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FTC TIGHTENS THE LACES ON SHOE COMPANY CLAIMS
Published September 21, 1994
The Federal Trade Commission said yesterday that the "Made in the U.S.A." claims of New Balance Athletic Shoe Inc. and Hyde Athletic Industries "were false because not all of the components are made here." New Balance -- which advertises shoes as "Proudly Made in the U.S.A." -- intends to fight the charges. Kathy Shepard, New Balance spokesperson: "We believe (regulators) are trying to take a new position regarding the footwear industry and make us an example." Shepard said that "about 70 percent to 75 percent of New Balance's shoe components are made in the United States, with the rest made in China and Taiwan." Hyde Athletic -- which promotes its Saucony brand as being "Built with Pride in Bangor, Maine U.S.A." -- "agreed to settle the FTC's claim without admitting or denying its charges, and "will be able to sell its current inventory of shoes with the U.S.A. labeling" (Sharon Walsh, WASHINGTON POST, 9/21). THE FEDS: FTC regulations say that to use "the 'Made in the U.S.A.' label, 'all or virtually all' of the component parts must be made domestically and 'all or virtually all' of the labor to assemble them must be performed here." C. Steven Baker, FTC regional director: "People can make things wherever they want. They just can't deceive people by saying it's all American made if it's not" (WASHINGTON POST, 9/21). DECISIONS NOT UNANIMOUS: FTC regulators voted 3-1 to cite New Balance and 3-2 "to issue the consent agreement with Hyde." Mary Azcuenaga, an FTC commissioner who dissented in both cases, "said she thought the standard for 'Made in the U.S.A.' assertions was being too strictly interpreted in the Hyde complaint" (Katherine Hobson, BLOOMBERG BUSINESS NEWS/PHILADELPHIA INQUIRER, 9/21). LET'S GO TO THE VIDEOTAPE: This morning's WALL STREET JOURNAL reports that New Balance "invited FTC officials to visit its factories before deciding on charges," but the offer was declined. Instead, New Balance "mailed a videotape of the factory process to FTC regulators" (Jeanne Sadler, WALL STREET JOURNAL, 9/21).