Fresh Fruit And Vegetable Industry

16 CFR Part 74 · Trade practice rules · in the Code of Federal Regulations 1966-1978 (12 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 These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.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, 1978 CFR · Earliest edition: 1966 CFR

Decisions that mention this industry's rules (1)

Text (1978 edition, OCR)

§ 67.27

the price of any product offered for
sale; or furnish any means of instru-
mentality by which others engaged in
the sale of industry products may
make any such representation.

Notre: The Commission promulgated
Guides Against Deceptive Pricing effective
January 8, 1964, superseding the Guides
adopted October 2, 1958. The 1964 Guides
are appended to these rules for additional
guidance with respect to price savings repre-
sentations.

CRule 26]

§ 67.27 Misbranding, misrepresentation,
and deceptive selling methods.

Members of this industry, in the
course of the marketing or distribu-
tion of industry products, shall not:

(a) Use, or cause or promote the use
of, any trade promotional literature,
advertising matter, mark, brand, label,
designation, depiction, or other type of
oral or written representation, howev-
er disseminated or published, which
directly or by implication, or through
failure to disclose material informa-
tion, has the capacity and tendency or
effect of mnisleading or deceiving pur-
chasers or prospective purchasers with
respect to—

(1) the type, grade, quality, quantity,
use, size, weight, nature, condition, du-
rability, performance, serviceability,
origin, manufacture, distribution, or
price of any industry product; or,

(2) the identity of a performing
artist as to either part or all of a re-
cording, the recorded content of any
recording, the name or commonly
known title of a recording or a selec-
tion or tract of a recording, or the fact
that a recording has been previously
issued under a different title, or in any
other material respect;

and shall not

(b) Offer for sale, sell, distribute, or
promote the sale or distribution of,
products of the industry under any
other conditions or selling practices
which have the capacity and tendency
or effect of misleading or deceiving
the purchasing or consuming public in
any material respect. [Rule 27]

Title 16—Commerciol Proctices

PART 74—FRESH FRUIT AND
VEGETABLE INDUSTRY

Sec.

14.0 The industry and its products defined.
14.1 Prohibited price discrimination.

14.2 Prohibited brokerage.

AutTHoRITy: Sec. 2, 49 Stat. 1526; sec. 6, 38
Stat. 721; 15 U.S.C. 13, 46, unless otherwise
noted.

Source: 30 FR 5331, Apr. 15, 1965, unless
otherwise noted.

§74.0 The industry and its products de-
fined.

(a) Members of the industry are per-
sons, firms, corporations and organiza-
tions engaged in selling, marketing or
distributing in commerce any of the

-products or goods of the industry as

defined in paragraph (b) of this sec-
tion.

(b) Products or goods of this indus-
try consist of all varieties of fresh
fruits and vegetables grown in the
United States or imported from other
countries.

§74.1 Prohibited price discrimination.

(a) It is unlawful for any member of
the industry engaged in commerce, in
the course of such commerce, to grant
or allow, secretly or openly, directly or
indirectly, any rebate, refund, dis-
count, credit, or other form of price
differential, where such rebate,
refund, discount, credit, or other form
of price differential, effects a discrimi-
nation in price between different pur-
chasers of goods of like grade and
quality, where either or any of the
purchases involved therein are in com-
merce, and where the effect thereof
may be substantially to lessen compe-
tition or tend to create a monopoly in
any line of commerce, or to injure, de-
stroy, or prevent competition with any.
person who either grants or knowingly
receives the benefit of such discrimi-
nation, or with customers 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, and are not purchased by
schools, colleges, universities, public li-
braries, churches, hospitals, and chari-

404 ‘


Chapter I—Federal Trade Commission

table institutions not operated for
profit, as supplies for their own use:

Note: Purchases by U.S. Government: In
an opinion submitted to the Secretary of
War under date of December 26, 1936, the
U.S. Attorney General advised that the
Robinson-Patman Antidiscrimination Act
“is not applicable to Government contracts
for supplies.” (38 Opinions, Attorney Gener-
al 539.)

(2) That nothing contained in this
paragraph (a) shall prevent differen-
tials which make only due allowance
for differences in the cost of produc-
tion, sale, or delivery resulting from
the differing methods or quantities in
which industry products are sold or
delivered to different purchasers:

Nore: Cost justification under the above
proviso depends upon net savings in cost
based on all facts relevant to the transac-
tions under the terms of proviso (a)(2). For
example, if a seller regularly grants a dis-
count based upon the purchase of a speci-
fied quantity by a single order for a single
delivery, and this discount is justified by
cost differences, it does not follow that the
same discount can be cost justified if grant-
ed to a purchaser of the same quantity by
multiple orders or for multiple deliveries.

(3) That nothing contained in this
section shall prevent persons engaged
in selling goods, wares, or merchandise
in commerce from selecting their own
customers in bona fide transactions
and not in restraint of trade;

(4) That nothing contained in this
section shall prevent price changes
from time to time where made in re-
sponse to changing conditions affect-
ing the market for or the marketabil-
ity of the good concerned, such as but
not limited to actual or imminent de-
terioration of perishable goods, obso-
lescence of seasonal goods, distress
sales under court process, or sales in
good faith in discontinuance of busi-
ness in the goods concerned;

(5) That nothing contained in this
section shall prevent the meeting in
good faith of an equally low price of a
competitor.

Note 1: Subsection (b) of section 2 of the
Clayton Act, as amended, reads as follows:
“Upon proof being made, at any hearing on
a complaint under this section, that there
has been discrimination in price or services
or facilities furnished, the burden of rebut-
ting the prima facie case thus made by
showing justification shall be upon the

§ 74.1

person charged with a violation of this sec-
tion, and unless justification shall be affir-
mativeiy shown, the Commission is autho-
rized to issue an order terminating the dis-
crimination: Provided, however, That noth-
ing herein contained shall prevent a seller
rebutting the prima facie case thus made by
showing that his lower price or the furnish-
ing of services or facilities to any purchaser
or purchasers was made in good faith to
meet an equally low price of a competitor,
or the services or facilities furnished by a
competitor.”

Nore 2: In complaint proceedings, justifi-
cation of price differentials under para-
graphs (a)(2), (4), and (5) of this section is a
matter of affirmative defense to be estab-
lished by the person or concern charged
with price discrimination.

NOTE 3: Nothing in this section should be
construed as prohibiting the granting of dif-
ferent prices which are not otherwise viola-
tive of the foregoing provisions of this sec-
tion, to customers in different functional
categories. For example, a seller may grant
a lower price to wholesalers than to retail-
ers to the extent that such wholesalers
resell to retailers. If such wholesalers also
sell at retail they may not properly be
granted a price lower than the prices grant-
ed to competing retailers on that portion of
the goods they sell at retail.

(b) The following are examples of
price differential practices to be con-
sidered as subject to the prohibitions
of paragraph (a) of this section when
involving goods of like grade and qual-
ity which are sold for use, consump-
tion, or resale within any place under
the jurisdiction of the United States,
and which are not purchased by
schools, colleges, universities, public li-
braries, churches, hospitals, and chari-
table institutions not operated for
profit, as supplies for their own use,
and when—

(1) The commerce requirements
specified in paragraph (a) of this sec-
tion are present; and

(2) The price differential has a rea-
sonable probability of substantially
lessening .competition or tending to
create a monopoly in any line of com-
merce, or of injuring, destroying, or
preventing competition with the in-
dustry member or with the customer
receiving the benefit of the price dif-
ferential, or with customers of either
of them; and

(3) The price differential is not justi-
fied by cost savings (see paragraph
(a)(2) of this section); and

405


§ 74.1

(4) The price differential is not made
in response to changing conditions af-
fecting the market for or the market-
ability of the goods concerned (see
paragraph (a)(4) of this section); and

(5) The lower price was not made to
meet in good faith an equally low
price of a competitor (see paragraph
(a)(5) of this section):

Example No, 1. An industry member sells
goods to one or more of his customers at a
higher price than he charges other custom-
ers for merchandise of like grade and qual-
ity. It is immaterial whether or not such dis-
crimination is accompiished by misrepresen-
tation as to the grade and quality of the
products sold.

Example No, 2. An industry member sells
goods to one or more of his customers at a
higher price than he charges other custom-
ers for merchandise of like grade and qual-
ity in like containers. It is immaterial
whether or not such discrimination is ac-
complished by misrepresentation as to the
type or cost of the containers in which the
products are packaged.

Example No. 3. Several buyers reserve a
specified quantity of a particular grade and
quality of fresh fruits and vegetables for
current delivery. At the time of routing, or-
dering accessorial services and billing, one
of such buyers refuses to accept the ship-
ment at the price charged other current
buyers for such goods of like grade and
quantity and will accept delivery only at a
reduced price. If the seller accedes to the
buyer’s demands for a reduced price and all
the conditions set for above immediately
preceding Example No. 1 are present, the
resulting price discrimination would be vio-
lative of paragraph (a) of this section. Simi-
larly, if the buyer knowingly induced or re-
ceived such illegal discrimination in price,
he would have violated paragraph (d) of
this section.

(c) The following examples are in-
tended to illustrate practices in the
Fresh Fruit and Vegetable Industry
which, although possibly giving raise
to a price differential among buyers,
do not violate paragraph (a) of this
section under conditions set forth in
such examples:

Example No. 1. A buyer enters into a bind-
ing and enforceable agreement with a seiler
to purchase at a stated price a specified
quantity of fresh fruits or vegetables, ship-
ment to take place at such time in the
future so that the transaction is not consid-
ered a sale for current delivery.

The agreed upon price may be lower or
higher than such seller is selling goods of
like grade and quality to other buyers as to

Title 16—Cammercial Practices

sales for current delivery on the date the ar-
rangement is made. By like token, the price
paid may be lower or higher than prices
paid by other buyers as to sales for current
delivery on the day specified for shipment.

In agreeing to buy now for future ship-
ment, the buyer is faced with the risk of a
future declining market. The opportunity to
make such future purchases is made avail-
able at the same price by the seller to all his
customers.

In order for this example to be applicable,
sufficient time must elapse under the con-
tract between the agreement and the deliv-
ery so as to constitute the assumption by
the buyer and the seller of an actual market
risk. The foregoing is to be determined from
the facts and circumstances of each case.
This example inay not be relied upon as a
subterfuge for paying or granting discrimi-
natory prices.

Example No. 2. Buyer A buys a quantity
of goods from a distant seller; the terms are
“P.O.B. acceptance final.” Buyer B located
in the same city as Buyer A, buys the same
quantity of goods of like grade and quality
from the same seller; the terms of sale are
“inspection, acceptance, arrival.” Buyer A
Pays less for the goods than Buyer B as a
result of the differing risks, such as transit
damage, deterioration and rejection borne
by the parties in each sale. Either buyer
had, as is required, the opportunity to buy
from the same seller the goods on the terms
under which they were purchased by the
other.

Note: It is the concensus of the industry
that the definitions ard terms of sale preva-
lent in the industry, and the relative risks,
advantages and obligations involved in each
such term, except only as otherwise specifi-
cally provided herein, are, where applicable,
as described in § 46.43 of the regulations
issued pursuant to the Perishable Agricul-
tural Commodities Act (7 CFR 46.43).

Example No. 3. A large number of sellers
and buyers are continuously engaged in bar-
gaining for what is, from their standpoint,
the best possible price for a particular com-
inodity. Numerous transactions take place
with great rapidity, usually consummated
through telephone conversations. On occa-
sion, one buyer may purchase from a seller
goods at a lower price than another buyer
inay purchase goods of like grade and qual-
ity from the same seller. On a subsequent
day or within a series of subsequent transac-
tions on the same day, the situation is re-
versed. While on any given day discrimina-
tions are likely to exist, there is not likely to
be a violation of paragraph (a) of this sec-
tion if:

1. The discriminations are not the result
of a plan or formula whereby a particular
buyer or class of buyers receives a relatively
consistent advantage, and

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Chapter I—Federal Trade Commissian

2. The discriminations do not, in fact,
afford a relatively consistent advantage to a
particular buyer or class of buyers, and

3. The discriminations are not of such size
or extent as to be likely to cause or threaten
injury to buyers or classes of buyers which
purchase from the same seller but do not re-
celve any benefit from the discriminations,
an

4. The discriminations are not of such a
nature as to cause or threaten competitive
injury to competing sellers.

(da) It is also unlawful for any
member of the industry engaged in
commerce, in the course of such com-
merce, knowingly to induce or receive
a discrimination in price prohibited by
paragraph (a) of this section. [Rule 1]

§ 74.2 Prohibited brokerage.

(a) It is unlawful for any member of
the industry engaged in commerce, in
the course of such commerce, to pay
or grant, or to receive or accept, any-
thing of value as a commission, bro-
kKerage, or other compensation, or any
allowance or discount in lieu thereof,
except for services rendered in connec-
tion with the sale or purchase of
goods, wares, or merchandise, either to
the other party to such transaction or
to an agent, representative, or other
intermediary therein where such in-
termediary is acting in fact for or in
behalf, or is subject to the direct or in-
direct control, of any party to such
transaction other than the person by
whom such compensation is so granted
or paid.

(1) The foregoing provision prohib-
its, in connection with the sale of
goods, the payment of a brokerage fee
or the granting of an allowance or dis-
count in lieu of a brokerage fee—

(i) By the seller to the buyer; and

ii) By the buyer to the seller; and

(iii) By the seller or the buyer to an
agent, representative or other interme-
diary who is working for or in behalf
of the other party to the sales transac-
tion, or is subject to such other party’s
direct.or indirect control; and

(iv) By an agent of the seller to the
other party to the sales transaction,
either through paying such other
party all or a portion of his fee or
through accepting a reduced fee which
results in a reduction in the price by
the seller.

§ 74.2

The provision of this paragraph (a)
aiso prohibits the receipt of such a
commission, brokerage fee, discount or
allowance under the conditions pre-
scribed.

(b) The paying or granting or receiv-
ing or accepting of any commission,
brokerage fee, or allowance or dis-
count in lieu thereof, such as is pre-
scribed by paragraph (a) of this sec-
tion is unlawful without regard to
whether or not the practice—

(1) Causes or is likely to cause com-
petitive injury as described in para-
graph (a) of § 74.1.

(2) Was employed to meet any pay-
ment, allowance or discount furnished
by a competitor. ;

(c) An intermediary is prohibited
from receiving, in connection with the
same sales transaction, a brokerage fee
or allowance or discount in lieu there-
of from both the seller and the buyer,
and Is also prohibited from receiving a
brokerage fee or allowance or discount
in lieu thereof from either the seller
or buyer if he, the intermediary, is
subject to the direct or indirect con-
trol of the other party to the sales
transaction.

(1) Does the intermediary represent
the buyer or the seller?

(i) This is determined on the basis of
the facts and circumstances in each
sales transaction. The records of the
parties concerning the sale and the ac-
tions of such parties in connection
with negotiating the sale and the han-
dling of subsequent developments oc-
curring throughout the course of the
transaction are to be considered in
making such a determination.

(ii) If there is a dispute as to wheth-
er there was an agreement between
the broker and either the seller or the
buyer concerning the sales transac-
tion, the actions and records of the
parties involved are particularly perti-
nent in determining which party the
broker represents.

(a) Among acts and practices which
indicate, in connection with the sale of
goods, that a broker may be represent-
ing the seller are the following:

(1) Seller solicits the broker's ser-
vices in effecting the sale of the goods
involved under terms most advanta-
geous to the seller.

407

30-034 O - 78 - 27

s


§ 74.2

(2) Broker offers the goods to the
buyer at the seller’s price, and there-
after, transmits counter offer, if any,
to the seller.

(3) Broker negotiates sale of the
goods in accord with the seller’s
instructions and authorization.

(4) If shipment is rejected, or an
allowance is requested, or other dis-
putes arise, the broker acts to resolve
such matters so as to protect the best
interests of the seller consistent with
the terms of the contract.

(6) Among acts and practices which
indicate, in connection with the sale of
goods, that a broker may be represent-
ing the buyer are the following:

(1) Buyer solicits the broker’s ser-
vices in effecting the purchase of
goods of the kind involved under
terms most advantageous to the buyer.

(2) Broker contacts seller and makes
offer for merchandise and otherwise
negotiates purchase: on buyer’s
instructions or authorization. Broker
designates size and grade desired by
buyer and seeks, lowest possible price
and best quality within a grade.

(3) In controversies as arise in the
transaction, in negotiating price ad-
justments therein, in rejecting mer-
chandise, and in the handling of any
other matters involved in the sale, the
broker acts to protect the best inter-
ests of the buyer consistent with the
terms of the contract.

(c) Examples of two sales transac-
tions, one in which the broker repre-
sents the seller and the other in which
the broker represents the buyer are as
follows:

Example No. 1. A shipping point broker is
requested by a shipper to help sell five cars
of strawberries. The broker contacts whole-
salers on the terminal markets and sells the
strawberries at a price set by the shipper.
He issues a memorandum of the transaction
to the parties. The broker has represented
the shipper.

Example No. 2. A shipping point broker
calls a jobber by long distance telephone to
see if he needs brokerage service in obtain-
ing produce. The jobber requests the broker
to purchase for him five cars of lettuce of a
certain grade at the lowest available price.
The broker calis several of the local ship-
pers where he is operating and ascertains
where the lettuce can be obtained at the
best price for the buyer. He locates and in-
spects the lettuce and if satisfactory, pur-
chases the desired amount in the name of

Title 16—Commercial Practices

the buyer. Thereafter he sends a memoran-
dum to the parties to the transaction. The
broker has acted as the agent for the buyer.

The above examples illustrate but two
types of situations in which the broker acts
for the seller or the buyer, depending upon
the facts in the particular transaction. It is
not practicable to show all of the variations
of the arrangements made between brokers
and sellers or between brokers and buyers.
These are many and varied. Moreover, a
Slight difference in these arrangements may
bring about a different result. For example,
a shipper may ask a broker if he knows of
any buyer who wants to place orders for the
purchase of produce. If the broker negoti-
ates for a buyer a sale with such shipper
and acts in all respects on the buyer’s
behalf in obtaining for him the most advan-
tageous terms, clearly the buyer may pay
brokerage. Consider a slight variation in the
facts, however. In this situation the shipper,
although knowing that the broker has acted
for buyers previously even in transactions
with the same shipper, calls him and says
that he, the shipper, has produce he would
like to move and asks the broker to help
him do so. If the broker in arranging the
transaction does so in the best interest and
pursuant to instructions of the shipper, and
otherwise acts for the shipper in the trans-
action, he should look to the shipper for
Payment of brokerage. This would be so
even though the buyer had been the bro-
ker’s principal in another transaction.

Some brokers at various shipping points
make it their practice to telephone jobber-
buyers in other areas regularly who give the
broker their orders. The broker then calls
shippers believed to have the produce they
are seeking. Thereafter, the broker inspects
the produce and either accepts or rejects it
for the buyer. If the produce is acceptable
he negotiates a deal pursuant to the buyers’
instructions. The circumstances described
indicate that the broker has acted for the
buyer throughout the transaction and that
the latter may pay brokerage. Here again, a
Slight change in the buying or selling ar-
rangements might well cause a different
result.

In determining whether a broker acts for
a buyer or a seller, each transaction must be
considered on its own facts. A rule of gener-
al applicability can be helpful only in clari-
fying the pertinent legal principles and af-
fording guidance to industry members in
the application of these principles to Par-
ticular situations.

(2) Is the intermediary subject to
the direct or indirect control of the
party to the transaction other than
the person who pays the brokerage?
Such control may be by various

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Chapter i—Federal Trade Cammissian

means. In Commission cases it has
been found to exist where—

(i) A buyer, who was under contract
with buyers to furnish them with pur-
chasing and marketing service, placed
orders with sellers for goods for such
buyers, obtained brokerage fees from
the sellers and credited such fees to
the buyers’ accounts. The sellers were
Prohibited from paying the brokerage

ees,

(ii) An independently owned broker
receiving brokerage fees from the sell-
ers for negotiating sales of private
brand merchandise to certain buyers
was obligated under a contract to pay
license fees for use of such private
brands to a corporation owned by the
buyers. Broker was prohibited from re-
ceiving brokerage fees from the sell-
ers.

(da) Paragraph (a) of this section also
prohibits a seller from paying to a
broker a commission or brokerage fee
in connection with a sales transaction
wherein the broker does not act as an
intermediary for the seller but takes
title to the merchandise involved and
sells lt for his own account.

(e) A discount or allowance by an in-
dustry member is in lieu of brokerage
if it is attributable to a reduction or
elimination of brokerage fees in con-
nection with the sales transaction in-
volved.

(1) A discount or allowance granted
by an industry member to some but
not all customers would not under or-
dinary circumstances be considered in
lieu of brokerage if—

(1) The industry member granting
same makes no sales through brokers
to any of his customers, or

(ii) The industry member makes all
of his sales through brokers at the
same brokerage rate.

(2) The actual basis for a discount or
allowance at the time it was granted
will indicate whether or not such was
in lieu of brokerage.

Nore: A discount or allowance which is
not in lieu of brokerage may nevertheless be
violative of § 74.1.

(f) The following are examples of
violations of paragraph (a) of this sec-
tion:

Example No. 1. A seller sells goods some-
times through brokers and sometimes on a

§ 74.2

direct basis, where no broker is involved. If
on a direct sale the seller deducts an
amount froin the price which in fact consti-
tutes an allowance or discount in lieu of bro-
kerage, both the seller and the buyer have
violated paragraph (a) of this section. It is
of no consequence whether such payment or
allowance is made directly by check, by de-
duction by the buyer from invoice price
before remitting payment therefor, by de-
duction from the sales price by the seller, or
otherwise.

In other transactions, however, the above-
described buyer may function, not as a
buyer, but as a bona fide broker for the
same seller, negotiate for him a sale of
goods to another party in accord with the
seller’s instructions and authorization and
lawfully receive a brokerage fee for such
service.

Example No. 2. In order to make 4 sale of
a large quantity of products to a particular
buyer who will not pay the seller’s going
price, the seller and his broker agree that
the usual brokerage fee will be reduced and
that the price to such buyer will be less
than otherwise by an amount reflecting all
or part of the brokerage reduction. The sale
is made to such buyer at the reduced price.
The seller, the broker and the buyer have
violated paragraph (a) of this section.

Example No. 3. A broker is in fact the pur-
chasing agent for a large buyer corporation
and he is in all respects subject to such cor-
poration’s supervision and control. In con-
nection with negotiation of purchases of
goods and the handling thereof on behalf of
the buyer corporation, the broker performs
certain incidental services for the sellers in-
volved and is paid brokerage fees by the sell-
ers for such services. The payment of the
brokerage fees by the sellers and the receipt
and acceptance thereof by the broker are
violations of paragraph (a) of this section. A
broker may receive compensation for negoti-
ating a valid and binding sales contract only
from his principal for whom he has negoti-
ated such contract.

(g) The following are examples of
practices which are not violative of
paragraph (a) of this section.

Example No. 1. A broker negotiates a valid
and binding contract for the sale to severai
buyers of fresh fruits or vegetables on
behalf of his seller-principal at a price es-
tablished by the seller. The seller delivers
an invoice and/or manifest to the broker
showing the name of the broker as “broker”
and itemizing the list of the merchandise to-
gether with the price of each item. The
names of the buyers are not listed. As a ser-
vice to his seller-principal, the broker bills
and collects from the buyers the amount
charged by the seller, remitting the totai
amount collected, less brokerage, together

409


§ 103.0

with a memorandum of sale identifying the
buyers. There is no violation of paragraph
(a) of this section in this example. In such a
situation wherein the names of the buyers
are not initially disclosed by the broker to
his seller-principal it is the broker’s respon-
sibility to provide confirmation and memo-
randa as will clearly establish his role as a
broker, and it is the seller’s responsibility to
ascertain that the broker is not the buyer.

Example No. 2. An industry member who
is regularly engaged as a packer and shipper
of fresh fruits and vegetables has an inad-
equate supply of a particular commodity to
meet his needs at a particular time. He pur-
chases the necessary quantity to meet such
needs from another regularly engaged
packer-shipper operating at the same level
of distribution. By prearrangement, the pur-
chaser is allowed an inter-packing house dis-
count. Such practice does not violate para-
graph (a) of this section.

Example No. 3. An industry member sells
industry products through his broker to
some purchasers and direct, without the ser-
vices of his broker, to other purchasers. In
doing so he charges lower prices to some
customers because in making sales to them
he incurs less selling and delivery expense
other than savings in brokerage fees and
commissions than he incurs in selling or de-
livering products to the other customers.

Note: A price differential which is not vio-
lative of paragraph (a) of thls section may
nevertheless be violative of § 74.1.

[Rule 2]
PART 103—RABBIT INDUSTRY

Sec.

103.0 The industry and its products de-
fined.

103.1 Misrepresentation of products.

103.2 Misrepresentation concerning prolifi-
cacy, growth, disease-resistance, develop-
ment of superior meat, fur, or hair, etc.

103.3. Misrepresenting industry products as
meeting requirements of a standard or
specification.

103.4 Misrepresentation as to character of
business. .

103.5 Misrepresentation concerning pur-
chase of offspring of rabbits or cavies,
etc.

103.6 Bait advertising.

103.7 Defamation of competitors or false
disparagement of their products.

103.8 Prohibited discrimination.

103.9 Aiding or abetting use of unfair trade
practices.

AvutnHonriry: Secs. 6(g), 5, 38 Stat. 722, 719;
15 U.S.C. 46, 45, unless otherwise noted.

Source: 23 FR 4737, June 27, 1958, unless
otherwise noted.

Title 16—Commerciol Practices

$103.0 The industry and its products de-
fined.

(a) Products of the industry covered
by the rules in this part include all
types, breeds, varieties, or strains of
live domestic rabbits or cavies.

(b) Members of the industry are per-
sons, firms, corporations, and organi-
zations engaged in the sale, offering
for sale, or distribution of any such
products.

§ 103.1 Misrepresentation of products.

In the sale, offering for sale, or dis-
tribution of industry products, it is an
unfair trade practice for any member
of the industry to make or publish, or
cause to be inade or published, any
statement or representation (whether
in the form of advertisement, trade
promotional literature, mark, stamp,
brand, label, depiction, photograph, il-
lustration, radio or television broad-
cast, or otherwise) which, directly or
by implication, has the capacity and
tendency or effect of deceiving pur-
chasers or prospective purchasers con-
cerning:

(a) The grade, quality, quantity, age,
price, value, pedigree, registration,
origin, weight, health, strength,
growth, livability, size, productivity,
breeding, raising, or desirability, of
any industry product; or

(ob) The hair of any industry prod-
uct, the growth, use, grade, or value
thereof, or the market for such hair;
or
(c) The delivery or purported deliv-
ery dates or other terms or conditions
of delivery or sale of any industry
product; or

(d) The experience needed, or pur-
ported gross sales, income, profits, or
opportunities, in connection with the
breeding, raising, or marketing of any
industry product; or

(e) Any other material matter relat-
ing to the breeding, raising, or market-
ing of such product.

§ 103.2 Misrepresentation concerning pro-
lificacy, growth, disease-resistance, de-
velopment of superior meat, fur, or
hair, etc.

It is an unfair trade practice for any
industry member to represent, directly
or by implication, through advertising -
or otherwise, that any rabbits or

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