Describes duties of the Secretary of Commerce under the Fair Packaging and Labeling Act.Food Consumption/Nutrition/Food Safety,

Vadelund, Erick A.

English

Research Papers in Economics

The Expanding Role of the Food Distribution Industry into
Greater Standization of Package, Product, Container
The Role of the Department of Commerce Under the Fair Packaging and Labeling Act
tFd~Q i
Describes duties of the
Secretary of Commerce Eric A. Vadelund
under the Fair Packaging U.S. Bureau of Standards
and Labeling Act Gaithersburg, Maryland
INTRODUCTION being administered within the National
Bureau of Standards, and generally ‘
l The Fair Packaging and Labeling Act was discuss the nature of the program.
enacted primarily to correct economic
abuses in the marketplace. It has two
distinct features: (1) mandatory
labeling provisions which are the
responsibility of the Food and Drug
Administration and the Federal Trade
Commission, and (2) package quantity
standardization provisions, that are
voluntary in nature, and are the
responsibility of the Secrerary of
Commerce. Congress has clearly set
forth in this Act particular duties
which the Secretary of Commerce must
undertake in cooperation with industry
and consumers in achieving the
objectives of the Act. I think the
declaration of policy in the Law
provides the tone and purpose for
carrying out those responsibilities.
Section 2 of the Act sets forth the
declaration of policy as follows:
Informed consumers are essential
to the fair and efficient
functioning of a free market
economy, Packages and their
labels should enable consumers
to obtain accurate information
as to the quantity of the
contents and should facilitate
value comparisons. Therefore,
it is hereby declared to be the
policy of the Congress to assist
consumers and manufacturers in
reaching these goals in the
marketing of consumer goods.
RESPONSIBILITIES
I would like to outline these
responsibilities, indicate how they are
We have essentially four duties under
this Act:
(1) Determination of undue proliferation
in packaged consumer commodities;
(2) Assisting in the development of new
package quantity patterns through
the Voluntary Product Standards
procedures of the Department of
Commerce or through the less formal
process of industry agreements;
(3) Reporting to Congress with
recommendations, both annually and
in specific instances where the
voluntary standards process does
not work; and,
(4) Cooperating with and providing
assistance to State weights and
measures officials to bring about
uniformity in State and Federal
regulations of labeling of consumer
commodities.
The particulars of each of these
responsiblities and the arrangements
made for their administration have been
assigned to the Office of Weights and
Measures in the National Bureau of
Standards.
UNDUE PROLIFERATION
Section 5(d) of the Act states:
Whenever the Secretary of Commerce
determines that there is undue
proliferation of the weights,
103measures, or quantities in which
any consumer commodity or
reasonably comparable consumer
commodities are being distributed
in packages for sale at retail and
such undue proliferation impairs
the reasonable abilities of
consumers to make value com~arisons
with respect to such consumer
commodity or commodities, he
shall rpouest manufacturers,
packers and distributors of the
commodity or commodities to
participate in the development of
a voluntary product standard for
such commodity or commodities
under the procedures for the
development of voluntary products
standards established by the
Secretary pursuant to section 2
of the Act of March 3, la~l (31
St. 1449, as amended, 15 U.S.C.
272). Such r)rocedures shall
provide adequate manufacturer,
packer, distributor, and consumer
representation.
There has been some confusion regarding
the responsibility for makinq
determinations of undue proliferation.
To clarify this point, it should be
noted that the purpose of this section
is to identify those situations in which
the consumer’s reasonable ability to
make value comparisons, with respect to
a consumer commodity, is impaired
because there is undue proliferation of
the weights, measures, or quantities in
which the commodity is being distributed
for sale at retail. This provision
does not condemn the proliferation of
consumer commodities (no one is
suggesting that a diversified market
choice is not good in a consumer-
oriented economy), does not apply to
the performance of the product itself,
and does not substitute the Government’s
judgment of marketplace choices for that
of the consumer.
The provision does require us to
ascertain whether there is undue
Proliferation of the weights, measures,
or quantities in which consumer
commodities are being distributed in
packages for retail sale; and whether,
because of such undue proliferation, the
ability of an objective, reasonable,
and prudent consumer to make value
comparisons is impaired.
In carrying out this effort, we must
necessarily proceed on a case-by-case
basis. It is difficult, if not
impossible, to state that what is undue
~roliferation in weights or quantities
of one product is the same as that for
all or even one other product. For
each product, determinations must be
made as to what patterns exist in
particular areas, the number of
quantities within a reasonable range
of sizes, the total marketing pattern,
the ease with which price comparisons
can be made, the classes of products
sold in the weights or quantities in
question, and reasonableness of
comparing one kind of a product with
another for purposes of making a value
comparison.
DEVELOPMENT OF PACKAGE OUANTITY PATTERNS
Under the NBS program, the development
of new package quantity patterns for
consumer commodities has taken one of
two forms. Several industries have
requested the assistance of the
Department of Commerce in the
development and publication of formal
voluntary standards covering the
quantities in which their products are
to be offered for sale at retail without
a finding of undue proliferation
regarding their products. Other
industries have decided informally and
voluntarily to reduce or simplify the
quantities of their ,oarticular products
without followinq any formal process.
Requests for the development of formal
standards are processed under the
published Voluntary Product Standards
Procedures of the Department. These
Procedures generally provide for
representation of producers,
distributors, users, and consumers in
the development process. In this
process, the Department acts as an
impartial arbiter in making certain
there is general concurrence, that there
is no technical or substantive
objection which has merit, and in
determining that a standard would not
be contrary to the public interest or
against the law.
The informal method of arriving at
simplified Patterns has normally
involved these steps: (1) Following an
initial study, industry representatives
are notified by NBS of the possible
existence of a proliferation problem
(2) informal conferences, involvin9
either all known producers or
representatives of all producers lead
to a determination by the industry that
the public can be served properly with
fewer quantities and with a simpler
pattern, (3) on the basis of such a
determination, producers of a product
decide informally to limit their
production to a selected quantity
pattern, and (4) NBS is informed of
104ttlis decision. In all cases,
conformance with the decision is
voluntary. The aims of the industry
are to fulfill the will of the Congress
and to remove any probability that a
finding of “undue proliferation” might
be made by the De~artment of Commerce--
both without introducing any t)ossible
antitrust problem.
Through the informal approach, which is
the approach that most frequently has
been utilized by industry, package
quantity proliferation is reduced more
rapidly than would have been possible
if the formal process, including undue
proliferation determination and
voluntary standard development, had
been followed. Utilizing both methods,
the program has resulted in newly
developed quantity patterns for
packaged goods in about 40 product
categories.
Numerous product categories are not
subject to the Act at all, or present
no apparent proliferation problem. For
example, annual retail sales of nackaged
consumer commodities approximate $131
billion, with !!58 billion worth
excluded from coverage. Another !Q5
billion represents products that are
standardized by State law or regulation,
or that are packaged in too few
of manufacturers, packers, and
distributors to participate in
in the development of a voluntary
product standard as provided in
subsection (d) of this section,
he determines that such a standard
will not be published pursuant to
the provisions of such subsection
(d), or (2) if such a standard is
published and the Secretary of
Commerce determines that. it has
not been observed, he shall
promptly report such determination
to the Congress with a statement
of the efforts that have been made
under the voluntary standards
Program and his recommendation as
to whether Congress should enact
legislation providing regulatory
authority to deal with the
situation in question.
Reporting to Congress is the final
action which the Secretary of Commerce
can take, and is intended to be a
course of last resort to be used when
the process of voluntary agreement or
compliance fails. The cooperation from
the producer segment has been such that
formal findings of undue proliferation
and subsequent reports to Congress on
lack of coo~eration or non-observance
of standards have been unnecessary.
quantities to be ~onsidered proliferated. In addition to the specific reports
This leaves about $?8 billion worth of
products subject to the Act. The fl.~
established packaqe quantity standards
represent about 50 percent of the items
subject to the proliferation provisions
of the FPLA. Discussions and
negotiations with industry, concerning
an additional 4n percent of the items
covered, are at various stages in the
standards development process, with
the remaining 10 percent under study.
REPORTING TO CONGRESS
When the Department of Commerce makes
a formal determination of undue
proliferation of a packaaed consumer
commodity, the FPLA requires the
Secretary to request the participation
of the particular industry in working
out a voluntary standard through the
procedures previously mentioned. If
this process is unsuccessful, or if a
standard is published but not observed,
this situation must be reported to
Conqress with appropriate
recommendations. These re~uirements
are set forth in Section 5(e) of the
Act as follows:
If (1) after one year after the
date on which the Secretary of
Commerce first makes the request
required by Section 5(e) the Secretary
is required to transmit a general annual
report describing the Department
activities during the precedina fiscal
year. This requirement is common to
all three agencies with responsibilities
under the Act.
COOPERATION WITH STATF
WEIGHTS AND NEAS~lRES nFFICIALS
The Act requires the Secretary of
Commerce to transmit to the States
copies of regulations promulgated by
the Federal Trade Commission and the
Food and Drug Administration. He is
also directed to furnish the States
information and help in promoting
uniformity in State and Federal
regulations in the labeling of
consumer commodities. These duties
appear in Section ~(a) which reads:
A coPy of each regulation
promulgated under this Act shall
be transmitted promptly to the
Secretary of Commerce, who shall
(1) transmit co~ies thereof to all
appro~riate State officers and
agencies, and (2) furnish to
such State officer and agencies
information and assistance to
promote to the greatest ~racti cable
105extent uniformity in State and
Federal regulations of labeling
of consumer commodities,
The National Bureau of Standards has
sponsored the National Conference on
Weights and Measures. This is a 65-year
old organization comDrised of State
and local weights and measures officials
whose main interest is in promoting
national uniformity in weiqhts and
measures laws and regulations. From
the legislative history of the Fair
Packaging and Labeling Act, it is clear
that Congress intended us to continue
to use this organization in helping to
achieve the purposes of the Act.
The cooperation function is significant
in light of section 12 of the Act which
declares it to be the express intent
of Congress to supersede State laws
which provide Iess stringent labeling
requirements of the net quantity of
contents of packages covered by the Act,
or to require information different
from that contained in section 4 of the
Act. The liaison program of the NBS
has been successful in bringing about
a large degree of uniformity between
Federal and State package labelirg
requirements to make them fully
compatible with Federal regulations and
another 8 to 10 States are somewnere in
the process. It appears to be only a
matter of time until full uniformity can
be reached. .
EDITOR’S NOTE:
The discussion following the papers
raised these issues:
1. When would the U. S. adopt the
metric system?
2. Is standardization a good thing or
does it prevent innovation and
improvement?
3. Voluntary vs. legal standards
5. Would standardization prevent
users of products from getting
the amounts they actually need?
6. What are the chances of one
uniform vehicle, container, and
and nomenclature standard?
106

THE ROLE OF THE DEPARTMENT OF COMMERCE UNDER THE FAIR PACKAGING AND LABELING ACT

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics