Broadcasting Telecasting (Apr-Jun 1958)

FTC Hears Argument On In-Store Plans The Federal Trade commissioners have heard arguments on six grocery manufacturers' appeal from an FTC examiner's recommendation to prohibit them from using broadcast in-store promotion plans unless all store customers can participate [Government, July 30, 1956, et seq.]. The proposed order threatens the time-for-display swap widely used by broadcasters in grocery merchandising. Respondents in the consolidated case are General Foods Corp., Groveton Paper Co., Hudson Pulp & Paper Corp., P. Lorillard Co., Piel Bros. Inc. and Sunshine Biscuits Inc. Their attorney, Cyrus Austin of New York, called the FTC examiner's conclusion that they "were the true sponsors" of chain-store merchandising plans by network-owned stations "speculative and remote." The argument took place March 26. He emphasized the government and respondents have stipulated that contracts were made independently between broadcasters and advertisers and between broadcasters and stores. Advertisers were solicited by means of station brochures which referred to agreements already in effect with chain groceries, the lawyer said. An analogy of a whistle premium contained in a box of breakfast food was drawn to support the grocery suppliers' appeal. To say that advertisers supported broadcasters' store promotions is equivalent to saying that a housewife who bought the breakfast food made payment for the benefit of the whistle maker, he said. J. Wallace Adair of the FTC, arguing for adoption of Hearing Examiner Abner E. Lipscomb's initial decision, said the Robinson-Patman Act prohibits disproportionate benefits to customers whether achieved directly or indirectly. The respondents did in effect support the store promotion plans because broadcasters had short-term cancellation options in their contracts with chain stores, he said. He answered arguments on contractual aspects of the question by saying the case was concerned with public law, not contract law. Commenting on the "devious scheme" to grant promotional favors to chain stores, Mr. Adair said that CBS, which filed an amicus curiae brief, and the respondents seemed to be saying that the government cannot reach broadcasters in this instance and cannot reach the respondents because they were operating through broadcasters. Asked by a commissioner if the in-store plans were "hard-hitting and successful," the prosecutor replied that they started in 1951 and still were going on. A. W. DeBirny, attorney for Sunshine Biscuit Inc. and formerly on the FTC staff, appeared before commissioners to protest that the form of the proposed FTC order to cease is too severe and doesn't furnish specific advice and guidance. It was "outrageous" for the commission to issue the complaints without notice, he said, continuing that Sunshine ceased using the displays immediately on receiving the complaint. From the winner of the ^RTETY SHOWMANAGEMENT AWARD (For the Re-Birth of Radio!) To the George Foster Peabody In the category of Public Service and Human Relations / congratulations I We're proud of our sister operation, KLZ-TV for being the first and only Colorado TV or Radio station to win this highly coveted award for distinguished and meritorious public service (for "Panorama"). Another outstanding example of KLZ's programming in the public interest. KLZ-Radio's DENVER AT NIGHT ... PARTY LINE and other personality shows — winners of the Variety Showmanagement Award — are better than ever with SELLING showmanship. REPRESENTED BY THE KATZ AGENCY 560 Kc CBS FOR THE ROCKY MOUNTAIN AREA Broadcasting April 14, 1958 • Page 63