Safe Brands Corporation, Warren Distribution, Inc. and ARCO Chemical Company; Consent Agreement With Analysis to Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 942-3012]

Safe Brands Corporation, Warren Distribution, Inc. and ARCO

Chemical Company; Consent Agreement With Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting

unfair acts and practices and unfair methods of competition, this

consent agreement, accepted subject to final Commission approval, would

prohibit Safe Brands, the manufacturer of Sierra antifreeze, Warren

Distribution, its parent company, and ARCO, the supplier of the

principal ingredient in Sierra antifreeze, from making unsubstantiated

claims about the safety and environmental benefits of Sierra. They

would also be required to put a statement on Sierra containers

cautioning consumers that it may be harmful if swallowed. The

Commission alleged that the companies had claimed, without adequate

substantiation, that Sierra is absolutely safe for people and pets,

that Sierra is generally safer for the environment than conventional

antifreezes because it is biodegradable, and that Sierra and its

container are recycled.

DATES: Comments must be received on or before February 12, 1996.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

Joel Winston, Bureau of Consumer Protection, Federal Trade Commission,

S-4002, 6th Street & Pennsylvania Ave., NW., Washington, DC 20580 (202)

326-3153; Michael Dershowitz, Bureau of Consumer Protection, Federal

Trade Commission, S-4002, 6th Street & Pennsylvania Ave., NW.,

Washington, DC 20580 (202) 326-3158.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of

the Commission's Rules of Practice (16 CFR 2.34), notice is hereby

given that the following consent agreement containing a consent order

to cease and desist, having been filed with and accepted, subject to

final approval, by the Commission, has been placed on the public record

for a period of sixty (60) days. Public comment is invited. Such

comments or views will be considered by the Commission and will be

available for inspection and copying at its principal office in

accordance with Section 4.9(b)(6)(ii) of the Commission's Rules of

Practice (16 CFR 4.9(b)(6)(ii)).

United States of America Before Federal Trade Commission

In the Matter of Safe Brands Corporation, a corporation, Warren

Distribution, Inc., a corporation, and ARCO Chemical Company, a

corporation.

[File No. 942 3012]

Agreement Containing Consent Order to Cease and Desist

The Federal Trade Commission having initiated an investigation of

certain acts and practices of proposed respondents Safe Brands

Corporation, a corporation, Warren Distribution, Inc., a corporation,

and ARCO Chemical Company, a corporation, and it now appearing that

proposed respondents are willing to enter into an agreement containing

an order to cease and desist from the acts and practices being

investigated,

It is hereby agreed by and between Safe Brands Corporation, Warren

Distribution, Inc., and ARCO Chemical Company, by their duly authorized

officers, and their attorneys, and counsel for the Federal Trade

Commission that:

1. Proposed respondent Safe Brands Corporation is a corporation

organized, existing and doing business under and by virtue of the laws

of the State of Nebraska. It is a wholly-owned subsidiary of proposed

respondent Warren Distribution, Inc. Proposed respondent Warren

Distribution, Inc. is a corporation organized, existing and doing

business under and by virtue of the laws of the State of Nebraska.

Proposed respondents Safe Brands Corporation and Warren Distribution,

Inc. have their principal offices or places of business at 727 South

13th Street, Omaha, Nebraska 68102.

Proposed respondent ARCO Cemical Company is a corporation

organized, existing and doing business under and by virtue of the law

of the State of Delaware with its principal office or place of business

at 3801 West Chester Pike, Newtown Square, Pennsylvania 19073.

[[Page 63718]]

2. Proposed respondents admit all the jurisdictional facts set

forth in the draft of complaint here attached.

3. Proposed respondents waive:

(a) Any further procedural steps;

(b) The requirement that the Commission's decision contain a

statement of findings of fact and conclusions of law; and

(c) All rights to seek judicial review or otherwise to challenge or

contest the validity of the order entered pursuant to this agreement.

4. This agreement shall not become a part of the public record of

the proceeding unless and until it is accepted by the Commission. If

this agreement is accepted by the Commission, it, together with the

draft of the complaint contemplated hereby, will be placed on the

public record for a period of sixty (60) days and information in

respect thereto publicly released. The Commission thereafter may either

withdraw its acceptance of this agreement and so notify proposed

respondents, in which event it will take such action as it may consider

appropriate, or issue and serve its complaint (in such form as the

circumstances may require) and education, in disposition of the

proceeding.

5. This agreement is for settlement purposes only and does not

constitute an admission by proposed respondents that the law has been

violated as alleged in the attached draft complaint or that the facts

as alleged in the attached draft complaint, other than the

jurisdictional facts, are true.

6. This agreement contemplates that, if it is accepted by the

Commission, and if such acceptance is not subsequently withdrawn by the

Commission pursuant to the provisions of Sec. 2.34 of the Commission's

Rules, the Commission may without further notice to proposed

respondents, (1) issue its complaint corresponding in form and

substance with the draft complaint here attached and its decision

containing the following order to cease and desist in deposition of the

proceeding, and (2) make information public in respect thereto. When so

entered, the order to cease and desist shall have the same force and

effect and may be altered, modified or set aside in the same manner and

within the same time provided by statute for other orders. The order

shall become final upon service. Delivery by the U.S. Postal Service of

the decision containing the agreed-to order to proposed respondents'

address as stated in this agreement shall constitute service. Proposed

respondents waive any right they might have to any other manner of

service. The complaint may be used in construing the terms of the

order, and no agreement, understanding, representation, or

interpretation not contained in the order or in the agreement may be

used to vary or contradict the terms of the order.

7. Proposed respondents have read the proposed complaint and the

order contemplated hereby. They understand that once the order has been

issued, they will be required to file one or more compliance reports

showing they have fully complied with the order. Proposed respondents

further understand that they may be liable for civil penalties in the

amount provided by law for each violation of the order after it becomes

final.

Order

Definition

For purposes of this Order, the following definition shall apply:

``Competent and reliable scientific evidence'' means tests,

analyses, research, studies or other evidence based on the expertise of

professionals in the relevant area, that has been conducted and

evaluated in an objective manner by persons qualified to do so, using

procedures generally accepted in the profession to yield accurate and

reliable results.

I

It is ordered that respondents, Safe Brands Corporation, a

corporation, Warren Distribution, Inc., a corporation, and ARCO

Chemical Company, a corporation, their successors and assigns, and

their officers, representatives, agents, and employees, directly or

through any corporation, subsidiary, division, or other device, in

connection with the advertising, labeling, promotion, offering for

sale, sale, or distribution of any antifreeze, coolant, or deicer

product in or affecting commerce, as ``commerce'' is defined in the

Federal Trade Commission Act, do forthwith cease and desist from

representing, in any manner, directly or by implication, that any such

product will not harm the environment, is less harmful to the

environment than other products, or offers any environmental benefit,

unless at the time of making such representation, respondents possess

and rely upon competent and reliable evidence, which when appropriate

must be competent and reliable scientific evidence, that substantiates

such representation.

II

It is further ordered that respondents, Safe Brands Corporation, a

corporation, Warren Distribution, Inc., a corporation, and ARCO

Chemical Company, a corporation, their successors and assigns, and

their officers, representatives, agents, and employees, directly or

through any corporation, subsidiary, division, or other device, in

connection with the advertising, labeling, promotion, offering for

sale, sale, or distribution of any antifreeze, coolant, or deicer

product in or affecting commerce, as ``commerce'' is defined in the

Federal Trade Commission Act, do forthwith cease and desist from making

any representation, in any manner, directly or by implication, about

the safety or relative safety of such product for humans or animals

unless, at the time of making such representation, respondents possess

and rely upon competent and reliable scientific evidence that

substantiates such representation.

III

It is further ordered that respondents, Safe Brands Corporation, a

corporation, Warren Distribution, Inc., a corporation, and ARCO

Chemical Company, a corporation, their successors and assigns, and

their officers, representatives, agents, and employees, directly or

through any corporation, subsidiary, division, or other device, in

connection with the labeling, offering for sale, sale, or distribution

of any propylene glycol-based antifreeze or coolant product in or

affecting commerce, as ``commerce'' is defined in the Federal Trade

Commission Act, shall disclose on the front of the container of all

such products the following:

``See Back Panel for CAUTIONARY INFORMATION''

and shall disclose on the back of the container of all such products

the following:

``CAUTIONARY INFORMATION: This Product MAY BE HARMFUL IF SWALLOWED.

STORE SAFELY AWAY FROM CHILDREN AND PETS. Do not store in open or

unlabeled containers.''

Each disclosure shall be in a conspicuous and prominent place on

the container, in conspicuous and legible type in contrast by

typography, layout, or color with all other printed material on the

container. The disclosure on the back of the container shall be

surrounded by a one (1) point rule. The disclosure on the front of the

container and the first two sentences of the disclosure on the back of

the container shall be in type at least as large as the largest print

type on the back of the container, but, in any case,

[[Page 63719]]

no smaller than ten (10) point type. The words ``CAUTIONARY

INFORMATION'' on the front and back of the container shall be in bold

type. The last sentence of the disclosure on the back of the container

shall be in type at least as large as the type in which the majority of

the printed material on the back of the container is printed.

The back of the container shall also contain the following

statement, printed in type at least as large as the type in which the

majority of the printed material on the back of the container is

printed:

``Clean up any leaks or spills.''

IV

It is further ordered that respondents, Safe Brands Corporation, a

corporation, Warren Distribution, Inc., a corporation, and ARCO

Chemical Company, a corporation, their successors and assigns, and

their officers, representatives, agents, and employees, directly or

through any corporation, subsidiary, division, or other device, in

connection with the advertising, labeling, promotion, offering for

sale, sale, or distribution of any antifreeze, coolant, or deicer

product in or affecting commerce, as ``commerce'' is defined in the

Federal Trade Commission Act, do forthwith cease and desist from

representing, in any manner, directly or my implication, the level of

vehicular engine protection provided by any such product, unless at the

time of making such representation, respondents possess and rely upon

competent and reliable scientific evidence that substantiates such

representation.

V

It is further ordered that respondents, Safe Brands Corporation, a

corporation, Warren Distribution, Inc., a corporation, and ARCO

Chemical Company, a corporation, their successors and assigns, and

their officers, representatives, agents, and employees, directly or

through any corporation, subsidiary, division, or other device, in

connection with the advertising, labeling, promotion, offering for

sale, sale, or distribution of any antifreeze, coolant, or deicer

product in or affecting commerce, as ``commerce'' is defined in the

Federal Trade Commission Act, do forthwith cease and desist from

misrepresenting, in any manner, directly or by implication, the extent

to which:

A. Any such product or its package is capable of being recycled;

or,

B. Recycling collection programs for such product or its package

are available.

VI

It is further ordered that the provisions of this Order shall not

apply to any label or labeling printed prior to the date of service of

this Order and shipped by respondents to distributors or retailers

prior to one hundred (100) days after the date of service of this

Order.

VII

It is further ordered that for five (5) years after the last date

of dissemination of any representation covered by this Order,

respondents, or their successors and assigns, shall maintain and upon

request make available to the Federal Trade Commission for inspection

and copying:

A. All materials that were relied upon in disseminating such

representation; and

B. All tests, reports, studies, surveys, demonstrations, or other

evidence in their possession or control that contradict, qualify, or

call into question such representation, or the basis relied upon for

such representation, including complaints from consumers.

VIII

It is further ordered that respondents shall distribute a copy of

this Order to each of their operating divisions and to each of their

officers, agents, representatives, or employees engaged in the

preparation and placement of advertisements, promotional materials,

product labels or other such sales materials covered by this order.

IX

It is further ordered that respondents shall notify the Commission

at least thirty (30) days prior to any proposed change in the

corporations such as a dissolution, assigned, or sale resulting in the

emergence of a successor corporation, the creation or dissolution of

subsidiaries, or any other change in the corporations which may affect

compliance obligations under this Order.

This Order will terminate twenty years from the date of its

issuance, or twenty years from the most recent date that the United

States or the Federal Trade Commission files a complaint (with or

without an accompanying consent decree) in federal court alleging any

violation of the Order, whichever comes later; provided, however, that

the filing of such a complaint will not affect the duration of:

A. Any paragraph in this Order that terminates in less than twenty

years;

B. This Order's application to any respondent that is not named as

a defendant in such complaint; and

C. This Order if such complaint is filed after the Order has

terminated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a federal

court rules that the respondent did not violate any provision of the

Order, and the dismissal or ruling is either not appealed or upheld on

appeal, then the Order will terminate according to this paragraph as

though the complaint was never filed, except that the order will not

terminate between the date such complaint is filed and the later of the

deadline for appealing such dismissal or ruling and the date such

dismissal or ruling is upheld on appeal.

It is further ordered that respondents shall, within sixty (60)

days later service of this Order upon them, and at such other times as

the Commission may require, file with the Commission a report, in

writing, setting forth in detail the manner and form in which they have

complied with this Order.

Benjamin I. Berman,

Acting Secretary.

Analysis of Consent Order To Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from respondents Safe

Brands Corporation, Warren Distribution, Inc., and ARCO Chemical

Company.

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement and take other appropriate action, or make

final the agreement's proposed order.

This matter concerns the labeling and advertising of Sierra

Antifreeze-Coolant (``Sierra''), a propylene glycol-based automobile

antifreeze marketed by Safe Brands Corporation and its parent company,

Warren Distribution, Inc. The Commission's complaint in this matter

alleges that ARCO Chemical Company sold the propylene glycol (``PG'')

used in the manufacture of Sierra and provided information for,

participated in the preparation of, paid for, and reviewed and/or

approved Sierra advertising and promotional materials. The complaint

also alleges that ARCO Chemical itself disseminated advertisements

under its own name for PG antifreeze generally.

The Commission's complaint charges that the respondents claimed in

advertising and promotional materials

[[Page 63720]]

that compared to conventional, ethylene glycol-based antifreeze (``EG

antifreeze''), Sierra and other PG antifreezes are safer for the

environment generally. According to the complaint, although respondents

had a reasonable basis that Sierra and other PG antifreezes, compared

to EG antifreeze, are less toxic, and therefore safer for that part of

the environment that is composed of humans, pets, and wildlife that may

accidentally ingest it, respondents did not substantiate their claim

that Sierra and other PG antifreezes are safer for the environment

generally (e.g., the air, water, soil, plants, or aquatic life). The

complaint also alleges that respondents represented without adequate

substantiation that Sierra and other PG antifreezes are absolutely safe

for the environment after ordinary use and that because Sierra and

other PG antifreezes are biodegradable, they are absolutely safe for

the environment after ordinary use. The complaint states that one

reason these claims are unsubstantiated is that used antifreeze,

whether EG or PG-based, may contain lead and/or other substances that

are hazardous to the environment.

Furthermore, the complaint charges that the respondents represented

without adequate substantiation that Sierra and other PG antifreezes

are absolutely safe for people and pets. The complaint also charges

that respondents claimed without adequate substantiation that because

Sierra and other PG antifreezes contain PG--an ingredient designated by

the Food and Drug Administration as ``generally recognized as safe''

and which is found in foods, drugs, cosmetics, and pet foods--they are

absolutely safe for people and pets. According to the complaint,

although respondents had a reasonable basis that Sierra and other PG

antifreezes are safer than EG antifreeze, respondents lacked

substantiation for the claim that they are absolutely safe.

In addition, the complaint alleges that the respondents made the

unsubstantiated representation that compared to conventional, EG

antifreeze, Sierra provides superior automotive protection from

freezing temperatures, boil-overs, and corrosion.

Finally, the complaint charges that the respondents falsely and

without adequate substantiation represented that Sierra antifreeze and

its plastic container are recyclable. In fact, the complaint alleges,

while both Sierra and its container are capable of being recycled, the

vast majority of consumers cannot recycle either of them because there

are few collection facilities nationwide that accept PG antifreeze or

high-density polyethylene plastic antifreeze containers for recycling.

The proposed consent order contains provisions designed to remedy

the violations charged and to prevent the respondents from engaging in

similar acts and practices in the future.

Part I of the proposed order requires the respondents to cease and

desist from representing that any antifreeze, coolant, or deicer

product will not harm the environment, is less harmful to the

environment than other products, or offers any environmental benefit,

unless the respondents possess competent and reliable evidence, which

when appropriate must be competent and reliable scientific evidence,

that substantiates the representation.

Part II of the proposed order requires the respondents to cease and

desist from making any representation about the safety or relative

safety for humans or animals of any antifreeze, coolant, or deicer

product, unless they possess competent and reliable scientific evidence

that substantiates the representation.

Part III of the proposed order requires that the respondents print

the following two statements on the back of containers of all PG

antifreeze or coolant products: ``CAUTIONARY INFORMATION: This Product

MAY BE HARMFUL IF SWALLOWED. STORE SAFELY AWAY FROM CHILDREN AND PETS.

Do not store in open or unlabeled containers'' and ``Clean up any leaks

or spills.'' On the front of all such containers the following must be

disclosed: ``See Back Panel for CAUTIONARY INFORMATION.'' Part III also

specifies the manner in which these disclosures must be made.

Part IV of the proposed order requires the respondents to cease and

desist from making any representation about the level of vehicular

engine protection provided by any antifreeze, coolant, or deicer

product, unless the respondents possess competent and reliable

scientific evidence that substantiates the representation.

Part V of the proposed order requires that the respondents cease

and desist from misrepresenting the extent to which any antifreeze,

coolant, or deicer product or its package is capable of being recycled

or the extent to which recycling collection programs are available.

Part VI of the proposed order provides that, for up to 100 days

after the service of the order, respondents may continue to ship

products from existing stock in containers with nonconforming labeling.

The proposed order also requires the respondents to maintain

materials relied upon to substantiate the claims covered by the order,

to distribute copies of the order to certain company officials, to

notify the Commission of any changes in corporate structure that might

affect compliance with the order, and to file one or more reports

detailing compliance with the order. The order also contains a

provision stating that it will terminate after twenty (20) years absent

the filing of a complaint against respondents alleging a violation of

the order.

The purpose of this analysis is to facilitate public comment on the

proposed order. It is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way their terms.

[FR Doc. 95-30216 Filed 12-11-95 8:45 am]

BILLING CODE 6750-01-M