Paul J. Petruccelli
Chief Marketing Counsel
Kraft Foods North America, Inc.
847-646-2796
Mr. Chairman, and distinguished Members of the Committee:

My name is Paul Petruccelli, and I am Chief Marketing Counsel for Kraft Foods North America. Before joining Kraft, I spent thirteen years as an attorney for the Federal Trade Commission's Bureau of Consumer Protection, in Washington, D.C. I am grateful to the Committee for extending to Kraft an invitation to testify regarding the importance of the proposed Product Packaging Protection Act of 2001.
Kraft Foods is the largest branded food and beverage company headquartered in the
United States and the second largest worldwide. We market some of the best-known and best-loved food products in this country, including Kraft Macaroni ‘N Cheese, Post Cereals, Kool-Aid Soft Drinks, Nabisco Cookies and Crackers, and Kraft Cheese, to name only a very few. We maintain more than 80 manufacturing and processing facilities in the United States, and our products can be found in a pantry, refrigerator or freezer in virtually every home in the land.

Overview of the Problem
Kraft Foods has spent decades building consumer trust in its brands and in the product quality that they represent. As a producer of high quality foods with an exceptional reputation to protect, Kraft is increasingly concerned about reports from consumers across the country who have found offensive messages and other unauthorized materials in packages of our products. We have received approximately 80 consumer reports of such incidents since 1997. To date in 2001, we have received a total of 15 such reports, putting us on a pace to receive perhaps 25 complaints from consumers this year alone. These figures do not include any reports that may have been received by our recently-acquired Nabisco businesses.
In reviewing these unauthorized print materials, we have seen material of all manner and description, much of it quite distasteful. While I did not think it appropriate to distribute or quote from these materials, permit me to give you a flavor for some of the reports we have received from consumers:
× A consumer from Massachusetts found a pornographic drawing inserted into a box of JELL-O pudding.
× A California consumer opened a box of MINUTE rice and found a swastika and related literature of a racist nature.
× Another California consumer discovered racist comments upon opening a box of ALPHA BITS cereal.
× Consumers in Maine and New Jersey found religious messages in OSCAR MAYER LUNCHABLES Fun-Packs and POST Shredded Wheat.
× A Pennsylvania consumer discovered an anti-meat brochure inside the box of a DIGIORNO frozen pizza.
× A Vermont consumer complained that a package of HANDI-SNACKS crackers had a health-related warning hand-written on the outside of the box.
Of course, these are just a few examples of the problem; other product manufacturers could undoubtedly offer many more, and so could Kraft.
This recitation of tampering examples is of necessity somewhat bland. It does not begin to describe the ugly, hateful nature of some of these materials, nor can I adequately capture the emotional and psychological impact that discovering these materials frequently has upon consumers. As we are the consumer's natural contact point, they often call us in an extremely agitated state after being assaulted by these materials. In some instances, the consumer's young child has discovered some racist, or sexist, or anti-gay message, and the consumer may be distraught at the prospect of having to explain to a young child about the presence of the uglier elements of our society.
Aside from the emotional impact of these incidents, the affected consumers rightly conclude that the product they purchased has been tampered with. Their first instinct often is to blame the manufacturer – Kraft Foods – despite our assurances that we are not the source of the offending material and our efforts to persuade them that the material must have been inserted into the package after it left our control. Even those consumers who are somewhat mollified by our explanations may have lost a degree of trust in Kraft that we can never recapture. Of course, we have no way of knowing how many customers and how much consumer trust we may lose from what are undoubtedly the many consumers who encounter these materials upon opening one of our packages, but never call to report the incident to us. This harm to our business is quite simply incalculable.
When we began to receive these types of reports from consumers, we did what any responsible company would do. We pursued investigations to determine whether it was possible that the material was being inserted by our own employees. Over a period of time, however, we have seen that the same messages may appear in cereal boxes produced at different manufacturing facilities, or that messages of a certain type tend to appear and reappear in a particular geographical region. These factors have generally led us to conclude that the unauthorized material is inserted into or placed on the package after it has left our control.
As these incidents began to proliferate, we turned to law enforcement authorities at both the Federal Bureau of Investigation and the FDA's Office of Criminal Investigation and requested that they prosecute this activity. Unfortunately, neither agency believes that it has current authority to prosecute such cases under the Federal Anti-Tampering statute (18 U.S.C. 1365). As a result, both agencies have declined to investigate the incidents we have presented to them.

Tampering Harms Consumers, Manufacturers and Retailers
These incidents of tampering amount to product hijacking, and cause significant injury to consumers, manufacturers and stores alike. Consumers may be emotionally harmed simply as a result of being accosted by some of this literature. A child may be traumatized by exposure to inappropriate material; adults may be offended by the presentation of particular religious beliefs or by exhortations to take action against various racial groups or other minorities.
Manufacturers and retailers, of course, may be injured by the loss of consumer confidence and potential business that ensues from such an incident. In this regard, it bears emphasis that reported complaints to a company always underestimate the size of a problem that consumers may be having – typically by a factor of tenfold or more. In addition, each affected consumer may report the incident to relatives, friends, associates at work, and so on. The injury to the reputation of a retail store, or to the producer of the affected product, is incalculable and, in our view, grievous.

The Current Anti-Tampering Statute Is Not Effective
As you know, Congress passed the Federal Anti-Tampering Act in 1994 to protect consumers from the dangers of using products whose contents or labels had been tampered with. In doing so, Congress sought not only to guard against the physical health risks that could result from such tampering, but also to prevent the adverse impact that the tampering would have on consumer confidence in the integrity of products and their packaging.
The Act generally makes it unlawful for individuals to tamper with consumer products, their packages or labels with reckless disregard for the dangers that could befall another person. In addition, the Act provides for criminal penalties for individuals who tamper with these products, packages or labels with the intent to injure a business. The Act states, in pertinent part:
Whoever, with intent to cause serious injury to the business of any person, taints any consumer product or renders materially false or misleading the labeling of, or container for, a consumer product, if such consumer product affects interstate or foreign commerce, shall be fined under this title or imprisoned not more than three years, or both.
Unfortunately, several elements of the current Federal Anti-Tampering Act render it ineffective to prevent the harm that has come to consumers, manufacturers and sellers of consumer goods as a result of individuals tampering with product packages and labels in the manner I have described.
First, Section 1365(b) of the Act requires that a person have "the intent to cause serious injury to the business of any person" in order to be convicted. Intent to cause harm to one particular business would be difficult for a federal prosecutor to prove, especially in cases where messages are placed in the products of several manufacturers and in several grocery stores. Moreover, the Act does not cover the unfortunate situations in which an individual tampers with a product and causes a non-physical trauma.
Second, the Act requires that the messages added to the packaging either "taint" the product itself or render its labeling false or misleading. Since neither of these tests is typically satisfied in the cases involving the insertion of unauthorized materials, this requirement effectively thwarts law enforcement against some highly abusive tampering incidents.
These two requirements in section 1365(b) give the Act a very narrow scope and, as a result, many instances of product tampering have fallen through the cracks. To more effectively protect consumers against this additional form of product tampering, we believe the Act must be amended to explicitly address the conduct in question.

The Product Packaging Protection Act of 2001 Would Benefit Consumers and Manufacturers
The Product Packaging Protection Act of 2001 would address the limitations of the current statute by inserting the following subsection:
Whoever, without the consent of the manufacturer, retailer, or authorized distributor, intentionally tampers with a consumer product that is sold in interstate or foreign commerce by knowingly placing or inserting any writing in the consumer product, or the container for the consumer product, before the sale of the consumer product to any consumer shall be fined under this title, imprisoned not more than three years, or both.
The bill would also clarify that a "writing" includes any form of representation or communication.
This new language would provide the Federal government with the authority it needs to more effectively protect consumers against individuals who insert hateful, offensive, misleading, or simply unauthorized messages or pictures into the packages of consumer products. Without such protection, the current outbreak of unauthorized materials that have been found in packages of consumer products across the country will continue unabated. Indeed, we are fearful that the practice may increase, as those with a particular axe to grind may become increasingly emboldened by their unchecked successes.
While fully supportive of the bill, we would like to suggest a modification to improve its effectiveness. We would recommend that the subcommittee insert the phrase "or on" to the bill, so that it would address the practice of "knowingly placing or inserting any writing in the consumer product, or in or on the container for the consumer product . . . ." (emphasized language would be new). In our experience, there have been a number of instances in which individuals have used our packages to communicate their messages simply by writing or stamping their views on the box, and we believe this conduct should be prohibited as well. Moreover, we are fearful that a statutory change that is limited to those materials placed into the package will simply encourage these individuals to more aggressively use the outside of the package itself as a billboard for their inappropriate communications.

Mr. Chairman, the Product Packaging Protection Act of 2001 could help us address this problem in a manner that is narrowly tailored to address the sort of harm we have been seeing in the past few years, and prevent these product tamperers from commandeering a cereal box as their personal soapbox. For this reason, on behalf of Kraft Foods, I respectfully urge enactment of the bill.
Thank you once again for the opportunity to speak to you this afternoon. I look forward to your questions.