TESTIMONY OF LESLIE G. SARASIN, CAE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMERICAN FROZEN FOOD INSTITUTE

BEFORE THE
COMMITTEE ON THE JUDICIARY
SUBCOMMITTEE ON ANTITRUST, BUSINESS RIGHTS AND COMPETITION

UNITED STATES SENATE

AUGUST 1, 2001
Thank you, Chairman Kohl and members of the Committee. I am Leslie Sarasin, president and chief executive officer of the American Frozen Food Institute of McLean, Virginia. AFFI is the national trade association that represents frozen food processors, marketers and suppliers to the industry. AFFI's membership of 550 companies is responsible for approximately 90 percent of the frozen food processed annually in the United States, valued at approximately $60 billion. We appreciate the opportunity to appear before the Subcommittee today to discuss the issue of tampering with consumer products, specifically S.1233, the "Product Packaging Protection Act of 2001." AFFI's members manufacture, freeze and market products ranging from juice and branded and private label vegetables, to brand-name pizza, entrees, meals and gourmet desserts. As a representative of these manufacturers, AFFI is very concerned with the recent incidents of offensive messages being placed in and on the packages of consumer products across the country.

OVERVIEW
In 1994, Congress passed the Federal Anti-Tampering Act (the "Act") to protect consumers from the dangers of using products whose content or labels had been tampered with. The Act was intended to safeguard consumers from physical health risks related to such tampering and to protect consumer confidence in commercial products. While the 1994 Act has effectively addressed certain incidents of tampering with consumer products, there are still gaps in the law that fail to address the recent nationwide outbreak of tampering with product packages and labels. The Product Packaging Protection Act of 2001 aims to fill-in these gaps in the law.

OFFENSIVE AND MISLEADING MATERIALS HAVE BEEN INSERTED IN AND PLACED ON PRODUCT PACKAGES
In recent years, there have been a number of reports from companies of consumer complaints regarding offensive materials that consumers have found attached to, or inserted in the packages of a variety of consumer products, such as cereal and frozen foods. The companies who have received these reports and law enforcement authorities believe that this offensive tampering activity occurred while the products were on store shelves. Often the offensive materials are inserted within the product packaging so that consumers are not aware of them until they open the products at home. In other instances, offensive or misleading stickers or labels have been affixed onto product packaging in the store affecting consumer confidence and willingness to purchase the product.
The materials found inside of product packages are often extremely offensive. Many materials contain messages of hate and encourage violence against members of various ethnic, religious, or cultural groups. The images in these materials are offensive and shocking to many adults and would traumatize most children. For example:
· One message suggests that a well-know film director be murdered because of the content of his work. A telephone, address, and website is provided.
· Other messages promoted Nazi causes.
· Several other messages advocated genocide against religious and ethnic minorities.

In addition to these patently offensive messages, some consumers have discovered labels placed onto packages by third parties. Since the text of these labels was either related to the product inside the packaging or another consumer product, many consumers mistakenly believed that the manufacturer supplies the messages. On some products, stickers were attached that stated that the products could pose serious health and environmental risks. People should not be allowed to place such stickers on commercial products without the knowledge and consent of manufacturers or others involved in the commercial distribution of the product since the tampering may detrimentally affect the confidence consumers have in the underlying product.

TAMPERING HURTS CONSUMERS, MANUFACTURERS AND RETAILERS
Incidents of tampering jeopardize the critical relationship between manufacturers of consumer products and their customers. Furthermore, the effects of tampering incidents can be harmful to consumers, manufacturers, and stores.
For example a consumer may open a frozen entrée package and find a piece of paper containing hateful language and offensive graphic images. The consumer would likely lose trust in the manufacturer of the product and be wary of purchasing their products in the future. This loss of consumer confidence is possible even if the tampering does not affect the product within the package or the product's labeling. Consumers assume that the manufacturer is responsible for the entire product packaging, finding materials inserted in or on the packaging may cause consumers to lose confidence in the safety of the actual product and in the manufacturer's safety precautions generally. The simple fact that a product was tampered with at any level, even with materials unrelated to the product itself, might cause consumers to question the overall product safety and jeopardize their continuing relationship with the manufacturer. Similarly, the consumer may lose confidence in the store where the product was purchased. They may feel that the store management did not take sufficient precautions either in purchasing its inventory from manufacturers or in safeguarding the products on its store shelves. For companies dependent on consumer patronage, development of consumer confidence in the companies' products or services is critical. Offensive materials in or on the packaging of a product can irreparably harm the trust-relationship between manufacturers or retailers, and consumers.

THE PRODUCT PACKAGING PROTECTION ACT OF 2001PRODUCT PACKAGING PROTECTION ACT OF 2001 WOULD BENEFIT CONSUMERS AND MANUFACTURERS

The Product Packaging Protection Act of 2001would fill in gaps in current law to more effectively protect consumers against individuals who insert hateful, offensive or misleading messages or pictures into or on the packages of consumer products. Without such protections these recent incidents of tampering could continue and further jeopardize consumer privacy and consumer confidence in product manufacturers and retailers.
There has been some concern that the Product Packaging Protection Act of 2001 might impose too severe penalties and that these penalties may be used against, for example, a child who affixes a cartoon sticker onto a product in a store. I think that Congress is creating a sufficient legislative record as a result of this hearing and the hearing held in the House of Representatives on H.R. 2621, the House version of this bill, to demonstrate that the intent of this legislation is to identify and punish those who abuse a private consumer product transaction to invade the privacy of a consumer's home with their message. Where such a trespass is particularly offensive, it warrants prosecution. An incidental or innocuous trespass would not.
I would note that AFFI endorses the Senate bill with regard to the nature of the penalty. I would ask this Committee to recognize that the three-year sentence is a maximum and not a minimum, similarly the fines related to violations of this act are expressed in terms of maximums and not minimums. Therefore, prosecutors and courts retain a great deal of discretion regarding which incidents to prosecute and how best to sentence those who are convicted. Given the potentially traumatic affect on consumers and businesses of these abusive incidents, we respectfully submit that prosecutors and courts should be allowed latitude to punish those who do so as felons.
AFFI, however, supports that part of the House bill that prohibits placing materials "in or on" consumer products. The Senate bill does not prohibit persons from placing materials on product packaging. This provision is significant since misleading materials affixed to product packaging may just as significantly affect consumer confidence as those inserted in packaging. Furthermore, many of the materials affixed on packages are designed to resemble the manufacturer or store labeling and are therefore likely to be incorrectly attributed to these companies by consumers. It would likely be no less shocking to a consumer to find offensive materials on a package than within the packaging itself, and the more these materials appear to be "legitimate", that is from the manufacturer or store, the more misleading effects they can have. For that reason I would urge the members of this Committee to consider including a prohibition of tampering both in and on consumer products, as the House bill provides.
The Product Packaging Protection Act of 2001could be a very effective tool to combat these incidents of consumer product tampering. The bill has been drafted in a way that would provide increased protection to consumers, manufacturers, and retailers from the effects of tampering. In addition, the bill language in conjunction with a clear legislative record will ensure that the law is used to address the sort of harmful tampering we've seen in recent years. For these reasons, I urge you on behalf of AFFI to support the Product Packaging Protection Act of 2001.
Thank you for this opportunity to present the views of the American Frozen Food Institute. I would be happy to answer any questions you may have.