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FEDERAL REGISTER, Friday, June 30, 1939
couraged and promoted individually or through voluntary cooperation exercised in accordance with existing law. Nonobservance of such rules does not, per se, constitute violations o f law. Where, however, the practice of not complying with any such Group n rules is followed in such manner as to result in unfair methods of competition, or unfair or de ceptive acts or practices, corrective pro ceedings may be instituted by the Com mission as in the case of a violation of Group I rules.
R u l e A. Return of merchandise. The practice, by members of the industry, of selling ribbons and later permitting the purchaser to return the same for credit or refund of purchase price, without just cause, creates waste and loss, increases the cost of doing business to the detri ment of both the industry and the pub lic, and is condemned by the industry, subjct, however, to requirements and limitations set .forth in the provisions of Rule 14 of Group I, herein, and subject also to the general limitation that mem bers of the industry shall not engage in any combination or conspiracy in re straint of trade or use any other illegal methods in the regulation, control or prevention of the return of merchandise.
R u l e B. Maintenance of accurate rec ords. It is the judgment of the industry that each member should independently keep proper and accurate records for de termining his costs.
A committee on trade practices is here by created by the industry to cooperate with the Federal Trade Commission and to perform such acts as may be legal and proper to put these rules into effect.
Promulgated and issued by the Federal Trade Commission as of June 28,1939.
seal O t is B. J o h n s o n , Secretary.
P. R. Doc. 39-2243; Piled, June 28, 1939;
12:35 p. m.

United States of America Before Federal Trade Commission At a regular session of the Federal Trade Commission held at its office in the City of Washington, D. C., on the 26th day of June, A. D. 1939.
Commissioners: R o b e r t E. Freer, Chairman; Garland S. Ferguson, Charles H. March, Ewin L. Davis, William A.
Ayres.
Pile No. 21-316
I n t h e M atter o f T rade P r a c t ic e R u l e s fo r t h e W i n e I n d u s t r y
Promulgation Due proceedings having been held under the trade practice conference pro cedure in pursuance of the Act of Con gress approved September 26, 1914, as amended Federal Trade Commission Act, and other provisions of law ad ministered by the Commission;

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I t is now ordered, That the trade prices, or fo r the suppression o f competi practice rules of Group I and Group n , tion, or otherwise to unreasonably re as hereinafter set forth, which have been strain trade.
approved and received, respectively, by Group I
the Commission in this proceeding, be promulgated as of June 29,1939.
The unfair trade practices which are embraced in these Group I rules are Statement by the Commission considered to be unfair methods of com Trade practice rules for the Wine In petition, unfair or deceptive acts or dustry, as herein set forth, are promul practices, or other illegal practices, pro gated by the Federal Trade Commission hibited, within the purview of the Fed under its trade practice conference eral Government, by acts of Congress, as procedure.
construed in the decisions of the Federal The products of this industry consist of Trade Commission or the courts; and the various types of still and sparkling appropriate proceedings in the public in wines produced chiefly from the fer terest will be taken by the Commission mented juice of grapes; brandy, produced to prevent the use, by any person, part by the distillation of wine; and certain nership, corporation or other organiza compounds of wine, brandy and/or other tion, of such unlawful practices in or ingredients, used as beverages. Accord directly affecting interstate commerce.
ing to available information, the capitali R ule 1. Misrepresentation as to char zation of the industry, exclusive of vine acter of business. I t is an unfair trade yards and their equipment, Is approxi practice for any person, firm or corpora mately $150,000,000; the annual dollar tion to represent, directly or indirectly, value of domestic sales, about $35,000,000; that he or it is a manufacturer, pro and the average annual production of ducer or importer of wines or that he or finished wine -in the United States about it owns or controls a vineyard or vine 75,000,000 gallons.
yards wherein are grown the fruits from In the course of the proceedings an which his or its wines are produced, industry conference was held in San when such is not the fact, or in any Francisco, California, under the auspices other manner to misrepresent the char of the Federal Trade Commission, and acter, extent or type of his or its busi proposed trade practice rules were sub ness.
mitted by members of the industry. Sub R ule 2. False invoicing. Withholding sequently, tentative action was taken by from or inserting in invoices any state the Commission on the rules so submit ments or information by reason of which ted and a draft of proposed rules was omission or insertion a false record is made available, upon public notice, to all made, wholly or in part, of the transac interested or affected parties, affording tions represented on the face of such in them opportunity to present such perti voices, with the effect of thereby mis nent facts, suggestions or objections as leading or deceiving purchasers, pro they desired, and to be heard in respect spective purchasers or the consuming to the proposed rules. Accordingly, a public, is an unfair trade practice.
hearing was held in Washington and all R ule 3. Substitution of products.
matters submitted were given due con The practice of shipping or delivering sideration.
products which do not conform to speci Thereafter, and upon consideration of fications provided for in the contract or the entire matter, final action was taken order or to representations made con and the rules in the form appearing cerning such products, without the con herein under Group I and Group n were sent of the purchasers to such changes respectively approved and received by or substitutions and with the tendency the Commission.
mid capacity or effect of misleading or These rules do not in any respect sup deceiving purchasers, prospective pur plant, or relieve any member of the in chasers or the consuming public, is an dustry or other party of the necessity of unfair trade practice.
complying with, the requirements of the R ule 4. Defamation of competitors or Federal Alcohol Administration Act, or disparagement of their products. The other applicable provisions of law. They defamation of competitors by falsely im
are established under statutes adminis puting to them dishonorable conduct, tered by the Federal Trade Commission inability to perform contracts, question for the purpose of more effectively able credit standing, or by other false stamping out unfair practices in the in representations, or the false disparage terest of the industry and the public, and ment of the grade, quality or manufac to assist in general law enforcement to ture of the products of competitors or of this end.
their business methods, selling prices, th e rules values, credit terms, policies or services, These rules promulgated by the Com is an unfair trade practice.
mission are designed to foster and pro R ule 5. Im itation of trade-marks, etc.
mote fair competitive conditions in the The imitation or simulation of the trade.interest o f the industry and the public. marks, trade names, brands or labels of They are not to be used, directly or in competitors, with the tendency and ca directly, as part o f or in connection with pacity or effect of misleading or deceiv any combination or agreement to fix ing purchasers, prospective purchasers