Averbach Co., Inc

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IN THE ~ATTER OF AVERBACH CO~PANY, INC. ET AL.

MODIFIED CEASE AND DESIST ORDER Docket 331,2. Order, October 4, 1944 Modified order in proceeding in question, in which original order issued on September 11, 1939, 29 F. T. C. 879, requiring respondents, their officers, etc., in connection with the offering for sale, etc., of flavoring compounds, foodstuffs, toilet articles and novelties in interstate commerce or in the District of Columbia, to cease and desist from misrepresenting their business status, methods, operation and size, prices, special offers, terms and conditions, agents' opportunities or earnings, value of their products, free goods, and composition and nature of their said products, as in said order in detail below set out. ~ODIFIED ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answers of respondents in which answers respondents admit all the material allegations of fact set forth in said complaint and state that they waive all intervening procedure and further hearing as to said facts, and the Commission having duly made and issued its findings as to the facts, conclusion and order to cease and desist dated September 11, 1939; and the Commission having further considered said order to cease and desist and having given due notice to the respondents to show cause why the proceeding should not be reopened for the purpose of modifying said order in the respects and to the extent set out in said notice, and no appearance having been entered by any of the respondents; and the Commission having considered the matter and the record herein, and having concluded that the public interest requires the modification of said order in the respects and to the extent set out in said notice.

It is ordered, That the respondents, Averbach Co., Inc., a corporation, and ~aid-0-Best, Inc., a corporation, their officers, agents, servants and employees, G. ~. ~oses, individually, and his agents, servants and employees, and Esther Averbach, ~orris Averbach, and Jerome Averbach, individually, and trading variously under the names The ~uriel Co. and American Chemical Co., and their agents, servants and employees, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of flavoring compounds, foodstuffs, toilet articles and novelties in interstate commerce or in the District of Columbia, do forthwith cease and desist from: 1. Representing by photographs or in any other way that J. ~. Gebhart, a fictitious person, or any other fictitious person, is a Director of Sales of Maid-0-Best, Inc.

2. Representing that Maid-0-Best, Inc., has a national sales organization until and unless said Maid-0-Best, Inc., actually has and maintains a AVERBACH CO., INC. ET AL. 307 306 Order selling organization through and by which sales are made by said Maid-0- Best, Inc., generally throughout the United States. 3. Representing, through the use of the words "Manufactured only by Maid-0-Best, Inc., St. Paul, Minn. U.S.A.," or through the use of any words or terms of similar import and meaning, or through any other means or device or in any manner, that said respondents or any of them are the Inanufacturers of the products sold by them, unless and until such respondents actually own and operate, or directly and absolutely control, a manufacturing plant wherein said products are manufactured by them. 4. Representing as the customary or regular prices or values for respondents' products prices and values which are in fact fictitious and greatly in excess of the prices at which such products are customarily offered for sale and sold in the normal course of business. · 5. Representing through fictitious prices marked or stamped on or affixed to food flavoring or other products, sold in combination deals or otherwise, or on the containers thereof, or through any other means or device or in any manner, that said prices so marked, stamped or affixed are the regular or customary retail prices of such products. 6. Using the term "vanilla extract" to describe a flavoring product, unless prepared with a vehicle of ethyl alcohol and containing a flavoring content at least fifty percent of which shall consist of true vanilla made from the vanilla bean.

7. Representing that respondents' so-called vanilla extract has no ~qual for quality, or that it is the finest available at any price, or that it IS composed of vanillin, coumarin, caramel color, and a liberal quantity of Pure vanilla made from the choicest vanilla beans, unless and until a liberal quantity of pure vanilla, made from vanilla beans, is actually used in the preparation of said alleged extract, the whole suspended or carried in a Vehicle of ethyl alcohol.

8. Using the words "orange," "lemon," "maple," and "almond" in combination or connection with the word "extract" until and unless the Product is composed of genuine ingredients, as distinguished from synthetic chemical substitutes, and such ingredients are suspended in ethyl alcohol.

9. Representing that a special account of $3,000 or any other amount represented to be used to cover refunds for returned Maid-0-Best prod- Ucts is deposited in the Western State Bank of St. Paul, Minn., or in any other financial institution, until and unless said sum be actually deposited and maintained on deposit in such bank or other financial institution and there kept available in liquid form for the said purpose. 10. Representing that it is easy for agents or representatives to ee.rn up to $15 or any other sum of money per day in selling respondents' products, Unless and until the sum named is a true representation of the average net earnings or profits consistently made by respondent's agents or represent~tives in the ordinary course of business under normal conditions and Circumstances.

11. Designating any so-called food flavors as extracts until and unless they are genuine extracts dissolved and carried in alcoholic solution. 12. Representing that cheap, inferior ingredients contained in flavoring Preparations are of "high quality" or "purest and finest." Order 39 F. T. C.

13. Representing that respondents buy their raw materials in "tremendous quantities," and from representing that greater savings are thereby passed on to the housewives of America, until and unless said statements are true in fact.

14. Representing that the product "Choc-0-Toddy" or any other product is manufactured by the respondents unless and until such respondents actually own or operate, or directly and absolutely control, a manufacturing plant wherein said product is manufactured by them. 15. Representing, designating, or describing articles of merchandise regularly included in a combination offer with other identical, similar, or other articles of merchandise as" free,"" included free," or any other term of similar import or meaning.

16. Representing, designating or describing goods, wares or merchandise delivered only upon the condition that some other article or merchandise be purchased and paid for as "free" or in any other manner indicating that said goods, wares or merchandise are gifts or gratuities. 17. Representing that so-called "special offers" or "special deals" are limited to a given period of time or to a given number of persons, if in truth and in fact the prices stated in such offers and deals are the regular, usual, and customary prices at which the products therein mentioned are offered for sale.

18. Using the term "free" or any other term of similar import and meaning to describe, designate or refer to any merchandise which is not a gift or gratuity and delivered to the recipient thereof without cost and unconditionally.

It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they have complied with this order.

J. P. RAINEY & CO. 309 Syllabus