comparisons; that unit pricing is class regulation in that the educated and rich would benefit at the expense of the uninformed and poor; and that while compliance with such regulation will be relatively simple for the large chain and department stores, it would severely penalize small chains and the independent retailer. On the other hand, advocates of unit pricing present a number of arguments in its favor. They say that the added cost potential has been greatly exaggerated; that market discipline will control costs and spur retailers into more desirable forms of competition and that manufacturers will resort to a more sensible selection of packaging alternatives and elimination of uneconomic, confusing and deceptive package sizes, resulting in savings in manufacturing costs that can be passed on to the consumer. Information on the retail cost versus consumer benefit issue is presently being gathered by both government and industry studies in several localities.* Moreover, of possibly greater significance than cost factors to retailers or manufacturers, is the consideration that consumers may ultimately benefit by being able to make true price-value selections, both intra- and inter-brand, from among the goods in the market place, and thus afforded the possibility of lowering their individual market bills. Still another consideration is the enforcement burden which could be created by legislation directed at the 274,000 food retail outlets which carry over 8,000 items. And it should be remembered that this is only the start-other retailers, too, would be subject to this form of regulation. In sum, the Commission believes that it is too early to discern the need for federal legislation calling for mandatory unit pricing by retailers. We reach this conclusion because (1) the agencies operating under FPLA have not had sufficient opportunity to work out solutions to such problems as package proliferation and "cents off"; and (2) much more empirical data must be gathered to ascertain whether such regulation would be truly beneficial to the consumer in terms of value measured against cost. Completion of the unit pricing studies now underway, and even the possibility of federal or state legislation, are not considered by the Commission as surrogates for full and effective implementation of FPLA. With the addition of the amendments we have proposed, it is believed that the statute can work to provide accurate information and to facilitate meaningful value comparisons. FEDERAL TRADE COMMISSION, Washington, D.C., March 30, 1970. Hon. FRANK E. Moss, DEAR MR. CHAIRMAN: Attached is the corrected copy of the testimony I gave on March 23rd before the Subcommittee for Consumers. With respect to your question about how much money the Federal Trade Commission has allocated to Fair Packaging and Labeling Act activities, I think it is important to add that the figures I gave you, which I have subsequently verified, do not take into account any time spent by our field offices in surveys or investigations. As of March 1, 1970 approximately 1800 hours have been expended on Fair Packaging and Labeling Act work by our field offices and we anticipate an additional 2,000 hours or a total of about 2 man years by the field offices for FY 1970. I should also clarify the testimony I gave respecting the use of a trade regulation rule covering "economy size." To the extent that any product is not covered by Fair Packaging and Labeling Act, it may be feasible for us to use our own trade regulation rule procedure and promulgate a rule, but we have assigned priority first to a survey of covered commodities to determine whether a rule is necessary under Fair Packaging and Labeling Act procedures to regulate package size characterization in order to remove any deception which may exist. *The Commission has been following the unit pricing experiments in Berkeley, California; New York City; Todelo, Ohio; Chicago and Metropolitan Washington, D.C. The reference I made in my testimony to "present" hearings was to the related but somewhat different subject of the availability of advertised specials in disadvantaged area supermarkets. As part of our hearings on this subject, we have received statements about the limited availability of economy sizes in some inner-city stores. I hope the corrections and thus further elaboration has been helpful to the Committee. Thank you again for the courtesy and consideration shown during my appearance. With kind regards, CASPAR W. WEINBERGER, Chairman. Senator Moss. We now have the Honorable Charles C. Edwards, Commissioner, Food and Drug Administration, Department of Health, Education, and Welfare. STATEMENT OF HON. CHARLES C. EDWARDS, COMMISSIONER, FOOD AND DRUG ADMINISTRATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE; ACCOMPANIED BY WILLIAM W. GOODRICH, ASSISTANT GENERAL COUNSEL; AND JOHN GOMILLA, ASSISTANT TO THE DIRECTOR, DIVISION OF CASE GUIDANCE, BUREAU OF FOODS Dr. EDWARDS. May I first introduce my colleagues, William W. Goodrich on my left, who is General Counsel of the Food and Drug Administration; and John Gomilla on my right, who handles our activities in the fair packaging and labeling area. Senator Moss. Thank you. We are happy to have you gentlemen with us, too. You may proceed, sir. If you would like to have the whole statement put in and comment on it, you may do that, or if you would care to follow the text, whichever you would like to do. Dr. EDWARDS. I would like to highlight it if I may, eliminating some, but submitting it for the record, if we may. Senator Moss. That may be done. The entire statement will be placed in the record. Dr. EDWARDS. Mr. Chairman, we do appreciate this opportunity to be here today and to discuss with you the Food and Drug Administration's activities in administering the Fair Packaging and Labeling Act. It certainly affords us an opportunity to review with you what has been done and in our judgment what remains to be done toward fulfilling the promises of this truth-in-packaging law. In our judgment, this law has certainly been one of the more significant pieces of consumer legislation that has been enacted in recent years. Although industry spokesmen did oppose the legislation in its earlier versions, a consensus was reached and since that time food, drug, device, and cosmetic procedures have made many packaging and labeling changes to comply with the legal requirements. The intent of the act and it implementing regulations, of course, are to help consumers to know exactly what the product in the package is, who made it or distributed it, how much the package contains, what the product is made of, what it costs, and other information that will facilitate value comparisons. With the enactment of this legislation, the Food and Drug Administration found itself in the package designer's role. We were given the responsibility for seeing that the package projects the elements of the selling message. The package had to be made to serve this need in the real world of self-service merchandising. The Food and Drug Administration has the responsibility for administering the Fair Packaging and Labeling Act as applied to foods, over-the-counter drugs, medical devices, and cosmetics. None of the provisions of the Fair Packaging and Labeling Act are self-executing, but must be carried into effect by regulations promulgated under sections 4 and 5 of the act. Section 4, as you know, provides for mandatory regulations which require (1) a label statement of the identity of the product and the name and place of business of the manufacturer, the packer, or the distributor; (2) an accurate and separate statement of the net quantity of contents prominently and conspicuously presented at a uniform place on the principal display panel, and in type size relative to the size of the package, and uniform for all packages of substantially the same size; (3) the amount of each serving, if a serving statement is made; and (4) the elimination of qualifying words and phrases that tend to exaggerate the quantity of the package. The dual declaration in terms of total ounces followed by a parenthetical expression of the largest whole units was also agreed on and is required on certain containers. Random packages were allowed to bear a declaration of pounds followed if necessary, by a decimal fraction. Under section 5, the Secretary is authorized to provide exemptions from the mandatory requirements to the extent that they are unnecessary or impractical and to attach any conditions to the exemptions and to promulgate regulations, first of all, to establish and define characterizations of package sizes; to regulate, but not prohibit, the "centsoff" representations; to require ingredient statements on nonfood items; and, lastly, to prevent nonfunctional slack fill. Upon passage of the Fair Packaging and Labeling Act, the Food and Drug Administration began preparation of regulations covering food products. Food regulations were given priority because it was felt they would have a greater impact on the consumer-purchased items, and would set the labeling pattern for other commodities. It was decided to have these regulations complement the existing general regulations under the Federal Food, Drug, and Cosmetic Act, and in certain instances make these regulations more specific. For example, the regulations now require that both the statement of identity and the quantity of the contents appear on the principal display panel of consumer commodities. The regulations also require that the actual corporate name of the responsible firm be shown on the label. The proposed regulations were published in the Federal Register in March 1967. We received over 300 comments from representatives from both the Federal and State officials as well as industry representatives. All of the controversies were settled without need for a hearing, and in September 1967 the final order was published. It was apparent that nearly all of the food labels needed revision, and that the label manufacturers would be unable to revise and supply new labels by the deadline of July 1, 1968. Therefore, the Commissioner issued a statement in July 1967 prescribing the conditions by which firms, on a showing of good faith, could obtain additional time beyond July 1, 1968, to use up old labels and complete revisions. One of the conditions, of course, was that the old labels had to be in compliance with the Federal Food, Drug, and Cosmetic Act. I think the significant requirements of the regulation should be mentioned. First of all, the declaration of net contents in a specified type size in relation to the size of the package. Second, the conspicuous declaration of net contents in the bottom. 30 percent of the principal display panel in lines parallel to the base of the package as it is designed to be displayed at retail. Third, the dual declaration of net contents for consumer commodities for those weighing one or more, but less than 4 pounds or containing 1 pint or more, but less than 1 gallon. The implementation of section 4 requirements for over-the-counter drugs, medical devices, and cosmetics began with the publication of the proposed regulations in the Federal Register of August 1967. Here again it was decided to "dovetail" the Fair Packaging and Labeling Act regulations with the general regulations. This afforded us another opportunity to clarify existing regulations, particularly with respect to exemptions previously granted for small packages, and most importantly to amplify the requirements for the statement of identity on over-the-counter drugs, devices, and cosmetics. Our final order was published in June 1968 to become effective July 1, 1969. Publication of this order, however, met with certain objections. An order ruling on these objections was published on March 6, 1969, and the effective date was changed to December 31, 1969, to permit manufacturers to make the necessary label revisions. The regulations pertaining to over-the-counter drugs, devices, and cosmetics parallel those for foods with respect to the quantity of content declaration and most other major considerations. As previously stated, emphasis was placed on the requirements for the statement of identity for these products. Some of the highlights of these regulations I believe should be illustrated. First of all, the statement of identity for all over-the-counter drugs or devices will be one of the main features on the principal display panel of the package expressed either as the established name of the drug or device, if one exists, or as a statement of the pharmacological category or principal intended action of the product. If the product is an over-the-counter drug, which is a mixture with no established name, then the statement of identity must consist of the general pharmacological category or intended action of the components of the mixture in terms that are meaningful to the layman. Secondly, the regulations with respect to cosmetics, while affording a greater latitude than those for over-the-counter drugs and devices, recognize industry problems peculiar to the cosmetic industry. It does so without jeopardy to the consumer. The statement of identity for a cosmetic shall be in terms of its common or usual name, an appropri 42-476-70- 8 ate descriptive name, an appropriate illustration representing its intended use, or when the nature of the cosmetic is obvious, a name understood by the public to identify this particular cosmetic. Lastly, with respect to the quantity of contents declaration on the over-the-counter drugs or devices, a provision has been incorporated which provides the consumer with accurate information to differentiate between several strengths or sizes of the same drug or device. Section 5 of the act we are discussing today provides that products may be exempted by regulation from compliance with the act if it is either impractical or is not necessary for adequate protection of the consumers. Thus far we have exempted some 15 categories from certain of the requirements. These range from declaring quantity of contents on bulk containers in which the product is accurately weighed, measured, or counted within sight of the consumer, to the dual declaration of net weight on certain dairy products that are easily recognizable to the consumer, such as the quart or the one-half gallon of milk. In addition to the promulgation of the regulations, the Food and Drug Administration has carried out many other activities related to the Fair Packaging and Labeling Act. Most important are the meas ures taken to stimulate voluntary compliance by industry, to advise the consumer, and to work with State and other Federal officials to maximize understanding and compliance. I have in my prepared statement summarized the many speeches, the conferences, and the television appearances in which the Food and Drug Administration has been involved. I would only emphasize the very great importance of these and the fact that in our judgment they have been for the most part quite fruitful. Contacts with State officials have also been extensive. This is essential to effective enforcement of the law, since the States have traditionally enforced packaging and labeling requirements. The Food and Drug Administration initially set the stages for implementing the Fair Packaging and Labeling Act by soliciting comments from State officials as well as other Federal and industry representatives. The final order on the section 4 food regulations reflects significantly the views and suggestions of many State officials. A major effort was made to provide coordination between the various levels of government to assure the optimum in consumer protection as contemplated by the act. To this end, a series of regional conferences were held between Federal officials representing FDA, Federal Trade Commission, and the Department of Commerce, and appropriate State officials to discuss cooperatively the plan for implementation of the legislation. Nine such conferences were held with representatives from some 47 States attending. To further assist the States, a fair packaging and labeling manual was distributed to all interested State agencies in February of this year. It is here on the desk with us for your observation. Senator Moss. Do we have one of those? Dr. EDWARDS. We would be delighted to provide one. The Food and Drug Administration has also reviewed and commented on fair packaging and labeling legislation proposed by certain States. We also assisted in the preparation of the "model State |