Ambur Distilleries, Inc

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IN THE MA'ITER OF AMBUR DISTILLERIES, INC.

Complalnt, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION-" OF SEC. II OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 2481. Complaint, June 29, 1935-Decision, Nov. 28, 1936 Where a. corporation engaged in purchasing, rectifying, blending, and bottling. whiskies, gins, and other spirituous beverages, and in use of a still for pro· duclng gin through process of rectification, whereby alcohol purchased, but not produced, by It was redistilled over juniper berries and other aromatics, and In selling Its aforesaid various products, In substantial competition with· those engaged in manufacture by distillation of whiskies, gins, and other spirituous beverages, and in sale thereof, and with those engaged in purchasing. rectifying, blending, and bottling such products and selling the same among. the various States and in the District of Columbia,· and including among aforesaid competitors those who manufacture and distill from mash, wort, or wash, as commonly understood, their whiskies and other spirituous bevl.'rages and truthfully use words "distillery," "distilleries," "distilling," or "distillers" as a. part of their corporate or trade name, on their stationery and. advertising,· and on the labels of the bottles in which they sell and ship their products, and those who, engaged in purchasing, rectifying, blending,. bottling, and selling such various products, do not thus use aforesaid wordsas a part of their corporate or trade names, etc., as above set forth- 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, and furnished the same with the means of representing to their vendees, both retailers and ultimate consuming public, that it was a distiller and that tbe whiskies, gins, and other spirituous beverages contained' in such bottles were by it made through process of distillation from mash, wort, or wash, notwithstanding fact it did not distill said whiskies, etc .• thus bottled, labeled, sold, and transported by It, nor own, operate, or control any place or places where such beverages were made by process of distilla· tlon from mash, wort, or wash, as long definitely understood from word "Dis· tilleries" by trade and ultimate purchasing public as meaning places wheresuch liquors are made by process of original and continuous distillation as· above set forth, and through continuous closed pipes and vessels until manu· facture is complete, and was not a distiller, !or purchase of bottled liquors of which there is a preference on the part of a substantial portion of the· purchasing public ;

With effect of misleading dealers and purchasing public into belief that it was a distiller and that the whiskies, gins, and other spirituous beverages sola by it were by it made and distilled from mash, wort, or wash as above set forth, and of inducing dealers and purchasing public, acting in such beliefs, to buy Its said whiskies, etc., bottled and sold by it, and diverting thereby trade to it from Its competitors who do not, by their corporate or tradenames, misrepres1mt that they are manufacturers by distillation, as above set I' I!I AMBUR DISTILLERIES, INC. I, 1057 II ' 105G Complaint li forth, of their products: to the substantial injury of substantial competition i•, in commerce :

Held, That such acts and practices were to the prejudice of the public and competitors and constituted unfair methods of competition. Before Mr. John L. Hornor, trial examiner.

Mr. PGad B. Morehouse for the Commission.

Mr. Walter Drew, of Milwaukee, Wis., for respondent. Complaint 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 Ambur 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 pro- ~eeding 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 Wisconsin, with its Principal office and place of business in the city of Milwaukee, in said State. It is now, and for more than one year last past has been~ engaged in the business of purchasing, 'rectifying, blending, and bottling whiskies, gins, and other spirituous beverages and in the Bale 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 St.ates to the purchasers thereof, consisting of wholesalers and retailers located in other States of the United States and the District ~f Columbia. In the course and conduct of its business as aforesaid,. ~espo1~dent is now, and for more than one year last' past has been, in SUbstantial co~petition with other corporations a.'nd with individuals,. Partnerships, and firms engaged in the manufacture by distillation of ~hiskies, 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 ~orporations, and with individuals, firms, and partnerships engaged I~ .th~ business of purchasing, rectifying, blending, and bottling Whiskies, ginst and other spirituous beverages and in the sale thereof Complaint 231r. T. C. in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 2. In the course and conduct of its business as aforesaid, respondent has upon its said premises a still which it uses in the production of gin by a process of rectification, whereby alcohol pur· chased but not produced by respondent is redistilled over juniper berries and other aromatics. Such rectification of alcoholic spirits does not make or constitute respondent a distiller as defined by Sec· tion 3247 of the Revised Statutes regulating Internal Revenue, nor as commonly understood by the public or the liquor industry. 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 whole· salers and retailers in such industry and to the ultimate purchasing public, to wit, 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 manufac· ture 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 respondent is a distiller and that the whiskies, gins, and other spirituous beverages therein contained were by it manufactured through the process of distillation frolll mash, wort, or wash, as aforesaid, when, as a matter of fact, respondent is not a distiller, does not distill the said whiskies, gins, and other spirituous beverages by it sd 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, partnerships1 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 adver· tising, and on the labels of tlie bottles in which they sell and ship such Al\1llUR DISTILLERIES, INC. 1059 1056 Findings i liProducts. There are also among such competitors corporations, firms, Partnerships, and individuals engaged in the business of purchasing, I rectifying, blending, bottling, and selling whiskies, gins, and other s?irituous beverages who do not use the words "distillery," "distilleries" "distillino-" or "distillers" as a part of their corporate or trade names,' nor onel their stationery or advertising, 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 h~reof, is calculated to and has the capacity and tendency to and does nuslead and deceive dealers and the purchasing public into the beliefs that respondent is a distiller and that the whiskies, gins, and other S~irituous 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 an~ the purchasing public acting in such beliefs, to purchase the Whiskies, gins, and other spirituous beverages bottled and sold by the res~ondent, thereby diverting trade to respondent from its com- Petitors who do not by their corporate or trade names or in any other lllanner misrepresent that they are manufacturers by distillation from lllash, wort, or wash, of such products, and thereby respondent does substantial injury to substantial competition in interstate commerce. t par. 6. The acts and things above alleged to have been done and he false representations alleged to have been made by respondent are to the prejudice of the public and the competitors of respondent ~nd constitute unfair methods of competition in commerce within the ~tent and meaning of Section 5 of an Act of Congress entitled "An ct to create a Federal Trade Commission, to define its powers andd Ut' Ies, and for other purposes," approved September 26, 1914. REPORT, FINDINGS AS TO THE FACTS, AND ORDER t Pursuant to the provisions of an Act of Congress approved Seper 26, 1914, entitled "An Act to create a Federal Trade Com- };' ISSion, to define its powers and duties, and for other purposes," the 19~deral5 Trade Commission on June 29, 1935, issued, and on July 2,})' ~ served its complaint in this proceeding upon respondent, Ambur P ~.h!leries, Inc., charging it with the use of unfair methods of coml~Ion in commerce in violation of the provisions of said act. Afterfh the Issuance of said complaint and the filing of respondent's answer, f e Commission by order entered herein, granted respondent's motion aor permission to withdraw said answer and to substitute therefor 11 b answer admitting all the material allegations of the complaint to e true and waivin(J'e the takincro of furtlwr evidence and all other 78035"'-39-vol. 23-69 Findings 23F.T.C.

intervening procedure, which substitute answer was duly filed in the office of the Commission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and the substitute answer, 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: FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent is a corporation organized, existing, and doing business under the laws of the State of Wisconsin, with its principal office and place of business at 523 North Jackson Street, in the city of Milwaukee, in the said State. It is now, and for more than one year last past has been engaged under basic permit from the United States Government, designated as R-405, in the business of 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.

PAn. 2. In the course and conduct of its business as aforesaid, re· spondent has upon its said premises a still which it uses in the production of gin by a process of rectification, whereby alcohol pur- AMBUR DISTILLERIES, INC. 1061 1056 Findings chas~d, but not produced., by respondent ]s redistilled over juniper berries and other aromatics. Such rectification of alcoholic spirits does not make or constitute respondent a distiller as defined by Section 3347 of the Revised Statutes regulating Internal Revenue, nor as ~Otntnonly understood by the public or the liquor industry. For a. ong period of time the word "Distilleries" when used in connection ~ith the liquor industry and the products thereof has had, and still as a definite significance and meaning to the minds of the wholesalers and retailers in such industry and to the ultimate purchasing PUblic, to wit: places where such liquors are manufactured by the Process of original and continuous distillation from mush, wort, 01· ;ash, through continuous closed pipes and vessels until the manu- ~ct~e thereof is completed; and a substantial portion of the pur- ~ as~n~ public prefers to buy spirituous liquors prepared and bottled Y distillers.

th PAR. 3. In the course and conduct of its business as aforesaid by 't e use of the word "Distilleries" in its corporate name, printed on ~ s stationery and advertising, and on the labels attached to the ~~ties in which it sells and ships its said products, and in various ~h er ':ays, respondent represents to its customers and furnishes a ~tn With the means of representing to their vendees, both retailers t~ the ultimate consuming public, that respondent is a distiller and t ~t the whiskies, gins, and. other spirituous beverages therein contned were by it manufactured through the process of distillation r~om mash, wort, or wash as aforesaid, when, as a matter of fact, andondent is not a distiller, does not distill the said whiskies, gins, transother spirituous beverages by it so bottled, labeled, sold, and wh Ported, and does not own, operate, or control any place or places fr ere such beverages are manufactured by the process of distillation ;m tnash, wort, or wash.

h ~R. 4. There are among the competitors of respondent engaged h~ t le sale of spirituous be.Yerages, as mentioned in pa,ragraph .1 fa r:of, corporations, firms, partnerships, an<.l individuals who manu- ~ c ure and distill from mash, wort or wash as aforesaid, whiskies, fu~ls, and other spirituous benrages sold by them, and who trutht.11.YI !Do-use" the words· "distillery"' "distilleries"' "distillers"' or ''Llisstat' b' as a part of their corporate or trade names, and on their1· the Ionery and advertising, and on the labels of the bottles in whicll Peth sell and ship such products. There are also among such comin t;rs, co.rporations, firms, partnerships, and individuals engage(l seiiin: bu~lll~ss of purchasing, rectifying, blending, bottling, ami the wb wlusk1es, gins, and. other spirituous beverages who do not use ords "disti!Jery," "dist.illeries," "distilling," or "distillers" as a 1062 FEDERAL TRADE COl\Il\IISSION DECISIONS Order 23 F. T.C.

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.

PAR. 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 purchase the whiskies, gins, and other spirituous beverages bottled and sold by the respondent, thereby diverting trade to respondent from 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 such products, and thereby re· spondent does substantial injury to substantial competition in inter· state commerce.

PAR. 6. Because existing regulations promulgated under the Fed· eral Alcohol Administration Act approved August 29, 1935 ( 49 Stat. L. 077), provide that rectifiers who redistill purchased alcohol over juniper berries and other aromatics may call such resulting product "distilled gin" and require that the labels state who distilled it, the Commission has excepted gins so produced by respondent from the application of its order.

CONCLUSION The aforesaid acts and practices of the respondent, Ambur Dis· tilleries, Inc., are to the prejudice of the public and of respondent's competitors, and constitute unfair methods of competition in corn· merce, 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 Com1nis· sion upon the complaint of the Commission and the answer filed herein, dated October 23, 1936, 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 Al\IBUR DISTILLERIES, INC. 1063 1056 Order conclusion that said respondent has violated 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."

It is ordered, That the respondent, Am bur Distilleries, Inc., its officers, representatives, agents and employees, in connection with the offering for sale, sale, and distribution of whiskies, gins, and other spirituous beverages in interstate commerce or in the District of Columbia (except gins by it produced through redistillation of taxpaid aromatics), do forthwith cease and desist from representing: Through the use of the word "Distilleries" in its corporate name, on its stationery, advertising, or on the labels attached to the bottles in which it sells and ships its said products, or in any other way b~ word or words of like import, (a) that it is a distiller of whiskies, g~ns, or other spirituous beverages; or (b) that the said whiskies, glns, or other spirituous beverages were by it manufactured through the process of distillation; or (c) that it owns, operates, or controls a place or places wherein such products are by it manufactured by a process of original and continuous distillation from mash, wort, ;r wash, through continuous closed pipes and vessels until the manuacture thereof is complete, unless and until respondent shall actually own, operate, or control such a place or places. f It is further ordered, That the said respondent, within 60 days fi~orn,, and after, the date of the service upon it of this order, shall . e With the Commission a report or reports in writing setting forth In detail the manner and form in which it is complying, and has complied with the order to cease and desist hereinabove set forth. Syllabus 23 F. T. C.