Angus Freezer Meats, Inc.

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IN THE MATTER OF AKGUS FREEZER MEATS, INC., TRADING AS BLACK ANGt:S FREEZER MEA TS ET AL.

ORDER, ETC., IN REGARD TO THE ALLEGED VIOLA'I'ION OF THE FEDERAL TRADE COI.LVIISSIO'J ACT DGcket 8720. Complaint, N01J. 4, 1966-Decision, Peb. , 1967 Order requiring three affJiatcd meat dealers of Washington, D. ) IJhiladelphia, Pa., and Norfolk, Va. , to cease using bait advertising, misrepresenting the grade aed quality of their meat, falsely representing that their products are graded by the United States Department of Agriculture, and :making other deceptive claims. 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 Angus Freezer :Meats, Inc. , a corpora ion trading as Black Angus Freezet rvreats; Steakland Freezer l\leats, Inc. , a corporation; Black Angus Freezer lVfeats of Virginia, Inc., a corporation; and David W. Ewing, individually and as an offcer of said corporations; hereinafter referred to as respondents, have violded the provisions of said Act, and it appearing to the 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 ::lS follmvs:

PARAGRAPH 1. Respondent Angus Freezer :Yleats, Inc., is a corporation organh;ed, existing and doing business under and by virtue of the laws of the District of Columbia, with its principal offce and place of business located at 513 :VIorse Street, NE. , in the city of Washington, District of Columbia, where it trades and does business as Black Angus Freezer Meats. Respondent Steaklanu Freezer :Vleats, Inc. , is " corporation organized, existing and doing business under and by virtue of the laws of the State of Pennsylvania, with its principal offce and place of business located at 6228 Bustleton Avenue, in the city of Philadelphia, State of Pennsylvania.

Respondent Black Angus Freezer J\1eats of Virginia, Inc" is a corporation organized, existing and doing business under and by virtue of the laws of the State of Virginia, with its principal oflce and place of business located at 151 East Little Crcek Road in the city of Norfolk, State of Virginia. BLACK ANGUS FREEZER MEATS ET AL. 171 170 Complaint Respondent David W. Ewirlg is an individual and an offcer of the said corporate respondents. He formulates, directs and controls the acts and practices of the said corporate respondents including the acts and practices hereinafter set forth. His principal offce and place of business is located at 6228 Bustleton Avenue in the city of Philadelphia, State of Pennsylvania. PAR. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of beef and other meat products which come within the classification of food as the term "food" is defined in the Federal Trade Commission Act to members of the purchasing public. PAR. 3. In the course and conduct of their business, respondents have disseminated and caused the dissemination of certain advertisements by the United States mails and by various means in commerce as "commerce" is defined in the Federal Trade Commission Act, including advertisements in daily newspapers, for the purpose of inducing, and which were likely to induce, directly or indirectly, the purchase of food, as the term "food" is defirled in the Federal Trade Commission Act; and have disseminated and caused the dissemination of a dvert.sements by various means, including those aforesaid, for the purpose of inducing, and which were likely to induce, directly or indirectly, the purchase of food in commerce, as "commerce" is defined in the Federal Trade Commission Act.

PAR. 4. Typical of the statements appearing in the newspaper adverti ements disseminated as aforesaid are the followi!1g: (The Washington Post, 10- 65) (Depiction of a Black Steers Black Angus ' Fancy Beef Sides lb. with volume orders.

IOWA BEEF Of * 0; Have your meat cut and wrapped at your convenience. Black Angus Fancy Hindquarters with Steak and Roast Sections c+ 0; '" 36 lb. "1,\ith volume orders.

Black Angus F:rcezer Meats (Washington Daily News, 7- 65) Black Angus ' Special. COl'.sisis of potentially sirloin, T -bone, round, club steak, :roasts, porte:rhousc, etc. 29G lb. lls. A. Choice Hindquarters with roast sections 49( lb. Special- Beef Orders lb. and up. Black Angus Freezl:r Meats (The Philadelphia Inquirer, 8-19-65) Western BEEF Round-up. A cal'loacl of top quality beef. Guaranteed tender, delirious beef h2.ives, includes all top cuts of steaks and roasts 172 FEDERAL TRADE COMMISSIO DECISIONS Complaint 71 F.

291 lb. Example: 300 lbs. only $6. 69 a week for 13 weeks. 2 Convenient locations.

Steakland Freezer Meats (The Virginian-Pilot, 11-12-65) Black Angus" Beef Sale- (depiction of Black Steers-29C lb. Western Fed Beef Sides including all Steaks, Roasts & Cuts. V. A. Choice beef orders 100 lb8. and up 33e lb. Black Angus Freezcr Meats PAR. 5. Through the use of the aforesaid advertisements and others of similar import and meaning not specifically set out herein, respondents have represented, directly and by implication:

1. That the offer to sell beef at 29, 31 , and 33 cents per pound is a bona fide offer to sell such merchandise at these prices. 2. That the beef offered at the prices aforesaid is top quality beef and that it has been graded as "choice" by the United States Department of Agriculture 3. That the beef offered at the prices aforesaid consists primarily of sirloin, T -bone, porterhouse, roasts and other top quality cuts of beef.

4. That the beef offered in said advertisements comes entirely 01' primarily from the breed of cattle known as Black Angus. 5. That the beef offered in said advertisements wil be cut and wrapped at the purchaser s convenience.

PAR. 6. In truth and in fact:

1. The offer to sell beef at 29, 31 and 33 cents per pound is not a bona fide offer but, on the contrary, is made for the purpose of inducing the public to come to respondents ' places of business. \Vhen customers respond and go to said places of business, respondents' employees and representatives point out to said customers that there ,viii be an excessive weight loss in trimming and cutting said beef and otherwise disparage the beef offered at the prices aforesaid and attempt to, and usually do, sell beef at higher prices to said customers.

2. The beef offered at 29, 31 and 33 cents per pound is not choice" or top quality beef and it has not been so graded by the United States Department of Agriculture. 3. The beef offered at the prices aforesaid does not consist primarily of sirloin, T-bone, roasts, porterhouse and other top quality cuts of beef.

4. The beef offered in said advertisements does not come en- , BLACK ANGUS FREEZER MEATS ET AL. 173 170 Initial Decision tirely or primarily from the breed of cattle known as Black Angus 5. The beef offered in said advertisements is not, in many instances, cut and wrapped at the purchaser s convenience; on the contrary, it is cut and wrapped at respondents' convenience. Therefore, the advertisements referred to in Paragraph Five were, and are, misleading in material respects and constituted and now constitute false advertisements" as that term is defined in the Federal Trade Commission Act. PAR. 7. The dissemination by respondents of the false advertisements, as aforesaid, constituted and now constitutes, unfair and deceptive acts and practices in commerce in violation of Sections 5 and 12 of the Federal Trade Commission Act. Mr. William Hill supporting the complaint. Mr. Samuel Kmvitz Philadelphia, Pa. , for respondents. INITIAL DECISION BY WILLIAM K. JACKSON, HEARING EXAMINER JANUARY 6 , 1967 This proceeding was commenced by the issuance of a complaint on Kovember 4 , 1966, charging the corporate respondents and David W. Ewing, individually and s an officer of said corporations, with unfair and deceptive acts and practices in commerce in violation of Sections 5 and 12 of the Federal Trade Commission Act, by using bait advertising, by misrepresenting the grade and quality of their beef, and by making other false claims concerning their meat products.

After being served with the said complaint, the corporate respondents and the individual respondent appeared by counsel and filed their joint answer on December 2 , 1966. In their answer they admitted a number of the specific allegations in the complaint, but denied generally the ilegality of the practices set forth in the complaint.

On December 14 , 1966, respondents by their attorney filed a Motion to Withdraw Answer to Complaint and requested leave to file Substituted Answer. In their Substituted Answer respondents set forth that they did not elect to deny or to challenge the averments contained in the complaint, that they waived any further proceedings and that they agreed that the order attached to the complaint be entered in this matter. This motion was unopposed by complaint counsel. On January 3, 1967, the hearing Initial Decision 71 F. examiner issued an order permitting respondents to withdraw their previous answer and to file in lieu thereof their Substituted Answer, dated December 14, 1966.

Based upon the entire record consisting of the complaint, Substituted Answer, and other matters of record, the hearing examiner makes the following findings as to facts, conclusions drawn therefrom, and order:

FINDINGS OF FACT 1. Respondent Angus Freezel- Meats, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the District of Columbia, with its principal offce and place of business located at 513 Morse Street, KE., in the city of Washington, District of Columbia, where it trades and does business as Black Angus Freezer Meats.

Respondent Steakland Freezer Meats, Inc., is a corporation organized, existi!1g and doing business under and by virtue of the laws of the State of Pennsylvania, with its principal offce and place of business located at 6228 Bustleton Avenue, in the city of Philadelphia, State of Pennsylvania.

Respondent Bl2ck Angus Freezer Meats of Virginia, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Virginia, with its principal notice and place of business located at 151 East Little Creek Road, in the city of K orfolk, State of Virginia.

Responde.nt David W. Ewing is an individual and an offcer of the said corporate respondents. He formulates, directs and controls the acts and practices of the said corporate respondents, including the acts and practices hereinafter set forth. His principal offce and place of business is located at 6228 Bustleton A venue in the city of Philadelphia, State of Pennsylvania. 2. Respondents are no\v, and for some time last past have been engaged in the advertising, offering for sale, sale and distribution of beef and other meat jJroducts which come within the classification of food as the term "food" is defined in the Federal Trade Commission Act to members of the purchasing public. 3. In the course and conduct of their business, respondents have disseminated and caused the dissemination of certain advertisements by the United States mails and by various means in commerce as "commerce" is defined in the Federal Trade Commission Act, including advertisements in daily newspapers, for the purpose of inducing, and which were likely to induce. directly or BLACK A)'GUS FREEZER MEATS ET AL, 175 170 Initial Decision indirectly, the purchase of food, as the term "food" is defined in the Federal Trade Commission Act; and have disseminated and caused the dissemination of advertisements by various il€flns including those aforesaid, for the purpose of inducing, and which were likely to induce, directly or indirectly, the purchase of food in commerce, as "commerce " is defined in the Federal Trade Commission Act.

4. Typical of the statements appearing in the newspaper advertisements disseminated as aforesaid are the following: (The Washington Post, 10- 65) (Depiction of a Black Steer) Black Angus Fancy Beef Sides 319 lb. with volume orders.

IOWA BEEF '" '" '" Have your meat cut and wrapped at your convenience. Black Angus Fancy Hindquarters with Steak and Roast Sections * * '" 36(f lb. with volume orders.

Black Angus Freezer :,feats (Washington Daily News, 7- 65) Black Angus' Special. Consists of potentially sirloin, T-bone, round, club steak, roasts, porterhouse, etc. , 291 lb. e. A. Choice Hindquarter;; with roast sections 491 lb. Special- Eeef Orders 69o; lb. and up. Black Angus Freezer Meats (The Philadelphia Inquirer, 9-19-65) Western BEEF Round-up. A ca:rload of top quality beef. Guaranteed tender, delicious beef halves, includes all top cuts of steaks and :roasts 299 lb. Example: 300 lbs. only $6. 69 a \veek for 13 weeks. 2 Convenient locations.

Steak land Freezer Meats (The Virginian-Pilot, 11-12-65) Black Angus" Beef Sale-(depiction of Black Steers- lb. \Vestern Fed Beef Sides including a1l Steaks, Roasts & Cuts. U, A. Choice beef orders 100 Ibs. and up 331 lb.

Black Angus Freezer Meats 5. Through the use of the aforesaid advertisements and others of similar import and meaning not specifically set out herein, respondents have represented, directly and by implication: (1) That the offer to sell beef at 29, 31 , and 33 cents per pound is a bona fide offer to sell such merchandise at these prices. (2) That the beef offered at the prices aforesaid is top quality beef and that it has been graded as "choice" by the L'united States Department of Agriculture.

, Initial Decision 71 F. (3) That the beef offered at the prices aforesaid consists primarily of sirloin, T-bone, porterhouse, roasts and other top quality cuts of beef.

(4) That the beef offered in said advertisements comes entirely or primarily from the breed of cattle known as Black Angus.

(5) That the beef offered in said advertisements will be cut and wrapped at the purchaser s convenience. 6. In truth and in fact:

(1) The offer to sell beef at 29, 31 and 33 cents per pound is not a bona fide offer but, on the contrary, is made for the purpose of inducing the public to come to respondents ' places of business. When customers respond and go to said places of business, respondents ' employees and representatives point out to said customers that there win be an excessive weight loss in trimming and cutting said beef and otherwise disparage the beef offered at the prices aforesaid and attempt to, and usually do, sell beef at higher prices to said customers.

(2) The beef offered at 29, 31 and B3 cents per pound is not choice" or top quality beef and it has not been so graded by the United States Department of Agriculture. (3) The beef offered at the prices aforesaid does not consist primarily of sirloin, T -bone, roasts, porterhouse and other top quality cuts of beef.

(4) The beef offered in said advertisements does not come entirely or primarily from the breed of catte known as Black Angus.

(5) The beef offered in said advertisements is not, in many instances, cut and \vrapped at the purchaser s convenience; on the contrary, it is cut and wrapped at respondents' convenience. Therefore, the advertisements referred to iT\ Finding No. were, and are, misleading in material respects and constituted and now constitute false advertisements " as that term is defined in the Federal Trade Commission Act. 7. The hearing examiner also finds that the use by respondents of the aforesaid false, misleading, and deceptive statements, representations, and practices has had, and now has the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true, and into the purchase of substantial quantities of respondents ' products by reason of said erroneous "nd mistaken belief.

BLACK ANGUS FREEZER MEATS ET AL. 177 170 Initial Decision CONCLUSIONS 1. The aforesaid acts and practices of respondents, as herein found, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce, in violation of Sections 5 and 12 of the Federal Trade Commission Act. 2. The Federal Trade Commission has jurisdiction of and over respondents and of the subject matter of this proceeding. 3. The complaint herein states a cause of action and this proceeding is in the public interest.

The order, as hereinafter set forth, follows the form of the order contained in the complaint and is also the order agreed to by the parties.

After due consideration, the hearing examiner believes that such order is appropriate and may be entered. ORDER It is ordered That respondents Angus Freezer Meats, Inc., a corporation trading as Black Angus Freezer ;'deats, or under any other name or names, and its offcers; Steak land Freezer Meats Inc. , a corporation, and its offcers; Black Angus Freezer Meats of Virginia, Inc. , a corporation, and its offcers; and David ''0/. Ewing, individually and as an offcer of said corporations, and respondents' agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of beef or other meat products, do forthwith cease and desist from: A. Disseminating, or causing the dissemination of, any advertisement by means of the United States mails or by any means in commerce, as "commerce" is defined in the Federal Trade Commission Act, which advertisement represents, directly or by implication:

1. That any such products are offered for sale when such offer is not a bona fide offer to sell such products at the price or prices stated.

2. That beef offered at 29 , 3J or 33 cents per pound or at any other comparatively low price per pound, is choice" or top quality meat; or that such beef has been so graded by the United States Department of Agriculture.

3. That the beef offered at the prices aforesaid con- Final Order 71 F.

sists primarily of sirloin, T-bone, roasts, porterhouse or other top quality cuts of meat.

4. That the beef offered for sale comes entirely or primarijy from the Black Angu3 breed of catte: P,' vided, hOWe'oCT That it shall be a defense in any enforcement proceeding instituted under subparagraphs , 3 or 4 of Paragraph A of this order for respondents to establish that the advertised beef conforms to the representations made.

5. That the beef or meat products offered for sale will be cut and trimmed at the convenience of the purchaser: Provided, however That it shall be a defense in any enforcement proceeding instituted hereunder for respondents to establish that they in fact comply with such representation B. Disseminating, or causing the dissemination of, any advertisement by means of the United States mails or by any means in commerce, as "commerce " is defined in the Federal T:trade Commission Act, which advertisement misrepresents in any manner the quality or grade of any beef or other meat product.

C. Discouraging the purchase of, or disparaging in any manner, any products which are advertised or offered for sale in advertisements disseminated or caused to be disseminated in commerce as "commerce" is defined in the Federal Trade Commission Act.

D. Disseminating, 01' causing to be disseminated, any advertisement by any means, for the purpose of inducing, or which is likely to induce, directly or indirectly, the purchase of respondents ' products in commerce, as "commerce " is defined in the Federal Trade Commission Act, which advertisement contains any of the representations or misrepresentations prohibited in Paragraphs A and B above. FINAL ORDER No appeal from the initial decision of the hearing examiner having been filed, and the Commission having determined that the case should not be placed on its own docket for review, and that pursuant to Section 3.21 of the Commission s Rules of Practice (effective August 1, 1963), the initial decision should be adopted and issued as the decision of the Commission: It is ordered That the initial decision of the hearing examiner GROVAL KNI1"red FABRICS , I :C. , ET AL. 179 170 Complaint shall, on the J 6th day of February 1967, become the decision of the Commission.

It is further o1'de1'd That Angus Freezer Meats, Inc., a corporation, trading as Black Angus Freezer Meats; Steakland Freezer ?vleats, Inc., a corporation; Black Angus Freezer Meats of Virginia, Inc., a corporation; and David W. Ewing, individually and as an offcer of said corporations, shall within sixty (60) days after service of this order upon them, file with the Commission a report in writing, signed by such respondents, setting forth in detail the manner and form of their compliance with the order to cease and desist.