We all feel patriotic this time of year, particularly those of us in DC gearing up for the fireworks over the Capital (well, except maybe those of us still without power.) Marketers periodically feel the call to tell customers their products are Made in America. But exercise caution. The FTC’s Made in USA Enforcement Policy Statement explains the FTC’s position on what one needs to substantiate such a claim. And it is stricter than you might think – assembled in the USA plus made of all or almost all domestic inputs. (We think this standard is too onerous and if you are looking for some summer reading on the topic from us click here). In any event, after issuing the Policy over a decade ago, there was a flurry of enforcement activity with over a dozen consent orders. And then not much to speak of (other than was one settlement in 2009 .)
But a review of the FTC’s closing letters suggests the Staff may be back in the domestic origin enforcement business, or at least spending time looking at companies making these claims. In May the FTC closed an investigation involving a baby bib manufacturer where some bibs were incorrectly labeled as Made in USA rather than Made in China. This appears to be a clear goof but the manufacturer also promised a review of its website and developing internal procedures to audit retailer websites for compliance. In January another investigation against a prominent clothing manufacturer that used slogans such as “Born in America” and “hand crafted in America” on its website was shut down after the company promised to discontinue use of these phrases. And late last year, the FTC closed another investigation against a mattress manufacturer which inadvertently applied its Made in USA labels to imported mattresses but where the company ceased the practice, advised its wholesale customers of the issue and established a program for wholesale customers to return mislabeled products for relabeling, and commenced an internal investigation to determine how the event occurred and internal training to prevent future mistakes. (This may have been the result of a self-reporting letter from a retailer informing the FTC of mattress labeling issues.)
So enjoy your backyard BBQ, cheer on Captain America if you haven’t yet seen The Avengers, wave the flag and enjoy your fireworks, but before incorporating that American spirit into your marketing with domestic origin claims, take a fresh look with an American eagle eye at your substantiation to make sure it is red, white and blue true.