FPLA '18 Supptg Stmt 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.
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 FPLA Rules closely parallel the statute’s requirements, and provide detailed
guidance on the manner and form of disclosures the Act requires. The FTC administers the
FPLA for “consumer commodities” that are consumed or expended in the household and that
are not otherwise excluded from FTC purview. The Food and Drug Administration (“FDA”)
administers the FPLA for food, drugs, cosmetics, and medical devices. The U.S. Department
of Agriculture is responsible for rules covering meat and poultry products.

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“The term consumer commodity or 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 CFR 500.2(c). For the precise scope of the term’s coverage, see 16 CFR 500.2(c);
503.2; 503.5. See also
http://ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-packaging-labeling-act.

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 FTC enforcement actions have not been undertaken. State officials responsible for
weights and measures activities play a central role in ensuring 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.
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. However, 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

Consistent with 5 C.F.R. § 1320.8(d), the Commission recently sought public comment
on the Paperwork Reduction Act (44 U.S.C. Chapter 35) (“PRA”) aspects of the Rules. See 82
Fed. Reg. 57,599 (Dec. 6, 2017). No relevant comments were received. The Commission is
providing a second opportunity for public comment while seeking OMB approval to extend the
existing PRA clearance for the Rules. 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: 8,084,250 total burden hours (solely relating to
disclosure)2
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
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
808,425 manufacturers, packagers, distributors, and retailers of consumer commodities3 make
2

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).
3

Commission staff identified categories of entities under its jurisdiction that supply consumer commodities as
defined in the FPLA Rules. Those categories include retailers, wholesalers, and manufacturers. Commission staff
estimated the number of retailers (735,038) based on Census data (under NAICS subsectors 445, 452, and 453,

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disclosures at an average burden of ten hours per entity, for a total disclosure burden of
8,015,140 hours.
Associated labor costs: $199,680,975
Labor costs are derived by applying appropriate estimated hourly cost figures to the
burden hours described above. The FTC assumes that respondents will use employees to create
compliant labels. Of the 10 hours spent by each respondent, Commission staff assumes the
hour breakdown will be as follows: 1 hour of managerial and/or professional time per covered
entity, at an hourly wage of $60,4 2 hours of specialized clerical support, at an hourly wage of
$275, 7 hours of clerical time per covered entity, at an hourly wage of $19,6 for a total of
$199,680,975 ($247 blended labor cost per covered entity x 808,425 entities).
13.

Estimated Capital/Other Non-Labor Costs

Commission staff believes that the FPLA Rules impose negligible capital or other
non-labor costs, as the affected entities are likely to have the necessary supplies and/or
equipment already (e.g., offices and computers) for the information collections discussed above
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 $40,000. This represents
attorney and investigator costs, and includes employee benefits.

respectively, for food and beverage stores, general merchandise stores, and miscellaneous store retailers) compiled
by PricewaterhouseCoopers, LLC for the National Retail Federation report, “Retail’s Impact Across America”
(https://nrf.com/advocacy/retails-impact). Commission staff estimated the number of wholesalers (44,719)
(https://factfinder.census.gov/bkmk/table/1.0/en/ECN/2012_US/42SLLS1) and manufacturers (28,668)
(https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_31SG1&prodT
ype=table) based on 2012 Economic Census data. Although the stated number of respondents suggests precision,
it is an estimate in that it aggregates the number of entities under industry codes that FTC staff believes reflect
entities subject to the FPLA. But, even allowing for industries that may apply, the Census data do not separately
break out non-household products. Accordingly, the source information is over-inclusive and thus overstates what
is actually subject to the FPLA.
4

Based on “General and Operations Managers” ($58.70), rounded up to $60, available from Bureau of Labor
Statistics, Economic News Release, March 31, 2017, Table 1, “National employment and wage data from the
Occupational Employment Statistics survey by occupation, May 2016” (“BLS Table 1”).
https://www.bls.gov/news.release/ocwage.nr0.htm
5

“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 Rules. The wage
estimate is based on mean hourly wages for “Computer support specialist” ($27.21), rounded. See BLS Table 1.
6

See id. The clerical wage estimate is a rounded average of mean hourly wages for “computer operators”
($21.10) and “data entry and information processing workers” ($16.24).

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15.

Program Changes or Adjustments

The revised burden hour estimate reflects an increased number of affected entities, thus
accounting for an increase in cumulative burden hours (the estimate of ten hours per respondent,
however, remains unchanged). Estimated labor costs increase, a reflection of the increased
burden hour estimate paired with updated increases in hourly labor amounts 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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