Federal Trade Commission Recieved Documents Jan. 16, 1996 P894219 B18354900039 Via Overnight Carrier January 15, 1996 Office of the Secretary Federal Trade Commission Room 159 6th Street and Pennsylvania Avenue, N.W. Washington, D.C. 20580 RE: Made in USA Policy Comment FTC File No. P894219 Dear Sirs and Mesdames: This letter responds to the U.S. Federal Trade Commission's ("FTC") request for comments on its policy as it relates to the use of unqualified "Made in USA" claims. Sunbeam Corporation ("Sunbeam") is a leading consumer products company that develops, manufactures, and markets a diverse portfolio of outdoor, household and specialty brand name products. Sunbeam enjoys a long-standing reputation for the quality of its products and its concern for consumers. The Federal Trade Commission (FTC) is directed to prevent unfair or deceptive acts and practices. A deceptive act or practice has been defined by the FTC as one that is likely to mislead consumers acting reasonably under the circumstances. Contrary to this criteria, the FTC's current policy requires that a product be wholly manufactured in the United States from materials and components that originate in their entirety from this country, in order to label or advertise the product as "Made in USA." Sunbeam shares with the FTC its concern for consumers. However, the current FTC standards prevent consumers from making an informed choice and has a negative economic impact on American manufacturing companies. The current policies, which were largely developed in the 1960's, are not applicable to today's marketplace. Business conditions and consumer expectations have changed since such time. Consumers today desire the opportunity to purchase products which are mostly made of American parts and labor. The current FTC policy makes it difficult for consumers to distinguish between a product that consists of an insignificant amount of foreign components or materials from one that is mostly of foreign origin and imported into the United States. Sunbeam is committed to continuing to manufacture products in the United States, and to this end has recently opened a 725,000 square feet manufacturing and distribution facility in Hattiesburg, Mississippi. While manufactured or assembled in the United States, a number of our products cannot be advertised as "Made in USA" because some small component is sourced from overseas. In some cases, the overseas company is a division of Sunbeam or another American company. Consequently, the current FTC policy interferes in the marketplace by not allowing the maximum economic value to be captured by manufacturers who are trying to sell American-made consumer products. Sunbeam employees informally monitor consumer perceptions through focus groups on individual products, labelling, and packaging. Based on this information, Sunbeam believes that neither a majority of consumers nor a significant minority of consumers are mislead by products marked "Made in USA," even though they are not entirely manufactured and/or assembled in the United States. Consequently, the FTC should alter its legal standard regarding the use of unqualified "Made in USA" claims. Sunbeam believes a 75% threshold test would satisfy the perceptions of the average consumer with regard to "Made in USA" claims. Therefore, Sunbeam supports the policy of using the "Made in USA" mark when at least seventy-five (75%) percent of the cost of the product is attributable to component parts that were made in the United States, and at least seventy-five (75%) percent of the cost of the labor performed in assembling the product into the form in which it is so introduced, delivered, sold, offered, or advertised was incurred in the United States. Sunbeam appreciates the opportunity to comment on this important issue. Very truly yours, Adrienne F. Cornejo Group Counsel January 15, 1996 Office of the Secretary Federal Trade Commission Room 159 Sixth Street and Pennsylvania Avenue, N.W. Washington, D.C. 20580 RE: Made in USA Workshop-Request to Participate FTC File No. P894219 Dear Sirs or Mesdames: Sunbeam Corporation, a leading consumer products company, respectfully requests to participate in the public workshop on the use of "Made in USA" claims in product advertising and labeling. Included with this request are Sunbeam Corporation's comments on the issue. It is our understanding that the public workshop has been scheduled for March 26-27, 1996 in Washington, D.C. For notification purposes, I can be reached at (305) 767-2100 and my fax number is (305) 767-2105. Thank you for your consideration of Sunbeam Corporation's request to participate in the Federal Trade Commission's public workshop on this important issue. Very truly yours, Adrienne F. Cornejo Group Counsel