FPLA '12 SS fin

Supporting Statement for Information Collection Provisions
Contained in the Rules Implementing the
Fair Packaging and Labeling Act
16 C.F.R. Parts 500-503
(OMB Control #: 3084-0110)
1.

Necessity for Collecting the Information

The Fair Packaging and Labeling Act, 15 U.S.C. §§ 1451-1461 (“FPLA” or “Act”), was
enacted in order to: (1) eliminate consumer confusion in the marketplace; (2) standardize the
means used by sellers to disclose package content information to buyers; and (3) eliminate
consumer deception and confusion concerning product size representations. In Section 2 of the
Act, Congress determined that “[p]ackages and their labels should enable consumers to obtain
accurate information as to the quantity of the contents and should facilitate value comparisons.”
15 U.S.C. § 1451. The Act, in turn, directs the Federal Trade Commission (“FTC” or
“Commission”) to issue rules requiring that labels for all “consumer commodities”1 disclose the
package’s net contents, identity of commodity, and name and place of business of the product’s
manufacturer, packer, or distributor. The Act authorizes additional rules where necessary to
prevent consumer deception (or to facilitate value comparisons) regarding descriptions of
ingredients, slack fill of packages, use of “cents-off” or lower price labeling, or characterization
of package sizes.
In 1968, the FPLA rules (16 C.F.R. Parts 500-503) took effect. The FPLA rules
prescribe the manner and form of labeling consumer commodities (as defined in the FPLA)
regarding: (1) the identity of the commodity; (2) the name and place of business of the
manufacturer, packer, or distributor; (3) the net quantity of contents (in both inch/pound units
and metric units); and (4) the net quantity of servings, uses or applications represented to be
present. 16 C.F.R. §§ 500.3-500.26. The rules also require sellers that make “cents off,”
“introductory offer,” or “economy size” claims to keep records for one year showing compliance
with the Act's requirements for such claims. 16 C.F.R. §§ 502.100-502.102.
The FPLA rules closely parallel the statute’s requirements, and provide detailed
guidance on the manner and form of disclosures the Act requires. The FTC enforces these rules
for household “consumer commodities.” The Food and Drug Administration (“FDA”)
administers the FPLA for food, drugs, cosmetics, and medical devices. The FTC administers
the FPLA for other “consumer commodities” that are consumed or expended in the household.
The U.S. Department of Agriculture is responsible for rules covering meat and poultry products.
1

“Consumer commodity” means any article, product, or commodity of any kind or class which is
customarily produced or distributed for sale through retail sales agencies or instrumentalities for consumption
by individuals, or use by individuals for purposes of personal care or in the performance of services ordinarily
rendered within the household, and which usually is consumed or expended in the course of such
consumption or use.” 16 C.F.R. § 500.2(c). For the precise scope of the term’s coverage see 16 C.F.R.
§ 500.2(c); 503.2; 503.5. See also http://www.ftc.gov/os/statutes/fpla/outline.html.

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2.

Use of the Information

Consumers use the information required for disclosure by these rules to make informed
product value comparisons and purchasing decisions.
3.

Consideration to Use Improved Information Technology to Reduce Burden

Firms subject to these rules are free to use improved information disclosure and package
printing technologies to reduce the burden of complying. In the many years since the rules took
effect, covered businesses have integrated the process of compliance into routine packaging
operations. Compliance requirements are reasonably well understood throughout the industry,
and formal enforcement actions have not been necessary in recent years. State officials
responsible for weights and measures activities play a central role in assuring that consumers
receive accurate and complete product disclosure at the point of sale.
Information about consumer commodities is most valuable at the point of sale, and
labeling is the method most closely tailored to consumer shopping behavior. As such,
providing an option for electronic disclosure in lieu of labeling pursuant to the Government
Paperwork Elimination Act, 44 U.S.C. § 3502 note, is impracticable.
4.

Efforts to Identify Duplication/Availability of Similar Information

Although FPLA enforcement involves several agencies (see #1 above), there is no
duplication of compliance requirements for any particular product subject to the Act. There has
been sufficient liaison between the enforcement staffs of the agencies involved to eliminate any
serious concern on the part of firms that market in more than one product category subject to the
Act.
5.

Efforts to Minimize Burden on Small Businesses

Section 3(a) of the FPLA leaves no discretion for exemption or modification of
requirements based on firm size. 15 U.S.C. § 1452. The burden for small businesses is
already minimized because the requirements of these rules are limited to information that a
company would receive in the ordinary course of business. For the most part, compliance with
the FPLA rules entails no more than affected entities consulting the FTC (and/or company
in-house counsel) on an as-needed basis to answer questions they may have to help ensure such
compliance.
6.

Consequences of Conducting Collection Less Frequently

The statutory framework requiring information disclosure on packages does not provide
any basis for reducing the frequency of information disclosure.

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7.

Circumstances Requiring Collection Inconsistent with Guidelines

The collection of information in these rules is consistent with the OMB guidelines stated
in 5 C.F.R. § 1320.5(d)(2).
8.

Consultation Outside the Agency

At the FTC, primary responsibility for implementing the FPLA rules is delegated to the
Bureau of Consumer Protection, Division of Enforcement, which has continuous informal
contact with industry members who need guidance concerning compliance requirements.
Moreover, the Commission systematically reviews its rules to ensure that the rules continue to
achieve their intended goals without unduly burdening commerce. These reviews are
conducted on a ten-year schedule, with review of the FPLA rules scheduled next for 2013. 76
Fed. Reg. 41,150 (July 13, 2011). Additionally, through its triennial pursuit to renew OMB
clearance for the disclosure provisions of the FPLA rules, the Commission seeks, in accordance
with 5 C.F.R. § 1320.8(d), public comment on the practical utility of those provisions, ways to
improve the quality, utility, and clarity of required labeling, as well as comments on the
accuracy of and methodology underlying the FTC’s burden estimates. The Commission sought
such comment most recently with its latest PRA clearance request for these rules. See 76 Fed.
Reg. 70,451 (November 14, 2011). No comments were received. Consistent with 5 C.F.R. §
1320.12(c), the Commission is doing so again contemporaneous with this submission.
9.

Payments or Gifts to Respondents
Not applicable.

10. & 11. Assurances of Confidentiality/Matters of Sensitive Nature
Not applicable.
12.

Estimated Information Collection Burden

Estimated annual hours burden: 8,574,900 total burden hours (solely relating to
disclosure3)
The major information collection burden of the FPLA rules comes from the Act’s
consumer commodity labeling requirements. Accurately estimating the number of respondents
subject to these rules and annual burden work hours caused by these rules present several
3

To the extent that the FPLA-implementing regulations require sellers of consumer commodities to keep
records that substantiate “cents off,” “introductory offer,” and/or “economy size” claims, staff believes that
most, if not all, of the records that sellers maintain would be kept in the ordinary course of business,
regardless of the legal mandates. “Burden,” for OMB purposes, excludes recordkeeping customarily
maintained in the normal course of business. See 5 C.F.R. § 1320.3(b)(2).

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challenges. For example, independent data does not tidily conform to the dividing lines of
jurisdiction between the FTC and the FDA.
Based on U.S. Census data, however, staff conservatively estimates that approximately
857,490 manufacturers, packagers, distributors, and retailers of consumer commodities make
disclosures at an average burden of ten hours per entity, for a total disclosure burden of
8,574,900 hours. As in the past, Commission staff has used Census data to estimate the
number of companies. Based on a revised approach to the commodity categories in the Retail
Trade Census data, staff has eliminated much of the overlapping redundancies and lowered the
estimate of the number of retailers that sell products subject to the Commission’s FPLA rules.
For example, many retailers that sell soap products also sell paper products. Thus, adding the
number of such entities together would overestimate the number of retailers that are subject to
the FPLA. The Census data, however, now list retailers of soaps, detergents, and household
cleaners separately from retailers of paper and related products (including paper towels, toilet
tissue, wraps, bags, foils, etc.), enabling revised calculations to reduce overlap and
double-counting of retailers.
Associated labor costs: $186,932,820
Labor costs are derived by applying appropriate hourly cost figures to the burden hours
described above. Staff estimates that the FPLA disclosure requirements consist of an estimated
hour of managerial and/or professional time per covered entity (at an estimated average hourly
rate of $54) plus two hours of specialized clerical support4 (at an estimated average hourly rate
of $26), and seven hours of clerical time per covered entity (at an estimated average hourly rate
of $16), for a total of $186,932,820 ($218 blended labor cost per covered entity x 857,490
entities).5
13.

Estimated Capital/Other Non-Labor Costs

Capital and start-up costs are de minimis. For many years, the packaging and labeling
activities that require capital and start-up costs have been performed by covered entities in the
ordinary course of business independent of the FPLA and its implementing rules. Similarly,
firms provide in the ordinary course of business the information that the statute and rules require
4

“Specialized clerical support” consists of computer support personnel who design the appearance and
layout of product packaging, including appropriate display of the disclosures required by the FPLA
regulations.
5

Based generally on the National Compensation Survey: Occupational Earnings in the United States, 2010,
U.S. Department of Labor, U.S. Bureau of Labor Statistics (May 2011) (“BLS National Compensation
Survey” (citing the mean hourly earnings for management occupations, legal occupations/lawyers, and
assorted clerical positions) available at http://www.bls.gov/ncs/ncswage2010.html. Clerical estimates are
derived from the above source data, applying roughly a mid-range of mean hourly rates for potentially
applicable clerical types, e.g., computer operators, data entry and information processing workers.

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be placed on packages and labels.
14.

Estimate of Cost to Federal Government

Staff estimates that a representative year’s cost of administering the rules’ requirements
during the three-year clearance period sought will be approximately $38,000. This represents
attorney and investigator costs, and includes employee benefits.
15.

Program Changes or Adjustments

The revised burden hour estimate reflects an increased number of affected entities, thus
accounting for an increase of cumulative burden hours (the estimate of ten hours per respondent,
however, remains unchanged). Estimated labor costs increase, in turn, for this effect paired
with an increased blended hourly labor rate estimate used in staff’s calculations.
16.

Statistical Use of Information
There are no plans to publish any information for statistical use.

17.

Display of Expiration Date for OMB Approval
Not applicable.

18.

Exceptions to the Certification for Paperwork Reduction Act Submissions
Not applicable.

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