Irish Hills Distilleries, Inc

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lN THE MA TT:F:R OF IRISH HILLS DISTILLERIES, INC.

COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 216f. Complaint, Jwne 27, 1935-Decision, Nov. 20, 1936 Where a corporation engaged as wholesaler and rectifier of distilled spirits, in purchasing, rectifying, blending, and bottling whiskies, gins, and other S}Jirituous beverages and in selling the same to wholesale and retail purchasers in other States and in the District of Columbia, in substantial competition with those engaged in the manufacture by distillation of such beverages and in selling the same as aforesaid, and with those engaged in purchasing, rectifying, blending, bottling, and selling such beverages, and including among its aforesaid competitors those who, as manufacturers and distillers from mash, wort, or wash of whiskies, gins, and other spirituous beverages sold by them, truthfully use words "distillery," "uistilleries," "distillers," or "distilling" as a part of their corporate or trade names and on their stationery and advertising and on the labels of the bottles in which they sell and ship such products, and those who, engaged in purchasing, rectifying, blending, bottling, and selling such beverages, do not use such words as aforesaid- Represented, through use of word "Distilleries" in its corporate name, printed on its stationery and advertising and on the labels attached to the bottles in which it sold and shipped its said products, and In various other ways, to its customers a11d supplied the same with means of reprPsPntlng to their vendee-retailers and ultimate consuming public that It was a distiller and that the whiskies, gins, and other spirituous beverages contained in such bottles were by it made through pro<·ess of distlllat!on from mash, wort, or wash, notwithstanding fact it did not thus distill such beverugl'S through continuous closed pipes and vessels until manufacture thereof is complete, as definitely understood and Implied to the trade and lJltimate purchasing public from word "Distilleries," did not own, Ol)erate, or control any place or places where such beverages are made by process of distilla· tion as abo,·e set forth, and was not a distiller, the products of which are preferentially bought by a substantial portion of the purchasing public; With Pffect of misleading aud deceiving dealers and such public into the beliet that it was a distiller and that the whiskies, gins, and other spirituous beverages sold by it were by it made and dlstillPd from mash, wort, or wash as aforesaid, and of inducing dealers and purchasing public, acting in such belief, to buy its said whisk!Ps and other saitl bevernges, bottled and sold by it, and thereby divert trade to It from its competitors who do not, by their corporate or trade names or in any other manner, mlst·ppre sent that they are manufacturers by distillation as aforesaid of whiskies, gins, and other spirituous beverages; to the substantial injury of competition In commerce :

Complaint 23F.T.C.

Held, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before Jfr. John L. Hornor, trial examiner. Mr. PGad B. More house for the Commission.

Co:M:PI.AINT Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission, having reason to believe that Irish Hills Distilleries, Inc., hereinafter referred to as respondent, has been and is using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appearing to the said Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows :

PARAGRAPH 1. Respondent is a corporation organized, existing, and doing business under the laws of the State of Michigan, with its office and principal place of business in the city of Detroit, in said State. It is now, and for more than one year last past has been, engaged in the business of wholesaler and rectifier, purchasing, rectifying, blending, and bottling whiskies, gins, and other spirituous beverages and in the sale thereof in constant course of trade and commerce between and among the various States of the United States and in the District of Columbia. In the course and conduct of its said business, it causes its said products when sold to be transported from its place of business aforesaid into and through various States of the United States to the purchasers thereof, consisting of wholesalers and retailers, located in other States of the United States and the District of Columbia. In the course and conduct of its business as aforesaid, respondent is now, and for more than one year last past has been, in substantial competition with other corporations and with individuals, partnerships, and firms engaged in the manufacture by distillation of whiskies, gins, and other spirituous beverages and in the sale thereof in trade and commerce between and among the various States of the United States and in the District of Columbia; and in the course and conduct of its business as aforesaid, respondent is now, and for more than one year last past has been, in substantial competition with other corporations, and with individuals, firms, and partnerships engaged in the business of purchasing, rectifying, blending, and bottling whiskies, gins, and other spirituous beverages and in the sale thereof in commerce between and among the various States of the United States and in the District of Columbia. IRISH HILLS DISTILLERIES, INC. 957 Complaint ~ PAR. 2. For a long period of time the word "Distilleries" when used in connection with the liquor industry and the products thereof has had and still has a definite significance and meaning to the minds ()£ the wholesalers and retailers in such industry and to the ultimate Purchasing public, to wit, the places where such liquors are manu- ~actured by the process of original and continuous distillation from mash, wort, or wash, through continuous closed pipes and vessels until the manufacture thereof is completed; and a substantial portion of the purchasing public prefers to buy spirituous liquors prepared and bottled by distillers.

PAR. 3. In the course and conduct of its business as aforesaid, by the use of the word "Distilleries" in its corporate name, printed on its stationery and advertising, and on the labels attached to the bottles in which it sells and ships its said products, and in various other Ways, respondent represents to its customers and furnishes them with the means of representing to their vendees, both retailers and the ultimate consuming public, that it is a distiller and that the whiskies, gins, and other spirituous beverages therein contained were by it manufactured through the process of distillation from mash, wort, or wash, as aforesaid, when, as a matter of fact, respondent is not a distiller, does not distill the said whiskies, gins, or other spirituous beverages by it so bottled, labeled, sold, and transported, and does not own, operate, or control any place or places where such beverages are manufactured by the process of distillation from mash, wort, or wash.

PAR. 4. There are among the competitors of respondent engaged in the sale of spirituous beverages as mentioned in paragraph 1 hereof corporations, firms, partnerships, and individuals who manufacture and distill from mash, wort, or wash, as aforesaid, whiskies, gins, and other spirituous beverages sold by them and who truthfully Use the words "distillery," "distilleries," "distillers," or "distilling" as a part of their corporate or trade names and on their stationery and advertising, and on the labels of the bottles in which they sell and ship such products. There are also among such competitors cor- Porations, firms, partnerships, and individuals engaged in the business of purchasing, rectifying, blending, bottling, and selling Whiskies, gins and other spirituous beverages who do not use the Words "distillery," "distilleries,'' "distilling," or "distillers" as a part ?f their corporate or trade names, nor on their stationery or advertis- Jng, nor on the labels attached to the bottles in which they sell and ship their said products.

PAR. 5. Representation by respondent as set forth in paragraph 3 hereof, is calculated to and has the capacity and tendency to and does Findings 23F. T. C..

mislead and deceive dealers and the purchasing public into the beliefsthat respondent is a distiller and that the whiskies, gins, and other spirituous beverages sold by the respondent are manufactured and distilled by it from mash, wort, or wash, as aforesaid, and is calculated to and has the capacity and tendency to and does induce dealers 'and the purchasing public, acting in such beliefs, to purchase the whiskies, gins, and other spirituous beverages bottled and sold by the respondent, thereby diverting trade to respondent from its com· petitors who do not by their corporate or trade names or in any othermanner misrepresent that they are manufacturers by distillation from mash, wort, or wash, of whiskies, gins, and other spirituous. beverages, and thereby respondent does substantial injury to substantial competition in interstate commerce. PAR. 6. The acts and things above alleged to have been done and the false representations alleged to have been made by respondent are to the prejudice of the public and the competitors of respondent and constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. REPORT, FJNDINOS AS TO THE FACTs, AND OnnER Pursuant to the provisions of an Act of Congress approved Sep· tember 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," the Federal Trade Commission on June 27, 1935, issued and on June 29, 1935, served its complaint in this proceeding upon respond· ent, Irish Hills Distilleries, Inc., charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. After the issuance of said complaint, and the filing of the respondent's answer, the Commission, by order entered herein, granted respondent's motion for permission to withdraw said answer and to substitute therefore an answer admitting all the material allegrrtions of the complaint to be true, and waiving the taking of further evi· dence and all other intervening procedure, which substitute answer was duly filed in the office of the Commission. Thereafter, this pro· ceeding regularly came on for final hearing before the Commission on the said complaint and the substituted ansv>er, briefs and oral arguments of counsel having been waived, and the Commission, having duly considered the same and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom:

IRISH HILLS DISTILLERIES, INC.

'955 Findings FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent is a corporation organized, existing, and doing business under the laws of the State of Michigan, with its office and principal place of business at 439 East Congress Street, in the ·city of Detroit, in said State. It is now, and for more than one year last past has been, engaged in business under a basic permit from the United States Government, which permit is designated "R-42C," as :a wholesaler and rectifier of distilled spirits, purchasing, rectifying, blending, and bottling whiskies, gins, and other spirituous beverages and in the sale thereof in constant course of trade and commerce between and among the various States of the United States and in the District of Columbia. In the course and conduct of its said business, it causes its said products when sold to be transported from its place of business aforesaid into and through various States of the United States to the purchasers thereof, consisting of wholesalers and retailers, located ir. other States of the United States and the District of Columbia. In the course and conduct of its business as aforesaid, respondent is now, and for more than one year last past has been, in substantial competition with other corporations and with individuals, partnerships, and firms engaged in the manufacture by distillation of whiskies, gins, and other spirituous beverages and in the sale thereof in trade and commerce between and among the various States of the United States and in the District of Columbia; and in the course and conduct of its business as aforesaid1 respondent is now, and for more than one year last past has been, in substantial competition with other corporations, and with individuals, firms, and partnerships engaged in the business of purchasing, rectifying, blending, and bottling whiskies, gins, and other spirituous beverages nnd in the sale thereof in commerce between and among the various ~~ates of the United States and in the District of Columbia. PAR. 2. For a long period of time the word "Distilleries" when Used in connection with the liquor industry and the products thereof has had, and still has, a definite significance and meaning to the minds of the whoiesalers and retailers in such industry and to the ultimate purchasing public, to wit: the places where such liquors are manufactured by the process of original and continuous distillation from •mash, wort, or wash, through continuous closed pipes and vessels until the manufacture thereof is completed; and a substantial Portion of the purchasing public prefers to buy spirituous liquors Prepared and bottled by distillers.

PAR. 3. In the course and conduct of its business as aforesaid, by the use of the word "Distilleries" in its corporate name, printed on its shnionery and advertising, and on the labels attached to the Findings 23F.T,C.

bottles in which it sells and ships its said products, and in various other ways, respondent represents to its customers and furnishes them with the means of representing to their vendees, both retailers and . the ultimate consuming public, that it is a distiller and that the whiskies, gins, and other spirituous beverages therein contained were by it manufactured through the process of distillation from mash, wort, or wash, as aforesaid, when, as a matter of fact, respondent is not a distiller, does not distill the said whiskies, gins, or other spirituous beverages by it so bottled, labeled, sold, and transported, and does not own, operate, or control any place or places where such beverages are manufactured by the process of distillation from mash, wort, or wash.

PAR. 4. There are among the competitors of respondent engaged in the sale of spirituous beverages as mentioned in paragraph 1 hereof corporations, firms, partnerships, and individuals who manufacture and distill from mash, wort, or wash, as aforesaid, whiskies, gins and other spirituous beverages sold by them and who truthfully use the words "distillery," "distilleries," "distillers," or "distilling" as a part of their corporate or trade names and on their stationery and advertising, and on the labels of the bottles in which they sell and ship such products. There are also ::unong such competitor:> corporaticm, firms, partnerships, and individuals engaged in the business of purchasing, rectifying, blending, bottling, and selling whiskies, gins, and other spirituous beverages who do not use the words "distillery," distilleries," "distilling," or "distillers" as a part of their corporate or trade names, or on their stationery or advertising, or on the labels attached to the bottles in which they sell and ship their said products. PAn. 5. Representation by respondent as set forth in paragraph 3 hereof, is calculated to, and has the capacity and tendency to, and does mislead and deceive dealers and the purchasing public into the beliefs that respondent is a distiller and that the whiskies, gins, and other spirituous beverages sold by the respondent are manufactured and distilled by it from mash, wort, or wash, as aforesaid, and is calculated to, and has, the capacity and tendency to, and does induce dealers and the purchasing public, acting in such beliefs, to purchaso the whiskies, gins, and other spirituous beverages bottled and sold by the respondent, thereby diverting trade to respondent frOill its competitors, who do not by their corporate or trade names, or in any other manner, misrepresent that they are manufacturers by distilla· tion from mash, wort, or wash, of whiskies, ~ins, and other spirituous beverages, and thereby respondent dor.s substantial injury to competition in interstate commerce.

IRISH HILLS DISTILLERIES, INC. 961 955 Order CONCLUSION The aforesaid acts and practices of the respondent, Irish Hills Distilleries, Inc., are to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in commerce, within the intent and meaning of Section 5 of an Act of Congress, approved September 26, 1914, entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer filed herein, dated October 19, 1036, by respondent admitting all the :material allegations of the complaint to be true and waiving the taking of further evidence and all other intervening procedure, and the Commission having made its findings as to the facts and its conclusion that said. respondent has violated the provisions of an ~ct of Congress approved September 26, 1914, entitled "An Act to 7reate a Federal Trade Commission, to define its powers and duties, and for other purposes."

! 'It. is ordered, That the respondent, Irish Hills Distilleries, Inc., Its officers, representatives, agents, and employees, in connection with th~ offering for sale, sale and _distribution of whiskies, gins, or other spirituous beverages, in interstate commerce or in the District of Columbia, do forthwith cease and d.desist from: Representing, through the>; use of the word "Distillrries" in its corporate name, on its stationery, advertising or on the labels attached to the bottles in which it sells and ships said products, or in a~y. other way by word or words of like import, (a) that it is a distiller of whiskies, gins, or other spirituous beverages; or (b) that the said whiskies, gins, or other spirituous beverages were by it manufactured through the process of distillation; or (c) that it owns, ~Pe;ates, or controls a place or places where any such products are / It manufactured by a process of original and continuous distillalon from mash, wort or wash, through continuous closed pipes and vessels until the manufacture thereof is completed, unless and until respondent shall actually own, operate, or control such a place or places. 1 t is further ordered, That the said respondent within GO days from n:;d after the date o£ the service upon it of this order, shall file with ~he Commission a report or reports in writing setting forth in detail the :manner and form in which it is complying and has complied with e order to cease and desist hereinabove set forth. Complaint 23F.T.C.