Cocoa And Choco Late Industry
16 CFR Part 194 · Trade practice rules · in the Code of Federal Regulations 1960-1960 (1 annual editions)
Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.
Latest edition: Library of Congress, 1960 CFR · Earliest edition: 1960 CFR
Text (1960 edition, OCR)
§ 1940 PART 194—-COCOA AND CHOCO- LATE INDUSTRY Sec 1940 Definition industry product Group I 1941 Deception (general) 1942 Misuse of the word free 1943 Imitation or simulation of trade- marks trade names etc 1944 False invoicing 1945 False and misleading price quota- tions etc 1946 Tie-in sales coercing purchase of one product as a prerequisite to the purchase of other products 1947 Consignment distribution 1948 Commerctal bribery 1949 Defamation of competitors or dis- paragement of their products 19410 Unlawful coercion or combinations in restraint of trade 19411 Prohibited discrimination 19412 Exclusive deals 19413 Inducing breach of contract 19414 Enticing away employees of compet- itors 19415 Marketing of products through lot- tery or game of chance 19416 Selling below cost 19417 Aiding or abetting use of unfatr trade practices COMMITTEE ON TRADE PRACTICES 194 201 Industry committee AUTHORITY §§ 1940 to 194201 issued un- der sec 6 38 Stat 721 15U S C 46 Inter- pret or apply sec 5 38 Stat 719 as amended 140 8 C 45 Source §§ 1940 to 194201 appear at 15 F R 6543 Sept 28 1950 except as otherwise noted § 1940 Definition, dustry product As used in this part the term “indus- try product” shall mean any and all kinds of commercially manufactured or processed cocoa or chocolate or cocoa or chocolate products which are pack- aged designed or marketed for the use of consumers either without further processing or with only such processing as 1S usually performed in the home Such products shall be those included in the Definitions and Standards of Identity for Cacao Products as promul- gated by the Food and Drug Admunistra- tion (21 CFR Part 14) such as baking chocolate bitter chocolate cooking chocolate breakfast cocoa high fat cocoa medium fat cocoa low fat cocoa cocoa sweet chocolate mulk chocolate sweet milk chocolate skim milk choco- late sweet skim milk chocolate butter- milk chocolate mixed dairy-product Page 602 Title 16—Commercial Practices chocolate, also, cocoa or chocolate-fla- vored syrups and all kinds of solid or molded chocolate products Not in- cluded however in this definition are the various kinds of chocolate coatings and other chocolate and cocoa products sold in bulk to other manufacturers for further processing 1 Group I § 1941 Deception (general) The practice of selling advertising, de- scribing or otherwise representing an 1n- dustry product in any manner or under any circumstances having the capacity and tendency or effect of misleading or deceiving purchasers, prospective pur- chasers or the consuming public with respect to the grade quantity price, value, colnposition ingredients nutri- tional value character nature size use, preparation manufacture or distribu- tion of such product or in any other inaterlial respect is an unfair trade practice Norge Among the inhibitions of this sec- tion is the faise advertisement of any industry product as the term false adver- tisement is defined in section 15 of the Federal Trade Commission Act as amended § 1942 Mhsuse of the word “free ” Use of the word ‘free ”’ or any word or term of similar import in advertising or otherwise to designate or describe any product or service which 1s not in truth and in fact a gift or gratuity or 1s not given to the recipient thereof without requiring the purchase of other mer- chandise or requiring the performance of some service inuring directly or indi- rectly to the benefit of the industry member using such word 1s an unfair trade practice § 1943 Imitation or simulation of trade- marks, trade names, etc The imitation or simulation of the trade-marks trade names or other ex- clusively owned marks of identification 1 White §§ 1941 to 19417 inclusive are not applicable to the business of selling or dis- tributing cocoa or chocolate and cocoa or chocolate products in bulk to other manu- facturers for further processing such fact is not to be construed as relieving or purport- ing to relieve those engaged in such business from the obligation of complying with the requirements of the statutes on which §§ 1941 to 19417 inclusive are based or any other legal requirements Chapter I—Federal of competitors with the capacity and tendency or effect of misleading or de- celving purchasers prospective pur- chasers or the consuming public 1s an unfair trade practice § 1944 False invoicing (a) It 1s an unfair trade practice to withhold from or insert 1n invoices any statements or information by reason of which omission or insertion a false record is made wholly or in part of the trans- actions represented in the face of such invoices, with the capacity and tendency or effect of thereby misleading or deceiv- ing purchasers prospective purchasers, or the consuming public (b) It 1s an unfair trade practice to falsify remove or fail to furmish any purchase slip ticket card invoice or other record with the capacity and tendency or effect of thereby misleading or decelving purchasers prospective purchasers or the consuming public § 1945 False and misleading price quo- tations, etc The publishing or circulating by any member of the industry of price quota- tions, price lists or terms or conditions of sale which are false or have the capac- ity and tendency or effect of misleading or deceiving purchasers prospective pur- chasers or the consuming public is an unfair trade practice § 1946 Thie-in sales, coercmg purchase of one product as a prerequisite to the purchase of other products The practice of coercing the purchase of one or more products as a prerequisite to the purchase of one or more other products where the effect may be to sub- stantially lessen competition or tend to create a monopoly or to unreasonably restrain trade 1s an unfair trade prac- tice § 1947 Consignment distmbution It 1s an unfair trade practice for any member of the industry to employ the practice of shipping industry products on consignment or pretended consignment for the purpose and with the effect of artificially clogging or closing trade out- lets and unduly restricting competitors’ use of said trade outlets in getting their products to consumers through regular channels of distribution thereby injur- ing destroying or preventing competi- tion or tending to create a monopoly or to unreasonably restrain trade Noth- Trade Commission § 19410 ing in this section shall be construed as restricting or preventing consignment shipping or marketing of industry prod- ucts in good faith where suppression of competition restraint of trade or un- due interference with competitors use of the usual channels of distribution, 1s not effected § 1948 Commercial bribery It 1s an unfair trade practice for a member of the industry directly or indi- rectly to give or offer to give or permit or cause to be given money or anything of value to agents employees, or repre- sentatives of customers or prospective customers or to agents employees, or representatives of competitors custom- ers or prospective customers without the knowledge of their employers or princi- pals as an inducement to influence their employers or principals to purchase or contract to purchase products manufac- tured or sold by such industry member or the maker of such gift or offer or to 1n- fluence such employers or principals to refrain from dealing in the products of competitors or from dealing or con- tracting to deal with competitors § 1949 Defamation of competitors or disparagement of their products The defamation of competitors by falsely 1mputing to them dishonorable conduct inability to perform contracts, questionable credit standing or by other false representations or the false dis- paragement of the products of compet- itors in any material respect or of their business methods selling prices values credit terms policies or services 1s an unfair trade practice § 19410 Unlawfnl coercion or combina- tions in restraint of trade It 1s an unfair trade practice for a member of the industry (a) To use directly or indirectly any form of threat intimidation or coercion against any member of the mndustry or other person to unlawfully fix maintain, or enhance prices suppress competition or restrain trade or (b) To enter into or take part in di- rectly or indirectly any agreement un- derstanding combination conspiracy or concerted action with one or more mem- bers of the industry or with one or more other persons to unlawfully fix main- tain or enhance prices suppress com- petition or restram trade Page 603 § 19411 § 19411 Prohibited discrimmation 2 (a) Prohibited discriminatory prices, or rebates refunds, discounts credits, ete which effect unlawful price discrimz- nation Itis an unfair trade practice for any member of the industry engaged in commerce, 1n the course of such com- merce to grant or ailow secretly or openly directly or indirectly any rebate refund discount credit or other form of price differential where such rebate refund discount credit or other form of price differential effects a discrimina- tion in price between different purchas- ers of goods of like grade and qualhty where either or any of the purchases involved therein are in commerce and where the effect thereof may be substan- tially to lessen competition or tend to create a monopoiy in any line of com- merce, or to injure destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination or with custom- ers of either of them Provided however (1) That the goods involved in any such transaction are sold for use con- sumption or resale within any place under the jurisdiction of the United States, (2) That nothing contained in this paragraph shali prevent differentials which make only due aliowance for dif- ferences in the cost of manufacture sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered, (3) That nothing contained in this paragraph shali prevent persons engaged in selling goods wares or merchandise in commerce from selecting their own cus- tomers in bona fide transactions and not in restraint of trade, (4) That nothing contained in this paragraph shall prevent price changes from time to time where made in re- ?As used in this section the word com- merce means trade or commerce among the several States and with foreign nations or between the District of Columbia or any Ter- ritory of the United States and any State Territory or foreign nation or between any insular possessions or other places under the jurisdiction of the United States or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States Page 604 Title 16—Commercial Practices sponse to changing conditions affecting the market for or the marketabuiity of the goods concerned, such as but not limited to actuai or imminent deteriora- tion of perishabie goods obsolescence of seasonai goods distress sales under court process or sales 1n good faith 1n discon- tinuance of business in the goods con- cerned (b) Prohibited brokerage and commis- sions Itis an unfair trade practice for any member of the industry engaged in commerce in the course of such com- merce, to pay or grant or to receive or accept anything of value as a commus- sion brokerage or other compensation, or any allowance or discount in lieu thereof except for services rendered in connection with the sale or purchase of goods wares or merchandise elther to the other party to such transaction or to an agent representative or other inter- mediary therein where such intermedi- ary 1s acting in fact for or in behalf or 1s subject to the direct or indirect con- trol of any party to such transaction other than the person by whom such compensation 1s so granted or paid (ce) Prohibited advertising or promo- tional allowances etc It is an unfair trade practice for any member of the in- dustry engaged in commerce to pay or contract for the payment of advertising or promotional] allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facili- ties furnished by or through such cus- tomer in connection with the processing handling sale or offering for sale of any products or commodities manufac- tured sold or offered for sale by such member unless such payment or consid- eration 1s available on proportionally equal terms to all other customers com- peting 1n the distribution of such prod- ucts or commodities (d) Prohibited discryminatory serv- tces or facilities It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale with or without processing by contracting to furnish or furnishing or by contributing to the furnishing of any services or facilities connected with the processing handling, sale or offering for saie of such com- modity so purchased upon terms not ac- Chapter I—Federal Trade Commission corded to all competing purchasers on proportionally equal terms (e) Inducing or receiving an illegal discrimination wn price It is an unfair trade practice for any member of the industry engaged 1n commerce in the course of such commerce knowingly to induce or receive a discrimination in price which is prohibited by the fore- going provisions of this section (f) Exemptions The inhibitions of this section shall not apply to purchases of their supplies for their own use by schools colleges universities public libraries churches, hospitals and chari- table institutions not operated for profit § 19412 Exclusive deals It 1s an unfair trade practice for any member of the industiy to contract to sell or sell any product, or to fix a price charged therefor or discount from or re- bate upon such price on the condition agreement or understanding that the purchaser thereof shall not use or deal in the products of a competitor or competi- tors of such industry member where the effect of such sale or contract for sale or of such condition, agreement or un- derstanding may be to substantialiy Jessen competition or tend to create a monopoiy in any line of commerce § 19413 Inducing breach of contract Inducing or attempting to induce the breach of existing lawful contracts be- tween competitors and their customers or their supphers by any false or decep- tive means whatsoever or interfering with or obstructing the performance of any such contractual duties or services by any such means, with the purpose and effect of unduly hampering injur- ing or preJudicing competitors m their business 1s an unfair trade practice § 19414 Entiemg away employees of competitors It 1s an unfair trade practice for any member of the industry wilfully to entice away employees of competitors with the intent and effect of thereby unduly ham- pering or mjuring competitors in their business and destroying or substantially lessening competition Provided That nothing in this section shall be construed as prohibiting employees or agents from seeking or obtaining more favorable employment § 194 201 §19415 Marketing of products through lottcry or game of chance (a) It 1s an unfair trade practice for any member of the industry to sell or promote the sale of any industry product by means of a game of chance gift enter- prise or lottery scheme (b) The inhibitions of this section shall be understood as also extending to the marketing of an industry product which 1s specially packaged or arranged so as to facilitate its resale or distribu- tion by a customer of an industry mem- ber to the public by means of a game of chance or lottery scheme and to the marketing or supplying of any lottery device by an industry member to his cus- tomer either separately or 1n conjunction with an industry product § 19416 Selling helow cost The practice of selling industry prod- ucts at a price less than the cost thereof to the seller with the purpose or intent, and where the effect may be to mjure, suppress or stifle competition or tend to create a monopoly in the production or sale of such products 1s an unfair trade practice As used m this section the term “cost ’ means the total cost to the seller including the costs of acquisition, processing preparation for marketing sale and deiivery § 19417 Aiding or abetting use of un- far trade practices It 1s an unfair trade practice for any person firm or corporation to aid, abet coerce or induce another, directly or mdirectly to use or promote the use of any unfair trade practice specified in §§ 1941 to 19416 inclusive COMMITTEE ON TRADE PRACTICES § 194 201 Industry committee The provisions of § 161 of this sub- chapter shall be apphcable to an industry committee established under this part [21 FR 1174 Feb 21 1956] PART 195—BEDDING MANUFACTUR- ING AND WHOLESALE DISTRIBUT- ING INDUSTRY Sec 1950 Definition bedding products Group I 195.1 Deception as to used materials and parts 195.2 Other deception through misrepre- sentation or concealment Page 605