[Federal Register Volume 63, Number 155 (Wednesday, August 12, 1998)]
[Notices]
[Pages 43180-43181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21611]


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FEDERAL TRADE COMMISSION

[File No. 982-3050]


Allied Domecq Spirits & Wine Americas, Inc. et al.; Analysis to 
Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before October 13, 1998.

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:
Lee Peeler, FTC/S-4002, Washington, DC 20580. (202) 326-3090.

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 Pracitce (16 CFR 2.34), notice is hereby 
given that the above-captioned 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. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for August 6, 1998), on the World Wide Web, at ``http://www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, NW, 
Washington, DC 20580, either in person or by calling (202) 326-3627, 
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)).

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from Allied Domecq Spirits 
& Wine Americas, Inc. and Allied Domecq Spirits & Wine USA, Inc. d/b/a 
Hiram Walker, Delaware and Michigan corporations, respectively 
(hereinafter collectively referred to as Allied).
    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.
    The Commission's complaint in this matter concerns two nearly 
identical television advertisements for Allied's Kahlua White Russian 
pre-mixed

[[Page 43181]]

cocktail. According to the complaint, these ads falsely represented 
that the product was a ``LOW ALCOHOL BEVERAGE.'' Allied has ceased 
making this representation.
    Paragraph seven of the complaint sets out several reasons why the 
Kahlua White Russian pre-mixed cocktail should not be represented as a 
low alcohol beverage. It has significant alcohol content, 11.8 proof 
(5.9% alcohol by volume), equal to or greater than numerous other 
alcohol beverages. For example, a Kahlua White Russian has 
substantially more alcohol ounce for ounce than many beers, malt 
liquors and wine coolers. For some people, drinking as few as two or 
three Kahlua White Russians will begin to impair normal functions, such 
as driving. It is also pertinent that the Bureau of Alcohol, Tobacco 
and Firearms has limited use of the term ``low alcohol,'' for the 
purposes of beer and malt liquor, to products with less than 2.5% 
alcohol by volume. The alcohol content of a Kahlua White Russian is 
substantially higher, with 5.9% alcohol by volume. Accordingly, the 
complaint alleges that the low alcohol beverage representation was 
false or misleading.
    The consent order contains provisions designed to remedy the 
violations charged and to prevent Allied from engaging in similar acts 
in the future. Part I of the order prohibits any representation that 
any beverage alcohol product containing 5.9% alcohol by volume is a low 
alcohol beverage, as well as any misrepresentation, through numerical 
or descriptive terms, or any other means, of the amount of alcohol 
contained in any beverage alcohol product. Part I of the order does not 
prohibit Allied from making any representation about the amount of 
alcohol contained in any beverage alcohol product that is specifically 
required in advertising by the Bureau of Alcohol, Tobacco and Firearms. 
Part I of the order also does not prohibit Allied from making non-
misleading claims presenting clear and accurate comparisons of the 
alcohol content of Kahlua White Russians and any other specified 
beverage alcohol product. Indeed, Commission policy encourages truthful 
comparative advertising as an important means of informing consumers 
about the relative merits of competing products. See, In Regard to 
Comparative Advertising, 15 CFR 14.15 (favoring comparative advertising 
generally); Guides for the Use of Environmental Marketing Claims, 16 
CFR 260.6(d) (guidance on comparative environmental claims); 
Enforcement Policy Statement on Food Advertising, p. 10 (1994) 
(guidance on comparative nutrient content claims).
    The remaining parts of the order contain record keeping (Part II); 
order distribution (Part III); notification of corporate change (Part 
IV); compliance report filing (Part V) and sunset (VI) provisions.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not to constitute an official interpretation 
of the agreement and proposed order or to modify in any way their 
terms.

    By direction of the Commission.
Benjamin I. Berman,
Acting Secretary.
[FR Doc. 98-21611 Filed 8-11-98; 8:45 am]
BILLING CODE 6750-01-M