products are sold through brokers and grocery wholesale dist.ribut.ors. Total sales made by respondent arc Sl1bstmltial, amounting to approximately $14 000 000 in the year 1955.

P AH. 3. In the course and conduct of its business, respondent has engaged in commerce, as "commerce" is defined in the Clayton Act as amended. R.respondent ships its products, or causes them to be transported, from its principal place of business in the State of New J08. M:RTIK80N & CO,) INC. 1693 1692 Decision York to customers located in the same and other States of the United States and the District of Columbia.

PAR. 4. In the course and conduct of its business in commerce respondent has paid, or contracted for the payment of, something of value to or for the benefit of some of its customers as compensation or in consideration for services or facilities furnished by or through such customers in connection with their offering for sale or sale of products sold to them by respondent, and such payments were not made available on proportionally equal terms to all other customers competing in the distribution of respondent's products. PAH. 5. For example, during the year 1955 respondent contracted to pay and did pay $3 300.00 to Food Fair Stores. Inc. , of Phil a- 'Iphia, Pennsylvania, as compensation or as an allo\vance for advertising or other service or facility furnished by or through such customer in connection with its offering for sale or sale of products sold it by the respondent. Such compensation or allowance was not offered or otherwise made available by respondent on proporbonalJy equal terms to all other customers competing with Food Fair Stores, Inc. in the sale and distribution of respondent's products. PAR. 6. The acts and practices. of the respondent, as alleged above violate subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

INITIAL DECISION BY FRANK BIER, HEARING EXAJ\IIXEH Pursuant to the provisions of subsection (d) of section 2 of the Clayton Act (15 D. C. 13), as amended by the Robinson-Patman Act, the Federal Trade Commission on K ovember 21, 1955, issued and subsequently served its complaint in this proceeding against respondent JOB. 1fartinson & Co. Inc., a corporation existing and doing business under and by virtue of the laws of the State of Kew York, with its office and principal place of business located at 190 Franklin Street New York, Kew York.

After three hearings at which considerable evidence in support of the complaint was introduced in the record, there was on l\fay 8, 1956 submitted to the undersigned IIearing Examiner an agreement between respondent and counsel supporting the complaint providing for the entry of a consent order. By the terms of said agreement, respondent admits all the jurisdictional facts alleged in the complaint and agrees that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations; agrees that the answer to respondent herein to the complaint shall be considered as having been withdrawn; waives any further proccdura1 steps before the Hearing EXHrniner and the Commission; waives the 451524--59--108 1694 FEDERAL TRADE co:vnUSSION DECISIOXS Order 52 F. T. C. making of findings of fact and conclusions of law; and waives all of the rights it may have to challenge or contest the validity of the order to cease and desist entered in accordance with this agreement. Such agreement further provides that it disposes of all of this proceeding as to all parties; tlmt-he record on which this initial decision and the decision of the Commission shall be based shall consist solely of the complaint and this agreement; that the latter shall not become a part of the offcial record unless uld until it becomes a part of the decision of the Commission; that the agreement is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint; and that the following order to cease and desist may be entered in this proceeding by the Commission ,,,without further notice to respondent, and, when so entered, it shall have the same forceancl'effect as if entered after a. fun hearing, and may be altered, modified, or set aside in the manner provided for other orders; and that the cOlnplaint may be used in construing the terms of the order.

The Heuring Examiner having considered the agreement and pro-posed order and being of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the agreement is hereby accepted, the following jurisdictional findings made and the following order issued:

1. Respondent, J os. IELrtinson &. Co., Inc., is a corporation existing and doing business under the huys of the State of New York, with its ollce and principal place of business located at 190 Franklin Street, New York, New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

UlilER It is ordered That respondent ,J os. Iart.inson &. Co., Inc., a corporation, its offcers, employees, agents and representatives, directly or through any corporate or other device, in 01' in connection ,,,ith the is definedsale of coffee and tea products in commerce, as "commerce" in the Clayton Act., as amended, do forthwith cease and desist from: :Making or contracting to make, to or for the benefit of any customer, anypaymcnt of anything of value as compensation or in consideration for any tdvertising or other service or facilities furnished by or through such customer, in connection with the handling, offering for resa.le 01' resale of products sold to him by respondent, unless uch payment is affrmatively oiIered or otherwise made available to all compet.ing customers on proportionally equal terms. JOS. MARTINSO:\ & co. , INC. 1695 1692 Decision DECISION OF THE CO DnSSION AXD ORDl' R TO FILJ. REPORT OF CO::fPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 30th day of June 1956, become the decision of the Comlnission; and, accordingly: It i8 ordered That the respondent herein shall, within sixty (60) da.ys after service upon it of this order, me with the Commission a report in writing setting forth in detail t.he manner and form in which it ha.s complied wit.h the order to cease and desist.

S'l' IPULATIONS DIG.EST OF STIPULATIONS EFFECTED MID HANDLED THROUGH THE COMMISSION'S DIVISION OF STIPU- LATIONS 02794.' Cigars-Composition, Price Reduction. Stipulation No. 02794 has been amended so that it now reads: H. Fendrich, Inc., a corporation, 101 Oakley Street, Evansville, Ind., vendor-advertiser, was engaged in selling certain cigars designated "La Fendrich. In a stipulation med and approved by the Federal Trade Commission the vendor-advertiser agreed, in connect.ion with the dissemination of future advertising, to cease and desist from representing directly or by implication:

(a) That La Fendrich cigars contain an "imported Havana-rich long finer" or from making any other representation referring to or designating the origin of the filler tobaccos of said cigars, except that as to cigars containing a substantial amount of Havana tobacco (1) the word "Havana" may be used as a part of a descriptive statement setting forth the origin of all of the liler tobaccos contained in said cigars in the order of their predominance by weight and in letters of equal size and conspicuousness or (2) such cigars may be described designated or referred to as " Blended with Havana/ provided that the words "blended with" a,re set out in immediate connection or conjunction with the \Yord "I-IavaTHL" and in letters of equal size and conspicuousness.

(b) That the price of this cigar was formerly ten cents and is now only five cents, or any other representation indicating a reduction in price unless in fact the price of the particular cigar referred to has recently been the price stated and the reduction in price has only Tecently become effective, or unless the date sneh reduction jn price was made be set forth or stated immediately in conjunction with the former price and in letters of equal size and conspicuousness or with equal emphasis.

The said II. Fendrich Inc. agrees not to publish or cause to be published any te,stimonial containing any representation contrary to the foregoing agreement.

1 Amenrlment. See 32 F. T, C. 180G.

1698 FEDERAL TRADE CO:MMISSIO ' DECISIONS It is fUTtheT stip1dated and agreed That as thus amended all of the terms and provisions of Stipulation No. 02794 shall remain in full force and effect. (1-15982, Apr. 12, 1956.

8527. Chemical Fertilizer-Unique Nature, Approval, Comparative Merits and Prices, etc, Stern s Kurseries, Inc., a Kew York corporation with its principal place of business in Geneva, N. Y., and Otto Stern an offcer thereof, engaged in the offering for sale, sale and distribution in commerce, of a chemical fert.ilizer designated "l\1iracle Gro entered into an agreement that in connection ,,,ith the offering for sale, sale and distribution of that product or any other product containing substantially the same ingredients or possessing substantially similar properties, they and each of them "ill cease and desist from representing directly or by implication:

1. That such product is a new discovery or a new development in plant nut.rition, or that it is exclusive or the only product of its kind on the market;

2. That said product has been tJ,e subject of extensive tests in leading experimental greenhouses, botanical gardens or Agricultural Ex pCl'imen t Stations;

3. That sllid product is or has been approved by Agricultural authorities;

4. Thllt said product is 1000/ plant food; 5. That the application of yIiraclc-Gro will not burn jJlants unless expressly limited to its use as directed;

6. That one pound of Miracle-Gro makes 300 pounds of liquid fertilizer or any other amount that is in excess of the actual amount of fertilizer present;

7. That one pound of :\Iiracle-Gro is equivalent to 100 pounds of other fertilizer or to any number of pounds that is contrary to the fact ;

8. That :\liracle-Gro costs less than other commercial fertilizers; 9. That said product contains all the elements necessary for the gro"\vt.h or feeding of plants;

10. That vitamins are necessary for the growth, production or feeding of plants;

11. That the application of YIiracle-Gro wil cause plants to grow under any circumstances other than a lack of fertilizer; 12. That other fertilizcrs or plant foods will not produce as satisfactory results as Thlirac1e-Gro.

cancels and It i.s furthe,. agreed That this substitute stipulation supcrsedes Stipulation No. 8527 approved by the Federal Trade Commission on February 2, 1954.

In this substitute stipulation provisions 1, 2, 3 and 4, together with the pertinent claims and recitations, have been incorporated without Substitute stipulation. See 50 F. '1'. C. 1159 IPULATIOl' S 1699 cha.nge from Stipulation No. 8527; and provisions 5 , 6, 7 and 8 arc revisions of provisions 4 and 6 of saiclStipulation No. 8527. The stipulation provides that the agreement is for settlement purposes only and does not constitute an admission by Stern s Xurseries, Inc. andOUo Stern that they have engaged in any method act or pradice violative of Jaw. (5220003, June 26, 1956. 854. " Margarine-Nature as Dairy Product.-Stipulation K o. 8545 has been amended so that it now reads:

Safe\'I' ay Stores, Inc. and Salem Commollitie. , Inc. , a subsidiary of Safeway Stores, Inc. and operating under the name of Cold stream Products Co., are :\faryJand corporations, with their principal offces and places of business Jocated in Oakland, Calif. Safeway Stores Inc. and Salem COlnmodities, engaged in the business of 'advertising, offering for sale and selling in COITne.rce, an oleomargarine desig nated "Sunny bank :Margarine " entered into an agreement that each of them, will cease and desist from disseminating or causing to be disseminated any advertisement for oleomargarine in which: (a) Any statement, word, grade, designation, design, device, symbol, sound, or any combination thereof is used which represents or suggests that said product is a dairy product provided, however that nothing contained in this agreement shall prevent Safeway Stores, Inc. and Salem Commodities, Inc., or either of them, frOlu the use in advertisements of a truthful, accurate and full statement of a11 of the ingredients contained in said product 01' of a truthful statement that said product contains milk or any other dairy product provided the percentage thereof contained is clearly and conspicnously set forth.

It i8 further stipulated and agreed That as thus amended a11 of the terms and provisions of Stipulation o. 8545 shall remain in full force ano effect. ( 5420341, Nov. 8, J 055. 854-5. Margarine-Nature as Dairy Product.- Stipulation o. 8545 has been further amended so that it nmv reads: Safeway Store. , Inc. and Salem Commodities, Inc., a subsidiary of Safeway Stores, Inc. and operating under the name of Cold stream Products Co., are ::faryland corporations, with their principal offces and pJaees of business Jocated in Oaklano, Calif. Safeway Stores Inc. and Salem Commodities, Inc., engaged in the business of advertising, offering for sale and selling in commerce, an oleomargarine designated "Sunnybank lHargal'ine " entered into an agreement that each of them, \viii cease and desist from disseminating or causing to be disseminated any advertisement for oleomargarine in whjcll: (a) Any statement, word, grade designation, design, device, symbol, sound, or any combination thereof is used \\Thich represents or 3 Amendment. See 51 F. T. C. 1420, 4 FurtJJel' amcnclment, See 51 F. T. C. 1426 and amendment in this yolumc above, imml'1iateJy preceding.

1700 FEDERAL TRADE COMMISSION DECISI01\' suggests that said product is a dairy product; provided however, that nothing contained in this agreement shall prevent Safeway Stores Inc. and Salem Commodities, Inc., or either of them, from the use in advertisements of a truthful, accurate and full statement of all of the ingredients contained in said prod net. It is fu,.that stipulated and ag1'eed That as thus amended all of the terms and provisions of Stipulation No. 8545 shall remain in full force and effect. (5420341 Apr. 24, 1956.

8645. Liquid Fertilizer-Results, Uuique Nature, Relevant Facts, etc. "Na-Chnrs" Pl,mt Food Co., an Ohio corporation, with its place of business in 1arion, Ohio, engaged in the business of offering for sale selling and distributing in commerce, a fertilizer in liquid form designated ":Ka-Churs' Liquid Fertilizer ' entered into an agreement that in connection with the offering for sale, sale and distribution of that product or any other product of substantia1Jy the same composition it will cease and desist from representing directly or by implication: 1. Through use of the term " results guaranteed" or otherwise, that tho product will assure an increase in the growth or yield of plants regardless of other factors or conditions;

2. That the product is more effective than any other fertilizer; 3. That the nutrients of the product are absorbed faster and more effciently through the leaves than through the roots, or that leaf feeding is superior to root feeding;

4. That all the ingredients are absorbed when the product is applied on foliage, or that the foliage of a11 plants effectively absorbs the prod uct.

5. That the product is a new plant food or is subslRntial1y different from other liquid fertilizers on the market; 6. That the product will not burn plants unless expressly limited to its nse as directed. (5420652, J nly 8, 1955. 8646. Sulphur Soap-Therapeutic Properties. Kay Preparations Co. Inc., a N c"\v York corporation, with its principal place of business located in New York . Y., engaged in the business of offering for sale and selling in commerce, preparations designated "Kay Genuine Colloidal Sulphnr Soap" Rlso known as "Kay 301 Soap with Gennine theColloidal Sulphur" and "Kay Formula 301 Clear- Skin Lotion" combination of the two preparations being designated "I\:ay 301 entered into an agreement that it will cease and desist from disseminating or causing to be disseminated, any advertisement for those medicinal preparations or any other preparations of substa,ntial1y the same compositions or possessing sllbstantial1y the same properties whether sold under those names or any ot.her names, which represents directly or by implication: