FTC TIGHTENS THE LACES ON SHOE COMPANY CLAIMS
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