[Federal Register Volume 60, Number 238 (Tuesday, December 12, 1995)]
[Notices]
[Pages 63717-63720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30216]



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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