```

[Senate Hearing 107-528]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 107-528
 
   S. 1233, THE PRODUCT PACKAGING PROTECTION ACT: KEEPING OFFENSIVE 
                    MATERIAL OUT OF OUR CEREAL BOXES

=======================================================================

                                HEARING

                               before the

                       SUBCOMMITTEE ON ANTITRUST,
                    BUSINESS RIGHTS, AND COMPETITION

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION
                               __________

                             AUGUST 1, 2001
                               __________

                          Serial No. J-107-35
                               __________

         Printed for the use of the Committee on the Judiciary

                     U.S. GOVERNMENT PRINTING OFFICE
80-422                       WASHINGTON : 2002
________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001

                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ORRIN G. HATCH, Utah
JOSEPH R. BIDEN, Jr., Delaware       STROM THURMOND, South Carolina
HERBERT KOHL, Wisconsin              CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         ARLEN SPECTER, Pennsylvania
RUSSELL D. FEINGOLD, Wisconsin       JON KYL, Arizona
CHARLES E. SCHUMER, New York         MIKE DeWINE, Ohio
RICHARD J. DURBIN, Illinois          JEFF SESSIONS, Alabama
MARIA CANTWELL, Washington           SAM BROWNBACK, Kansas
JOHN EDWARDS, North Carolina         MITCH McCONNELL, Kentucky
       Bruce A. Cohen, Majority Chief Counsel and Staff Director
                  Sharon Prost, Minority Chief Counsel
                Makan Delrahim, Minority Staff Director
                                 ------                                

      Subcommittee on Antitrust, Business Rights, and Competition

                   HERBERT KOHL, Wisconsin, Chairman
PATRICK J. LEAHY, Vermont            MIKE DeWINE, Ohio
RUSSELL D. FEINGOLD, Wisconsin       ORRIN G. HATCH, Utah
CHARLES E. SCHUMER, New York         STROM THURMOND, South Carolina
MARIA CANTWELL, Washington           ARLEN SPECTER, Pennsylvania
JOHN EDWARDS, North Carolina         SAM BROWNBACK, Kansas
               Victoria Bassetti, Majority Chief Counsel
                 Peter Levitas, Minority Chief Counsel

                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

DeWine, Hon. Mike, a U.S. Senator from the State of Ohio.........     3
Durbin, Hon. Richard J., a U.S. Senator from the State of 
  Illinois.......................................................    24
Kohl, Hon. Herbert, a U.S. Senator from the State of Wisconsin...     1

                               WITNESSES

Burris, David, Businessman, Baker City, Oregon...................     7
Fisher, Alice, Deputy Assistant Attorney General, Criminal 
  Division, Department of Justice, Washington, D.C...............     5
Petruccelli, Paul, Chief Marketing Counsel, Kraft Foods North 
  America, Inc., Northfield, Illinois............................     9
Sarasin, Leslie, President and Chief Executive Officer, American 
  Frozen Food Institute, McClean, Virginia.......................    14

                       SUBMISSIONS FOR THE RECORD

American Bakers Association, American Frozen Food Institute, Food 
  Distributors International, Food Marketing Institute, General 
  Mills, Grocery Manufacturers of America, Independent Bakers 
  Association, Kellogg's, Kraft Foods, National Food Processors 
  Association, National Frozen Pizza Institute, joint letter.....    22
American Free Trade Association, Miami, FL, statement............    22
Anti-Defamation League of B'nai B'rith, New York, NY, letter.....    24
General Mills, Inc., Austin P. Sullivan, Jr., Senior Vice 
  President, Corporate Relations, Minneapolis, MN, letter........    25
Kellogg Company, George A. Franklin, Vice President, External 
  Affairs, Battle Creek, MI, letter..............................    26

   S. 1233, THE PRODUCT PACKAGING PROTECTION ACT: KEEPING OFFENSIVE 
                    MATERIAL OUT OF OUR CEREAL BOXES

                              ----------                              

                       WEDNESDAY, AUGUST 1, 2001

                                       U.S. Senate,
           Subcommittee on Antitrust, Business Rights, and 
                   Competition, Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:06 p.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Herb Kohl, 
Chairman of the Subcommittee, presiding.
    Present: Senators Kohl and DeWine.

OPENING STATEMENT OF HON. HERBERT KOHL, A U.S. SENATOR FROM THE 
                       STATE OF WISCONSIN

    Chairman Kohl. The Antitrust and the Business Rights 
Subcommittee will come to order.
    Today's hearing responds to a disturbing trend of product 
tampering--the placement of hate-filled literature into the 
boxes of food that Americans bring home from the grocery store 
every day. Too many Americans have recently opened groceries 
and found offensive, racist, anti-Semitic, pornographic and 
hateful leaflets. In the last few years, food manufacturers 
have received numerous complaints from consumers who report 
finding such literature. Hundreds more incidents have likely 
gone unreported, and this behavior is downright shameful.
    No one should have to face this type of assault in the 
privacy of his or her home, and these incidents can be 
especially harmful to children. Take, for example, the story of 
8-year-old Mario Alexander, who discovered hateful literature 
in his favorite cereal box. Mario was very capable of reading 
the handbill he found and, as a result, he was forced to deal 
with a hateful issue long before he was mature enough to 
understand it.
    These are not isolated occurrences. In fact, Kraft Foods 
has documented more than 80 incidents in the past 4 years 
alone, which is almost one every 2 weeks. General Mills has 
documented an additional 25 cases a year, and Kellogg's reports 
many more. Of course, there is no way to calculate the number 
of incidents that go unreported. Many other manufacturers and 
distributors also have stories about this type of product 
tampering.
    So the companies that make these products are also victims. 
They have their names and reputations slandered by this 
activity. As a former grocery store owner myself, I can tell 
you that the store itself that sells these products is injured 
as well. The consumer establishes a trust with their grocery 
store, and incidents like the ones we are discussing today 
violate that trust and harm that business.
    Unfortunately, when consumers or companies turn to the 
authorities, they cannot be helped. According to the FBI and 
the Food and Drug Administration's Office of Criminal 
Investigation, these actions are not covered by Federal product 
tampering statutes. A loophole in Federal antitampering laws 
allows it to go unpunished, and in only a couple of States laws 
are in place. So, along with Senators Hatch, Leahy, Mike DeWine 
and Durbin, we introduced a Product Packaging Protection Act of 
2001 to close this loophole in Federal product tampering law 
and protect consumers.
    This is a small, but meaningful, thing we can do to make 
our current laws more effective and to give consumers and 
companies the help they need. The Product Packaging Protection 
Act of 2001 would prohibit the placement of any writing or 
other material inside a consumer product without the permission 
of the manufacturer, authorized distributor or retailer. 
Closing this gap in Federal law would appropriately punish 
people who violate the integrity of the food product, 
compromise consumers' faith in the food they purchase in a 
grocery store, and damage the good name and reputation of the 
food manufacturer.
    Opening a cereal box in the privacy of your own home should 
not be risky or traumatic. Unfortunately, for one of our 
witnesses today, it was, just like it was for 8-year-old Mario 
Alexander and hundreds more. A small, simple change to a 
Federal law can help, and so we should do it.
    We look forward today to an informative hearing. And I 
would now like to call on my colleague and former chairman of 
this committee, who will be a chairman again, I am sure, a man 
whom I delight in working with and for, Senator Mike DeWine.
    [The prepared statement of Senator Kohl follows:]

   Statement of Hon. Herbert Kohl, a U.S. Senator from the State of 
                               Wisconsin

    Today's hearing responds to a disturbing trend in product 
tampering--the placement of hat-filled literature into the boxes of 
food that Americans bring home from the grocery store every day.
    Too many Americans have recently opened groceries and found 
offensive, racist, anti-Semitic, pornographic and hateful leaflets. In 
the last few years, food manufacturers have received numerous 
complaints from consumers who report finding such literature. Hundreds 
more incidents have likely gone unreported.
    This behavior is outright shameful. No one should have to face this 
type of assault in the privacy of his or her home. And these incidents 
can be especially harmful to children. Take for example the story of 
eight-year-old Mario Alexander who discovered offensive literature in 
his favorite cereal box. Mario was very capable of reading the handbill 
he found, and as a result he was forced to deal with a hateful issue 
long before he was mature enough to understand it.
    These are not isolated occurrences. In fact, Kraft Foods has 
documented more than 80 incidents in the past four years, almost one 
every two weeks. General Mills has documented an additional 25 cases 
per year, and Kellogg's reports many more. Of course, there is no way 
to calculate the number of incidents that go unreported. Many other 
manufacturers and distributors also have stories about this type of 
product tampering.
    So, the companies that make these products are also victims. They 
have their names and reputations slandered by this activity. And, as a 
former grocery store owner, I can tell you that the store that sells 
these products is injured as well. A consumer establishes a trust with 
their grocery store and incidents like the ones we're discussing today 
violate that trust and harm that business.
    Unfortunately, when consumers or companies turn to the authorities, 
they cannot be helped. According to the FBI and the Food and Drug 
Administration's Office of Criminal Investigation, these actions are 
not covered by federal product tampering statutes. A loophole in 
federal anti-tampering law allows it to go unpunished. And only a 
couple of states have laws. So, along with Senators Hatch, Leahy, 
DeWine and Durbin, we introduced the Product Packaging Protection Act 
of 2001 to close this loophole in federal product tampering law and 
protect consumers.
    This is a small but meaningful thing we can do to make our current 
laws more effective and to give consumers and companies the help they 
need. The Product Packaging Protection Act would prohibit the placement 
of any writing or other material inside a consumer product without the 
permission of the manufacturer, authorized distributor, or retailer. 
Closing this gap in federal law would appropriately punish people who 
violate the integrity of the food product, compromise reputation of the 
food manufacturer.
    Opening a cereal box in the privacy of your own home shouldn't be a 
risky or traumatic even. Unfortunately, for one of our witnesses today, 
it was. Just like it was for eight-year-old Mario Alexander and 
hundreds more. A small, simple change to a federal law can help, and we 
should do it.

STATEMENT OF HON. MIKE DEWINE, A U.S. SENATOR FROM THE STATE OF 
                              OHIO

    Senator DeWine. Mr. Chairman, thank you very much. Let me 
thank you for holding this hearing and for introducing this 
bill. Along with you, I am concerned about this relatively new 
type of product tampering that is currently not penalized under 
our law.
    This tampering does not involve inserting harmful 
ingredients into food products, but rather it involves the 
placement of hate-filled literature, hate-filled literature 
placed into boxes of cereal or other food products, products 
that millions of Americans purchase every day. While this type 
of product tampering may not send someone to the hospital, it 
is still very harmful to innocent victims.
    As you have mentioned, Kraft Food and other companies have 
received and documented numerous complaints in recent years 
involving consumers who unwittingly opened up the product only 
to be shocked by the appearance of offensive, racist, 
pornographic and other hateful material. We have no clear 
indication of how many victims have suffered from this type of 
tampering, but we know there are many. Unfortunately, when 
these victims report these hateful acts, law enforcement 
officials must respond that they are now powerless to stop this 
offensive and harmful activity.
    According to the Federal Bureau of Investigation and the 
Food and Drug Administration's Office of Criminal 
Investigation, these actions are not currently covered by 
Federal product tampering statutes. Those laws only cover the 
actual products themselves, but not the packaging. Now, in 
response to incidents in their respective States, both the 
States of New Jersey and California have recently passed laws 
to criminalize this behavior, and these States certainly should 
be commended. However, I believe that we must do more.
    The bill that the chairman and Senator Hatch have 
sponsored, along with Senator Leahy, the Product Packaging 
Protection Act of 2001, would prohibit the placement of any 
writing or other material inside a consumer product without the 
permission of the manufacturer, authorized distributor or the 
retailer. Closing this gap in Federal law would appropriately 
punish those whose actions harm the American consumers and 
force their hateful messages into our homes. This legislation 
would finally give law enforcement agencies the ability to come 
to the aid of these victims.
    So, Mr. Chairman, I look forward to hearing from the 
witnesses today, and exploring ways that we can put an end to 
this offensive product tampering once and for all.
    I thank the chair.
    [The prepared statement of Senator DeWine follows:]

  Statement of Hon. Mike DeWine, A U.S. Senator from the State of Ohio

    Good afternoon. Let me begin by thanking Chairman Kohl for holding 
this hearing today. Along with my colleagues, I am concerned about a 
new type of product tampering that is not penalized under current law. 
This tapering doesn't involve inserting harmful ingredients into food 
products, But rather involves the placement of hate-filled literature 
into boxes of cereal or other food packages--products that millions of 
Americans purchase on a daily basis. While this type of product 
tampering may not send someone to the hospital, it is still very 
harmful to innocent consumers.
    Kraft Foods Company and others have received and documented 
numerous complaints in recent years involving consumers who unwittingly 
opened products--only to be shocked by the appearance of offensive, 
racist, pornographic, and other hateful materials. We have no clear 
indication of how many victims have suffered from this type of product 
tampering. Unfortunately, when these victims report these hateful acts, 
law enforcement officials must respond that they are powerless to stop 
this offensive and harmful activity. According to the Federal Bureau of 
Investigations and the Food and Drug Administration's Office of 
Criminal Investigation, these actions are not covered by federal 
product tampering statutes. Those laws only cover the actual products, 
themselves, not the packaging. In response to incidents in their 
respective states, both New Jersey and California passed laws to 
criminalize this behavior. These states should be commended. However, 
we must do more.
    The bill that Senators Kohl and Hatch have sponsored, which Senator 
Leahy and I have co-sponsored--the ``Product Packaging Protection Act 
of 2001''--would prohibit the placement of any writing or other 
material inside a consumer product without the permission of the 
manufacturer, authorized distributor, or retailer. The penalty for 
violation of this measure would be a fine of up to $250,000 per offense 
and/or imprisonment of up to three years.
    Closing this gap in federal law would appropriately punish those 
who force their hateful messages into American homes. This legislation 
would finally give law enforcement agencies the ability to come to the 
aid of these victims.
    I look forward to hearing from the witnesses today and exploring 
ways that we can put an end to this offensive product tampering--once 
and for all. Thank you.

    Chairman Kohl. Thank you, Senator DeWine.
    Today, we have four distinguished witnesses with us. We 
would like to particularly thank the Department of Justice and 
its representative, Deputy Assistant Attorney General Alice 
Fisher, testifying today on the same panel as the rest of our 
witnesses. This will help us expedite the hearing.
    Our first witness, Alice Fisher, is Deputy Assistant 
Attorney General in the Criminal Division at the Department of 
Justice. Prior to joining the Department of Justice, Ms. Fisher 
served as a partner in the Litigation Department of Latham & 
Watkins. It is good to have you with us today, Ms. Fisher.
    Also joining us today is Mr. David Burris, who has made the 
long trip from Baker City, Oregon, to give his testimony. Mr. 
Burris had the unfortunate experience of discovering some of 
this hateful material while preparing his Thanksgiving dinner. 
Mr. Burris attended Blue Mountain College and has owned and 
operated his own pet supply business for 20 years. Mr. Burris 
also helped to start the Baker County People for Human Dignity.
    Also joining us today is Mr. Paul Petruccelli, chief 
marketing counsel for Kraft North America. Mr. Petruccelli is a 
member of the Kraft team that addresses significant sources of 
consumer complaints, such as those related to unauthorized 
print materials. Mr. Petruccelli is an expert in food law, 
including marketing and regulatory issues, having served 13 
years at the Federal Trade Commission's Bureau of Consumer 
Protection. He received his law degree from the Rutgers School 
of Law. Kraft is a very important company in my State of 
Wisconsin, and so we thank you for being here.
    And, finally, we have Ms. Leslie Sarasin, president and 
chief executive officer of the American Frozen Foods Institute. 
Ms. Sarasin has been with the institute for 12 years and was 
elected as its president in 1999. Ms. Sarasin earned her J.D. 
at the University of San Diego, after receiving her bachelor's 
degree from Smith College.
    So we thank you all for being here today. We look forward 
to your testimony. We ask you to limit your testimony to 5 
minutes each. However, we will hold the record open for 1 week 
to allow you to submit written testimony of any length. After 
you have presented your testimony, members will have an 
opportunity to ask questions. So, if you would all come forward 
at this time.
    Ms. Fisher, we will start with your testimony, and we are 
looking forward to hearing from you.

 STATEMENT OF ALICE FISHER, DEPUTY ASSISTANT ATTORNEY GENERAL, 
   CRIMINAL DIVISION, DEPARTMENT OF JUSTICE, WASHINGTON, D.C.

    Ms. Fisher. Thank you, Senator.
    Good afternoon, Mr. Chairman and Ranking Member DeWine. I 
am pleased to appear before you today to discuss S. 1233, the 
Product Packaging Protection Act of 2001. This bill would 
provide criminal penalties for the unauthorized insertion of 
written material into consumer products and the packaging of 
consumer products prior to the sale of these items.
    Consumers in places as far apart as New Jersey and 
Washington State have had the unsettling experience of opening 
products, such as boxes of cereal, that appear untampered with 
and finding obscene, racist, and offensive material has been 
hidden inside. For example, a few years ago there were a report 
of numerous complaints of racist messages appearing in ice 
cream cups and cracker boxes. In cases such as these, young 
children have been exposed to offensive messages and their 
parents have had no opportunity to protect them.
    Existing Federal law does not address this nationwide 
problem. So, when victims have sought redress from our Federal 
prosecutors, prosecutors have not had the tools to combat this 
activity. Currently, the primary tool for attacking product 
tampering is Section 1365 of Title 18 of the United States 
Code, the Federal Anti-Tampering Act. That law makes it a crime 
to tamper with consumer products, or the packaging of such 
products, where the perpetrator acts with reckless disregard 
for, or indifference to, the risk of death or serious bodily 
injury to an individual. This law was the result of the well-
known Tylenol tampering incident in 1982, which resulted in 
seven deaths. There have been several Federal prosecutions 
under this law since its enactment.
    Also, under the Federal Anti-Tampering Act, it is a crime 
to taint a consumer product with the intent to damage a 
business. This section of the law focuses on harm to the 
business, regardless of whether the perpetrator intends harm to 
the individual. Again, however, this section only criminalizes 
activity that actually taints a product, its labeling or its 
container.
    The bill you are now considering would supplement the 
existing statute by providing criminal penalties for product 
tampering that takes the form of inserting written materials, 
such as leaflets or pamphlets, into the packages without the 
approval of the manufacturer, retailer, distributor or the 
consumer, even if the product or the package is not 
adulterated. Although we do not have fully comprehensive 
statistics available, we do know that a number of product 
manufacturers have experienced complaints concerning the 
unauthorized insertion of such materials. Even when the act of 
inserting such materials does not involve the adulteration of 
the product contained within the package, it clearly raises 
questions in the minds of the consumers concerning the 
integrity of the product that they are about to use or consume. 
Thus, the result of this activity is harm to both businesses 
and consumers who are exposed to the unwanted and often 
shocking materials.
    S. 1233 would prohibit the placing of any written material 
before the sale of such a product. It is, thus, a content-
neutral regulation that does not discriminate among categories 
of speech, rather it is targeted toward the real problem 
businesses and consumers face when someone places materials 
into our foods and our medicines.
    In conclusion, the right of free expression available to 
all Americans under the First Amendment of the Constitution 
affords our citizens ample opportunity to express their views. 
It is inappropriate that consumer products be used as the 
unauthorized vehicle for conveying beliefs or illicit messages. 
The rights of manufacturers to market their product without 
interference and the needs of consumers to be free from doubts 
concerning the integrity of such products must be protected.
    Mr. Chairman, thank you for giving the Department the 
opportunity to express its views on this legislation. We would 
be pleased to discuss this proposal with you and other Federal 
agencies, such as the Food and Drug Administration, that might 
be affected by its enactment. I would be happy to answer any 
questions you may have.
    [The prepared statement of Ms. Fisher follows:]

Statement of Alice Fisher, Deputy Assistant Attorney General, Criminal 
                  Division, U.S. Department of Justice

    Good afternoon, Mr. Chairman and Members of the Subcommittee. I am 
pleased to appear before you today to discuss S. 1233, the ``Product 
Packaging Protection Act of 2001.'' This bill would provide criminal 
penalties for the unauthorized insertion of written material into 
consumer products and the packaging of consumer products, prior to the 
sale of the items. Consumers in places as far apart as New Jersey and 
Washington state have had the unsettling experience of opening 
products, such as boxes of cereal, that appear untampered with and 
finding that obscene, racist or other offensive material has been 
surreptitiously placed inside. For example, a few years ago there was a 
report of over numerous complaints about racist messages appearing in 
ice cream cups and cracker boxes. In cases such as these, young 
children have been exposed to offensive messages, and their parents 
have had no opportunity to protect them. Existing federal law does not 
address this nationwide problem.
    Currently, the primary tool for attacking product tampering is 
Section 1365 of Title 18 of the United States Code, the Federal Anti-
Tampering Act. That law makes it a crime to tamper with consumer 
products, including the packaging and labeling of such products, where 
the perpetrator acts with reckless disregard for, or indifference to, 
the risk that another person will suffer death or bodily injury. This 
law was the result of the well-known Tylenol tampering incident in 
1982, which resulted in seven deaths. There have been several federal 
prosecutions under this law since its enactment.
    Under the Federal Anti-Tampering Act, it is also a crime to taint a 
consumer product or render its labeling or container false or 
misleading with the intent to damage a business. This section of the 
law focuses on the intent to cause damage to a business, regardless of 
whether the perpetrator has any intent to cause injury or harm to the 
individual who buys and/or uses the product. Again, however, the 
section only criminalizes activity that actually taints a product, its 
labeling, or its container.
    The bill you are now considering would supplement the existing 
statute by providing criminal penalties for product tampering that 
takes the form of inserting written material into packages without the 
approval of the manufacturer, retailer, or authorized distributor, even 
if the product contained within the package is not adulterated. 
Although we do not have fully comprehensive statistics available, we do 
know that a number of product manufacturers have experienced complaints 
concerning the unauthorized insertion of written material into the 
packaging of their products. Even when the act of inserting such 
material does not involve an adulteration of the product contained 
within the package, it clearly raises questions in the minds of 
consumers concerning the integrity of the product that they are about 
to use or consume. Thus, the result of this activity is harm to both 
businesses and consumers, who are exposed to unwanted, and often 
shocking, materials.
    S. 1233 would prohibit the placing of ``any'' writing inside 
consumer products before the sale of such a product. It is thus a 
content-neutral regulation that does not discriminate among categories 
of speech. It is targeted toward the real problem businesses and 
consumers face when someone places unauthorized, hidden materials into 
a consumer product.
    As a technical matter, other federal statutes (e.g.,18 U.S.C. 
Sec. 2332b(g)(3)) cross reference the definition of ``serious bodily 
injury'' contained in what is now section 1365(g)(3). Because S. 1233 
would redesignate subsection (g) of 18 U.S.C. Sec. 1365 as subsection 
(h), a conforming amendment should be made to 18 U.S.C. 
Sec. 2332b(g)(3) and any other statute that cross references section 
1365(g)(3).
    In conclusion, the right of free expression available to all 
Americans under the First Amendment of the Constitution affords our 
citizens ample opportunity to express their views. It is inappropriate 
that consumer products be used as the unauthorized vehicle for 
conveying beliefs or illicit messages. The rights of manufacturers to 
market their products without interference and the need of consumers to 
be free from doubts concerning the integrity of the products they have 
purchased must be protected.
    Mr. Chairman, thank you for giving the Department the opportunity 
to express its views on this legislation. We would be pleased to 
discuss this proposal with you and with other federal agencies that 
might be affected by its enactment, such as the Food and Drug 
Administration, in greater detail. I would be happy to answer any 
questions you may have.

    Chairman Kohl. Thank you, Ms. Fisher.
    Mr. Davis Burris?

   STATEMENT OF DAVID BURRIS, BUSINESSMAN, BAKER CITY, OREGON

    Mr. Burris. Chairman Kohl and Senator DeWine, I am David 
Burris from Baker City, Oregon. I have lived in Baker City most 
of my life and own and operate a small pet supply business 
there. Baker City is about 10,000 population and has a very 
interesting downtown historic district that has received 
national recognition for its restoration of gold mining era 
buildings. It is an excellent place to live and raise a family. 
As a resident, I have always felt very secure. I felt the 
security until last Thanksgiving time when I was getting ready 
to prepare a Thanksgiving meal for my guests. I appreciate the 
opportunity to testify today and tell you about an incident at 
that time that changed all of this.
    On November 22, 2000, I went to my local Safeway 
supermarket, which I shop at on a regular basis. As I was 
shopping, I purchased a JELL-O No Bake Strawberry Cheesecake 
mix. Later that evening, I decided to make it, and when I 
opened the box, I noticed a coupon--an example here. I decided 
to leave it in the box and retrieve it later before disposing 
of the box. When I went back to get the coupon, which was 
folded, I opened it and noticed a black Nazi swastika and some 
wording saying, ``Deport `the N word,''' which I will not use. 
It is best not to say that. It also had initials of a group and 
a postal box number in Nebraska. This coupon had been made on a 
copying machine of some sort.
    At first, I was totally shocked, as I am aware of the Aryan 
Nation group in Idaho nearby. I thought this might be some sort 
of joke, but realized it was not. I showed it to my guests, and 
they were shocked also. As I talked with them about it, we 
decided the cake itself should not be consumed. It might be 
contaminated. The consumer hot line number was on the box, so I 
decided to call JELL-O to let them know about this.
    When I contacted JELL-O, the lady there said she was going 
to put me right through to someone that knew more about this, 
and they would talk to me. That person said they would like to 
have the box and the coupon. They asked me if there was any 
signs of the box having been tampered with. I told her, no, the 
box had no signs and was heat-sealed at the factory. They also 
asked me the name of the store and the street location of it. I 
was told by this person that a courier would be at my home the 
next morning at 10 a.m. to pick up the box and the coupon. The 
courier arrived at 9:40 a.m. He took possession of the box and 
the coupon and placed them in a Ziploc bag.
    I have to say that since this incident, I am very insecure 
with packaged products I buy. I look at the box, and if I 
notice anything unusual, I avoid it. I doubt I will ever feel 
secure again in this regard. It has also changed the way my 
friends shop too. Something must be done to protect people from 
this. If a coupon can be inserted in a box in a number of 
different company's products, what can these people do to the 
product? The fact that these products are distributed 
nationwide scares me. What if a child had opened a box and read 
this hateful material?
    Thank you for letting me share my story. I hope it helps 
you get some legislation passed that will deter this kind of 
activity.
    [The prepared statement of Mr. Burris follows:]

       Statement of David Burris, Businessman, Baker City, Oregon

    Chairman Kohl and Senator DeWine, I am David Burris from Baker 
City, Oregon. I have lived in Baker City most of my life and own and 
operate a small pet supply business there. Baker City is about 10,000 
population and has a very interesting downtown historic district that 
has received national recognition for its restoration of gold mining 
area buildings. It is an excellent place to live and raise a family. As 
a resident I have always felt very secure. I felt this security till 
last year at Thanksgiving time when I was getting ready to prepare a 
Thanksgiving meal for my guests. I appreciate the opportunity to 
testify today and tell you about the Incident at that time that changed 
all of this.
    On November 22, 2000, I went to my local Safeway supermarket which 
I shop at on a regular basis. As I was shopping I purchased a Jello No 
Bake Strawberry Cheesecake Mix. Later that evening I decided to make it 
and when I opened the box I noticed a coupon. I decided to leave it in 
the and retrieve it late before disposing of the box. When I went back 
to get the coupon, which was folded, I opened it and noticed a black 
Nazi swastika and some wording saying deport ``The N word.'' It also 
had the initials of a group and postal box number in Nebraska. This 
coupon had been made on a copying machine of some sort. At first I was 
totally shocked as I am very aware of the Aryan Nation group in Idaho. 
I thought this might be some sort of joke but realized it wasn't. I 
showed it to my guests and they were shocked also. As I talked with 
them about it we all decided that the cake itself could be 
contaminated. The consumer hotline number was on the box so I decided 
to call to let Jello know about this. When I contacted Jello the lady 
there said that she was going to put me right through to someone that 
knew more about this and they would talk to me. That person said they 
would like to have the box and the They asked me if there were any 
signs of the box having been tampered with. I told her no, that the box 
has no signs and was heat sealed at the factory. They also asked me the 
name of the store and the street location of it. I was told by this 
person that a courier would be at my home the next morning at 10 AM to 
pickup the box and coupon. The courier arrived at 9:40 AM. He took 
possession of both the box and coupon and placed them in a Ziploc bag.
    On November 28, 2000 I received a letter from Carla Mikell-
executive representative at the Jello/Kraft Foods Consumer Resource and 
Information Center. She said she was sorry to learn about the offensive 
literature in the Jello No Bake Desert Cheesecake with Strawberry 
Topping. She said that my coupon sounded similar to reports they had of 
other consumers finding this sort of printed materials in a number of 
products including those from different companies in the New Jersey 
stores. She told me that they were actively working with law 
enforcement and other companies to investigate the source of this 
printed material in New Jersey and that this might be related in some 
way. She was very nice and sent a number of free food coupons.
    I have to say that since this incident I am very insecure with 
packaged food products I buy. I look at the box and if I notice 
anything unusual I avoid it. I doubt that I will ever feel secure again 
in this regard. It has also changed the way my friends shop too. 
Something must be done to protect people from this. If a coupon can be 
inserted in a box and a number of different companies products. . . 
.what can these people do to the product? The fact that these products 
are distributed nationwide scares me. What if a child had opened a box 
and read this hateful material?
    Thank you for letting me share my story. I hope it helps you to get 
some legislation passed that will deter this kind of activity.

    Chairman Kohl. We thank you, Mr. Burris.
    Mr. Paul Petruccelli?

 STATEMENT OF PAUL PETRUCCELLI, CHIEF MARKETING COUNSEL, KRAFT 
        FOODS NORTH AMERICA, INC., NORTHFIELD, ILLINOIS

    Mr. Petruccelli. Mr. Chairman, Senator DeWine, my name is 
Paul Petruccelli, and I am chief marketing counsel for Kraft 
Foods North America. I am very grateful for the opportunity to 
testify on behalf of Kraft 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. We market some of 
the best-known and best-loved food products in this country, 
including DiGiorno pizza, Oscar Mayer hot dogs, Post cereals, 
Kool-Aid soft drinks, Nabisko cookies and crackers, to name 
only a very few. Our products can be found in a pantry, a 
refrigerator or a freezer in virtually every home in the land.
    Kraft has spent decades building consumers' trust in its 
brands and in the product quality that they represent. And we 
are 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 complaints since 1997 in 
this regard. To date, in 2001, we have received 15 such 
complaints, putting us on a pace to receive approximately 25 
this year.
    While I did not think it appropriate to distribute or quote 
from these materials, let me give you a flavor from some of the 
reports that we received. 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 and in Post 
Shredded Wheat. A Pennsylvania consumer discovered an anti-meat 
brochure inside the box of a DiGiorno frozen pizza, and so on, 
and so on.
    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 really 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 
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 some of these uglier elements of 
our society. Aside from the emotional impact of the incidents, 
these consumers rightly conclude that the product they 
purchased has been tampered with, and their first instinct, of 
course, is to blame Kraft Foods, despite our assurances to the 
contrary.
    Even those consumers who are mollified somewhat by our 
explanations may have lost a degree of trust in Kraft Foods 
that we can never quite hope to recapture, and of course we 
have no way of knowing how many consumers' trust we may lose 
from what are undoubtedly the many consumers who encounter 
these materials upon one of our packages, but never report the 
incident to us.
    These incidents of tampering amount to product hijacking. 
They cause significant injury to consumers, to manufacturers 
and to stores. Consumers may be emotionally harmed as a result 
of being accosted by some of this literature, a child may be 
traumatized, adults may be offended by presentation of 
particular beliefs or exhortations to take actions against 
particular groups. Manufacturers and retailers, of course, may 
be injured by the loss of consumer confidence and potential 
business that ensues from such an incident. And in this regard, 
it bears emphasis that we always operate on the assumption that 
any complaint that we receive is evidence of at least 10 other 
consumers who did not report the complaint to us. The injury to 
the reputation of a retail store or to the producer of the 
affected product is incalculable and, we believe, grievous.
    Unfortunately, several elements of the current Federal 
Anti-Tampering Act render it ineffective to prevent the harm 
that I have just described. 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 Senate bill 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.
    While we are 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'' so 
that the bill would cover situations in which these materials 
are placed on the package, not just in the package. In our 
experience, there have been a number of such incidents, and we 
believe that conduct should be prohibited as well.
    Mr. Chairman, the bill could help us address the 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.
    [The prepared statement of Mr. Petruccelli follows:]

Statement of Paul J. Petruccelli, Chief Marketing Counsel, Kraft Foods 
                             North America

    Mr. Chairman, and distinguished Members of the Committee:
    My name is Paul Petruccelli, and I am Chief Marketing Counsel for 
KraftFoods North America. Before joining Kraft, I spent thirteen years 
as anattorney for the Federal Trade Commission's Bureau of Consumer 
Protection,in Washington, D.C. I am grateful to the Committee for 
extending to Kraftan invitation to testify regarding the importance of 
the proposed ProductPackaging 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 andManufacturers
    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 
        authorizeddistributor, intentionally tampers with a consumer 
        product that is sold ininterstate or foreign commerce by 
        knowingly placing or inserting anywriting in the consumer 
        product, or the container for the consumer product,before the 
        sale of the consumer product to any consumer shall be 
        finedunder this title, imprisoned not more than three years, or 
        both.
    The bill would also clarify that a "writing" includes any form 
ofrepresentation or communication.
    This new language would provide the Federal government with the 
authorityit needs to more effectively protect consumers against 
individuals whoinsert hateful, offensive, misleading, or simply 
unauthorized messages orpictures into the packages of consumer 
products. Without such protection,the current outbreak of unauthorized 
materials that have been found inpackages of consumer products across 
the country will continue unabated.Indeed, we are fearful that the 
practice may increase, as those with aparticular axe to grind may 
become increasingly emboldened by theirunchecked 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 consumerproduct, 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. Ilook forward to your questions.

    Chairman Kohl. We thank you, Mr. Petruccelli.
    Now, Ms. Leslie Sarasin.

  STATEMENT OF LESLIE SARASIN, PRESIDENT AND CHIEF EXECUTIVE 
   OFFICER, AMERICAN FROZEN FOOD INSTITUTE, MCLEAN, VIRGINIA

    Ms. Sarasin. Thank you, sir. Thank you, Chairman Kohl and 
Senator DeWine. I am Leslie Sarasin. I am president and CEO of 
the American Frozen Food Institute. I commend you on your work 
on this very important issue to the food industry and certainly 
appreciate the opportunity to speak today at this hearing.
    The American Frozen Food Institute, known as AFFI, is the 
national trade association that represents some 550 companies 
who are responsible for approximately 90 percent of the frozen 
food processed and sold annually in the United States, valued 
at approximately $60 billion. AFFI's members manufacture, 
freeze, and market products ranging from juice and branded and 
private label frozen vegetables to brand-name pizzas, entrees, 
meals, and gourmet desserts. As the representative of these 
manufacturers, AFFI is concerned with the recent incidents of 
offensive messages being placed in and on the packages of 
consumer products across the country.
    In recent years, there have been numerous reports from 
companies in the food industry of consumer complaints regarding 
offensive materials that consumers have found attached to or 
inserted in the packages of a variety of consumer products, 
including frozen foods. It is believed this 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 to product packaging in 
the store.
    The materials found inside product packages are extremely 
offensive, often containing pornography and messages of hate 
and encouraging violence against members of various ethnic, 
religious, or cultural groups. In instances in which consumers 
have discovered labels placed on packages by third parties, the 
text of these labels was either related to the product inside 
the packaging or another consumer product. As a result, many 
consumers mistakenly believe the manufacturer had supplied the 
messages.
    AFFI believes individuals should not be allowed to place 
such stickers on commercial products, since the tampering may 
detrimentally affect the confidence consumers have in the 
underlying product. For example, a consumer may open a frozen 
entree package and find a piece of paper containing hateful 
language and offensive graphic images. The consumer likely 
would lose trust in the manufacturer of the product and be wary 
of purchasing the same product or even products by the same 
manufacturer 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 the manufacturer is responsible for the 
entire product packaging. Finding materials in or on the 
packaging, therefore, likely will cause consumers to lose 
confidence in the safety of the actual product and int 
manufacturers safety precautions generally. Similarly, 
consumers may lose confidence in the store in which the product 
was purchased. For companies dependent on consumer patronage, 
development of consumer confidence in the companies' products 
or services is critical.
    Without the protection offered in S. 1233, AFFI believes 
these recent incidents of tampering will continue--further 
jeopardizing consumer privacy and consumer confidence in 
manufacturers and retailers.
    Some concern has been expressed that S. 1233 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. AFFI members are comfortable that 
Congress is creating a sufficient record, as a result of this 
hearing and the hearing held recently in the House of 
Representatives on H.R. 2621, 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 an invasion is 
particularly offensive, it warrants prosecution; an incidental 
or innocuous invasion doe 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 both the 3-year sentence and the fines related 
to violations of the act are minimums and not maximums. 
Therefore, prosecutors and courts retain a great deal of 
discretion in determining the incidents that merit prosecution 
and how best to sentence those who are convicted.
    Given the potentially traumatic effect on consumers and 
businesses of these abusive incidents, I respectfully submit 
that prosecutors and courts should be allowed latitude to 
punish those who do so as felons.
    Moreover, AFFI supports the provision contained in the 
House bill that prohibits placing materials in or on consumer 
products. AFFI believes this provision is significant, since 
misleading materials affixed to product packaging may just as 
significantly affect consumer confidence as those inserted in 
packaging.
    We believe S. 1233 will provide 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
    Thank you for this opportunity to appear today. I would be 
happy to answer any questions you may have.
    [The prepared statement of Ms. Sarasin follows:]

   Statement of Leslie G. Sarasin, CAE President and Chief Executive 
       Officer, American Frozen Food Institute, McLean, Virginia

    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 \1\ (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.
---------------------------------------------------------------------------
    \1\ 18 U.S.C. Sec. 1365 (2001).
---------------------------------------------------------------------------
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 entre 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 2001 Product Packaging 
    Protection Act of 2001 Would Benefit Consumers and Manufacturers
    The Product Packaging Protection Act of 2001 would 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 
3-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.

    Chairman Kohl. Thank you, Ms. Sarasin.
    Ms. Fisher, we will start with you. Do you see any 
constitutional problems with this bill? Someone suggested that 
the bill criminalizes political speech. We believe the bill is 
constitutional because the illegal act is the insertion of the 
material and not what is written on it.
    Ms. Fisher. Well, the bill on its face is content neutral 
and applies to any writing, not only political writing. So, 
therefore, it does not, in our view, criminalize political 
speech.
    Chairman Kohl. OK. What does the Justice Department do to 
make sure that statutes like these are applied in a way that 
respects the First Amendment?
    Ms. Fisher. Well, the Department enforces all laws, as they 
are written on their face, and this one does not impinge on the 
First Amendment. In addition, all Federal prosecutors take an 
oath to uphold the Constitution and are required to apply laws 
with regard to all individual's constitutional rights. In 
addition to that, whenever new legislation comes out, there are 
policy guidelines that come out with it that would highlight 
any potential First Amendment issues.
    Chairman Kohl. Thank you. Do you believe that statutes like 
these will help to deter people from putting offensive material 
in packages?
    Ms. Fisher. We certainly hope so. It is likely that there 
may not be a great number of cases brought under this statute, 
but having a prosecution of an individual or a group of 
individuals and the public notoriety surrounding that would 
provide a significant deterrent, along with the significant 
criminal penalties that go along with the activity.
    Chairman Kohl. Some have suggested, Ms. Fisher, that 
Congress should not legislate in this area, since Congress has 
passed Federal product tampering laws in 1994. It is our 
feeling that we are only improving the law or a law that 
already exists and not legislating a new law. Would you see it 
this way, also?
    Ms. Fisher. Yes, we do. We would see this as a 
supplementation of the existing law, the Federal Anti-Tampering 
Act.
    Chairman Kohl. OK. Thank you.
    Mr. Burris, we thank you, first of all, for coming all the 
way from Oregon to share your story with us. Hopefully, your 
efforts will be rewarded with this passage of this legislation.
    Mr. Burris, were you surprised to hear that there is no 
Federal law that prohibits these acts?
    Mr. Burris. I was really surprised. I thought there must be 
something. I was just totally surprised there was not.
    Chairman Kohl. OK. And has your experience changed your 
behavior in any way when it comes to grocery shopping today?
    Mr. Burris. It really does because I look at everything, 
like I said earlier, I look at everything I buy because I do 
not know. I mean, after this experience, I do not know what I 
am going to face. I check everything out real closely.
    Chairman Kohl. Do you go grocery shopping every week?
    Mr. Burris. Yes. I do a lot of checking, after that 
experience.
    Chairman Kohl. Do you shop at one of the chain stores?
    Mr. Burris. Yes, I shop at Safeway mostly.
    Chairman Kohl. Safeway?
    Mr. Burris. Right.
    Chairman Kohl. OK. We will get back to you, if you would 
like to make some additional comments.
    Ms. Sarasin and Mr. Petruccelli, we have heard about many 
incidents involving dry cereal boxes. Can you tell us what 
other types of foods are most frequently targeted. Are there 
some food products more susceptible to package tampering than 
others?
    Mr. Petruccelli. Well, I can tell you that we have seen the 
problem on a variety of different products, not just cereal 
boxes. For example, this was a JELL-O pudding, I believe, that 
you had, Mr. Burris.
    Mr. Burris. It was a strawberry cheesecake.
    Mr. Petruccelli. A strawberry cheesecake.
    We have seen it on Oscar Mayer Lunchables, we have seen it 
on several of our JELL-O products, I believe a Capris Sun 
product. I would have to sort of check my notes, Mr. Chairman, 
but on a number of different products, as well as frozen 
pizzas. We have had the problem on those products as well.
    Chairman Kohl. Ms. Sarasin, do you have any comment on that 
question?
    Ms. Sarasin. Yes. We have seen a number of incidents on the 
frozen side of the business, particularly as it relates to 
frozen pizzas. As you, perhaps more than most in the Senate, 
are aware, the nature of the packaging of frozen food products 
probably contributes to these incidents. Because of the 
perishable nature of the frozen food products, as you are 
aware, most frozen food products are packaged internally and 
then there is an external package around those to maintain the 
integrity and quality of the product. Most of these incidents 
appear to be situations in which the literature is inserted 
into the outer package, which does not come into contact, of 
course, with the inner food product because it is individually 
wrapped inside.
    It appears to me that perhaps the groups or the individuals 
who are engaged in this activity understand very well what the 
extent of the current Federal anti-tampering statute is, and 
they understand very well that that type of behavior is not 
prohibited by law. So they are pushing this sort of to the 
extent they can under the current statute without fear of being 
prosecuted.
    Chairman Kohl. Mr. Petruccelli, Ms. Sarasin, one of the 
most disturbing things about this behavior is what it does to 
children. There is growing evidence that hate groups often 
target children with their message. Do you have evidence that 
children's products are being singled out, Mr. Petruccelli?
    Mr. Petruccelli. I do not know whether I would say that 
they are being singled out, Mr. Chairman. I would say that we 
commonly have the problem with children's products. Alpha Bits 
cereal, for example, has been the subject of this kind of 
problem on a number of occasions, and, frankly, I have that 
sort of nightmare vision of a little child who learns how to 
spell Nazi by getting the information inside an Alpha Bits 
cereal box. I guess I would like to try and avoid that if I 
can.
    Chairman Kohl. Ms. Sarasin?
    Ms. Sarasin. You know, it is an interesting question 
because I think the definition of what we have traditionally 
called children's foods is probably changing. As we are all 
aware, children are more and more involved in the decision- 
making that is done when food purchases are made for the home. 
I think the industry statistic we use now is that 50 percent of 
frozen foods that are purchased in the home are influenced by 
children in the household. So that, in conjunction with the 
facts that so many children are at home alone after school 
preparing their own snacks when they get home from school and 
using the microwave to do it, and, fortunately, eating a lot of 
frozen foods when they do that, I think increasingly we have 
lots and lots of products that would be considered children's 
foods because children are preparing them in record numbers.
    So, yes, I think this definitely is influencing children's 
food, perhaps as much or more than others.
    Chairman Kohl. Mr. Petruccelli, few things can be more 
frustrating for a company like Kraft than to have your good 
name dragged into a situation of this sort. Can you give us an 
idea about the effect that these incidents have had on Kraft's 
brand name and tell us a little bit about what actions you have 
taken to counteract any negative publicity.
    Mr. Petruccelli. Well, I wish I could measure, in specific 
terms, in dollar terms, what the potential impact is on Kraft's 
brand names and Kraft's reputation, but I think it is the kind 
of thing that is just too hard to calculate.
    As I am sure you know, we spend millions of dollars a year 
advertising our brands, advertising our products. We spend 
millions of dollars trying to figure out how to make the 
packages appealing to consumers. We do a great many things in 
the community, contribute to the communities that we work in, 
that we live in--all part of our efforts to be well thought of 
as a corporate citizen, and this sort of thing just tears down 
a lot of those efforts.
    We can try to be comforting to someone like Mr. Burris when 
they contact us and try to provide some free product to them 
and, you know, indicate what we can about what the state of the 
law is and how we think it may have happened, but it is very 
difficult to get that corporate trust back once you start to 
lose it with individual consumers.
    Chairman Kohl. Ms. Sarasin, you mentioned in your written 
testimony that this sort of tampering affects not only the way 
consumers feel about the brand-name products, but also the 
grocery store where they purchase their product. Can you tell 
us a little bit about comments that you may have received from 
grocery stores.
    Ms. Sarasin. I do not have any specific anecdotes of 
comments that we have received from grocery stores, but I think 
it is important to note that among the groups that are very 
much in support of passage of this legislation are the Food 
Marketing Institute and the National Grocers Association, both 
of which represent retailers all across the country who are on 
the front line and experience this type of problem on a daily 
basis.
    Chairman Kohl. Mr. Petruccelli and Ms. Sarasin, Kraft and 
many other companies have done a good job of cataloguing the 
complaints about this activity. Do you think these reports are 
just the tip of the iceberg? Do you believe that there are many 
more incidents occurring than those we are aware of?
    Mr. Petruccelli. Yes, Mr. Chairman. I always believed that 
there are many more incidents occurring than those that we are 
aware of. The statistic that is commonly used by consumer 
affairs professionals is that every complaint represents, at 
best, 10 percent of the number of consumers who are actually 
affected by the problem, sometimes a much smaller percentage 
but, at best, 10 percent. So there were would certainly be many 
more consumers who are experiencing this kind of affront, but 
not reporting it to us.
    Chairman Kohl. Ms. Sarasin, do you believe that this is a 
national issue?
    Ms. Sarasin. Certainly I do. And I think, as I mentioned in 
my previous response, the support of national trade 
associations, in addition to the organizations that represent 
retailers all over the country, I am aware that there are some 
half-dozen or so other national trade associations that support 
this legislation that represent much broader categories than 
the frozen category, as well as niche organizations that 
represent the baking industry. So I would say, yes, this is 
very much of concern to national constituencies.
    Chairman Kohl. Thank you.
    When we have been asked about why are Federal laws needed 
in this area, we have answered that Congress has chosen to 
legislate in product tampering law. This bill simply makes a 
small amendment to the criminal code. Do you have any problems 
with the way in which we are going about this?
    Ms. Sarasin. Are you asking me?
    No, I do not have any problems with the way you are going 
about it. I think the issue that I mentioned, both in my 
written testimony and the verbal testimony of the ``in or on'' 
the packaging issue is one that we believe is very significant, 
and it is our hope that you will take another look at that and 
consider incorporating any types of stamps or stickers or other 
things that are affixed to the outside of the package, as well 
as that that is included in the package because we believe that 
the things that are on the outside of the package are no less 
offensive than those that are inside the package, and perhaps 
maybe even more offensive because more people see them if they 
are sitting on a supermarket shelf.
    Chairman Kohl. That is true.
    Ms. Sarasin. So I think that would be our No. 1 issue.
    Chairman Kohl. OK. Does anybody else have comments you 
would like to make before I begin to draw this hearing to a 
close?
    Ms. Fisher, Mr. Burris, anything you would like to say?
    Ms. Fisher. No, Senator. Thank you.
    Mr. Burris. No, I am fine.
    Chairman Kohl. We have received several important letters 
supporting this bill. We would like to insert into the record a 
letter of support from the Anti-Defamation League, one from 
General Mills, one from Kellogg's and another signed by a 
number of companies, including Kraft Foods, the American Bakers 
Association, the American Frozen Food Institute, Food 
Distributors International, the Food Marketing Institute, 
General Mills, the Grocery Manufacturers of America, the 
Independent Bakers Association, and the National Food 
Processors Association, Kellogg's, and the National Frozen 
Pizza Institute. We thank all of them, and we will make their 
letters a part of the hearing record.
    Chairman Kohl. If there are no further questions, we want 
to thank all of the witnesses for your testimony. It has been a 
very important hearing, in my judgment, and this has been very 
informative. It will help us a lot as we go about turning this 
into real-life legislation that we hope to get done within 
several months.
    We thank you all for coming, and this hearing is closed.
    [Whereupon, at 2:46 p.m., the subcommittee was adjourned.]
    [Submissions for the record follow.]

                       SUBMISSIONS FOR THE RECORD

                                                     August 1, 2001

The Hon. Herb Kohl, Chairman
Subcommittee on Antitrust, Business
 Rights, and Competition
Committee on the Judiciary
U.S. Senate
Washington, DC 20510

    Dear Chairman Kohl:

    Thank you for your recent introduction of S. 1233, the Product 
Package Protection Act of 2001, that would prohibit unauthorized 
writings in consumer products. We also greatly appreciate the expressed 
support of Senators Hatch, Leahy, DeWine and Durbin through their co-
sponsorship of this important measure.
    In recent years consumers have complained of neo-nazi and hate 
literature, pornographic pictures, and other offensive and unauthorized 
materials being attached to, or included in, various consumer products. 
Typically these offensive materials are tightly folded and slipped into 
consumer products that have box packaging with an inner wrapper. When 
the consumer opens the box, these offensive messages are the first 
thing he or she sees. What is most troubling is that so often these 
messages are found in or on consumer products used by children, such as 
cereal boxes.
    Unfortunately, no Federal law exists to stop these alarming 
practices. Because the papers and materials do not physically touch the 
food product, it is not a violation of the Federal Anti-Tampering Act. 
S. 1233 would make such activities a Federal crime, and would amend the 
Federal Anti-Tampering Act by making it a felony for any person to 
stamp, print, place, or insert any writing in any consumer product or 
the box, package, or other container for the product, prior to its sale 
to any consumer. Because S. 1233 does not prohibit persons from placing 
materials on product packaging, we also ask that the bill prohibit 
tampering both ``in and on'' consumer products. We also understand the 
bill is intended to exempt writings and markings made by a product 
manufacturer, retailer, or distributor of the product in the due course 
of business for promotional or sales purposes. A person convicted under 
the Act would be fined and/or imprisoned for not more than three years.
    We appreciate your continued support for S. 1233, and urge its 
swift consideration.

        American Bakers Association
        Food Distributors International
        General Mills
        Independent Bakers Association
        Kraft Foods
        National Frozen Pizza Institute
        American Frozen Food Institute
        Food Marketing Institute
        Grocery Manufacturers of American
        Kellogg's
        National Food Processors Association

                                

  Statement of Gilbert Lee Sandler, American Free Trade Association, 
                             Miami, Florida

    The Product Packaging Protection Act of 2001 (S. 1233) has been 
drafted to address legitimate concerns of food manufacturers that have 
arisen due to the unauthorized insertion of inflammatory written 
materials in branded products prior to delivery to the ultimate 
consumers. AFTA endorses the intent of this legislation and is 
supportive of the House version of this bill (H.R. 2621), introduced on 
July 25, 2001. However, the differences between H.R. 2621 and S. 1233 
concern the members of AFTA, who believe that the laudatory intentions 
of the legislation are compromised by the Senate version of the bill.
    The Senate version would appear to prohibit many legitimate 
activities that currently play a critical role in fostering growth and 
competition in the American marketplace and benefit U.S. consumers. In 
addition, contrary to its stated intent, the current version of the 
Senate bill appears to actually allow certain entities to place any 
type of writings in or on goods or packaging without limitation or 
prohibition. Accordingly, because AFTA supports legislation that would 
punish the unacceptable insertion of offensive materials in products 
offered to U.S. consumers, it recommends that S. 1233 be amended to 
conform to H.R. 2621.
    In that regard, the American Free Trade Association offers the 
following suggested amendments to S. 1233, as introduced. These 
amendments would conform S. 1233 to the House version of the bill, H.R. 
2621, and would, therefore, strengthen the legislation by prohibiting 
unlawful conduct while still protecting commercial activities that are 
common, and desirable, within the U.S. marketplace.
    First, the language currently in H.R. 2621 that prohibits anyone 
from inserting offensive writings in consumer goods but which, 
nevertheless, protects common, necessary and lawful business activities 
should be added to S. 1233.
    Second, the term ``Authorized distributors'' used in the bill 
should be amended to ``Distributors'' so that legitimate sales and 
promotional activities are protected without discrimination.
    The following discussion highlights AFTA's concerns regarding S. 
1233:
Activities of all Product Distributors Should Remain Legal
    Both H.R. 2621 and S. 1233 intend to prohibit the placement of 
offensive writings in or on products or product packaging. However, 
because what may be offensive to one person may not be to another, and 
to address constitutional free speech concerns, the definition of 
prohibited ``writings'' in both bills is necessarily broad and would 
include seemingly innocuous activities such as placing coupons in 
boxes, adding warranties or marking ``two for one'' on a promotional 
box. ``Writings,'' under the current definition, could even include 
stickers placed on boxes to indicate correct weight measurements under 
FDA regulations. While AFTA understands and appreciates the need for 
such a broad definition of prohibitive writings, it believes that it is 
critical that the legislation protect legitimate forms of business 
practices that may, inadvertently, fall within the prohibitions set 
forth in this legislation. Accordingly, S. 1233 should be amended so 
that these activities of all product distributors remain legal.
S 1233 should include language prohibiting the insertion of offensive 
        materials by anyone
    H.R. 2621 prohibits writings placed in or on products or packages 
without the consent of the manufacturer, retailer or distributor in the 
normal course of business for promotional or sales purposes. However, 
S. 1233 prohibits the placement of writings without the consent of the 
manufacturer, retailer or ``authorized'' distributor and relieves these 
parties from liability under the Act in all circumstances. We believe 
that the language in S. 1233 should be identical to that language 
contained in the House version of the bill in order to prohibit the 
undesirable behavior completely, regardless of who commits the crime. 
In its present form, for example, S. 1233 provides no recourse against 
the retailer who may believe that it has the right to insert neo-Nazi 
literature in product boxes on its shelves. So long as the retailer, 
manufacturer or authorized distributor consents to the placement of a 
prohibited writing, S. 1233 appears to permit such an action. This 
would seem to be contrary to the intention of the legislation.
S 1233 should include language protecting litimate business practices 
        of all product distributors
    The exemption made for acceptable business practices set forth in 
H.R. 2621 makes no distinction between an ``authorized'' distributor 
and all other product distributors because it exempts legitimate 
business activities that are often required by law or commercial 
reality. The fact is that all distributors may need to insert some 
writings in or on products prior to sale to the consumer. For example, 
distributors may place coupons in packages or disclaimers on 
containers; they may add special warranties or promotional tie-ins of 
one product purchased with another. Distributors may elect to stamp 
products with ``Reduced Cost'' labels or ``Two for One'' tags and may 
include customized warranties to customers. Distributors may, in fact, 
combine a shaver with shaving cream and repackage the combination 
promotional product to indicate proper content, weight and trademark 
information as required under existing law. Legitimate repackaging and 
promotional activities are conducted by both distributors 
``authorized'' by the manufacturers to initially sell the products and 
those distributors that subsequently sell the goods through the 
discount marketplace. Regardless of who performs this legitimate 
business activity, the prohibitions set forth in this legislation 
should not apply. Rather, the legislation should be amended to clearly 
prohibit certain activities, without concern to who performs them. 
Accordingly, S. 1233 should be amended so that legitimate business 
practices of all product distributors, whether or not ``authorized'' as 
such initially by the product's manufacturer, are protected.
     Background Information on the American Free Trade Association
    The American Free Trade Association (AFTA) is a not-for-profit 
trade association of independent American importers, distributors, 
retailers and wholesalers, dedicated to preservation of the parallel 
market to assure competitive pricing and distribution of genuine and 
legitimate brand-name goods for American consumers. The parallel market 
embraces a broad range of products but AFTA's members are primarily 
involved in sale and distribution of fragrances, colognes, health and 
beauty aids (e.g. shampoo, soap, etc.). AFTA has been an active 
advocate of parallel market interests for over fifteen years. It has 
appeared as amicus curiae in the two leading Supreme court cases 
affirming the legality of parallel market trade under the federal 
trademark, customs and copyright acts (the 1985 Kmart case and the 1998 
Quality King case) and in numerous lower court decisions.
    AFTA's members distribute brand name products, pursuant to U.S. 
laws and regulations, in connection with which the manufacturer has 
already made its initial sale and profit. In this way, American 
consumers are provided with greater access to luxury goods and the 
benefits of a truly competitive marketplace. However, as 
``unauthorized'' distributors, AFTA's members would not be exempted 
from the prohibitions contained within S. 1233 as drafted.

                                

                                     Anti-Defamation League
                                         New York, NY 10017
                                                      July 31, 2001

The Hon. Herber H. Kohl
U.S. Senate
Washington, D.C. 20510

    Dear Senator Kohl:

    We write in support of S. 1233, the Product Packaging Protection 
Act of 2001, legislation you have introduced along with Senators Hatch, 
Leahy, DeWine and Durbin.
    The Anti-Defamation League is a civil rights and human relations 
agency with over 80 years of experience confronting extremist and hate 
group activity. We have supported similar consumer protection 
legislation in California, because we believe there should be 
consequences for this kind of product tampering by extremists and hate-
mongers.
    We strongly believe the proposed legislation raises no First 
Amendment issues. The First Amendment does not give individuals the 
right to hijack people's property for use as a vehicle for their own 
opinions. The Constitution does not require citizens to be subjected to 
read racist and anti-Semitic materials in their own homes against their 
will. As an organization, ADL is firmly committed to the idea that the 
best way to fight hate speech is with more speech. That does not mean, 
however, that we believe that this kind of vandalism should be 
countenanced under the banner of free speech.
    We urge the Committee to act favorably on this legislation.
            Sincerely,

                                             Glen A. Tobias
                                                  National Chairman

                                          Abraham H. Foxman
                                                  National Director

                                

 Statement of Hon. Richard J. Durbin, A U.S. Senator from the State of 
                                Illinois

    Thank you, Mr. Chairman. Before I begin, I want to acknowledge and 
thank Paul Petruccelli, who is testifying on behalf of Kraft Foods 
North America, Inc., which is based in Northfield, Illinois. Kraft has 
been a leader in the effort to address this important issue.
    I am pleased to join Senator Kohl as an original cosponsor of the 
Product Package Protection Act of 2001. In the past several years, 
consumers have been discovering offensive and highly provocative 
material in products they purchase at retail stores and supermarkets. 
When consumers and food manufacturers report these incidents to 
authorities, however, the government was unable to do anything about 
it. That is because under our current laws, neither the Federal Bureau 
of Investigation nor the Food and Drug Administration has the authority 
to prosecute these incidents under the Federal Anti-Tampering Act.
    Hatmongers who choose to tamper with consumer products should not 
be permitted to engage in this activity with impunity. One of the 
leaflets that was inserted into a consumer product read ``IF IT AIN'T 
WHITE. . .WASTE IT.'' The graphic leaflet depicted a person of color 
being shot. Imagine for a moment a small child opening up a box of 
cereal at the breakfast table and finding this leaflet. This is not a 
scenario any parent wishes to encounter--but it is one that many 
parents undoubtedly have faced over the past few years.
    With the new legislation we introduced recently, hate groups will 
find that when they tamper with consumer packaging, they will be 
tampering with the law. We are providing law enforcement officials the 
tools they need to go after individuals who choose to hide behind 
consumer packaging to convey their hateful messages. The bill includes 
a common sense exception for writings and markings made by product 
manufacturers, retailers, and distributors of consumer products in the 
course of business and for promotional and sales purpose.
    This legislation has already been marked-up and reported favorably 
by a House Judiciary Subcommittee. I hope that the Senate will move 
swiftly to enact this important legislation.

                                

                                        General Mills, Inc.
                                     Minneapolis, Minnesota
                                                      July 30, 2001

Senator Herb Kohl, Chairman
Antitrust, Business Rights, and Competition Subcommittee
Senate Committee on the Judiciary
224 Dirksen Senate Office Building
Washington, D.C. 20510

    Dear Senator Kohl,

    On behalf of General Mills, I am writing to express strong support 
for S.1233, legislation to amend the Federal Anti-tampering Act. This 
bill makes it a felony for any person to stamp, print, place, or insert 
any writing in or on any consumer products or the box, package or other 
container for the product, prior to its sale to any consumer.
    General Mills receives 20 to 25 consumers complaints a year on 
matters relating to unauthorized, and often highly offensive, material 
inserted into or attached to our product boxes.
    After investigation, we have determined that this material has been 
placed in or on our product boxes after they have left our control, 
most often once the product is on the store shelf. The material often 
espouses a variety of racist and other cause-related positions. 
Consumers, like all of us, are understandably angry and upset, 
particularly when it is their children who have opened the package.
    We have approached federal law enforcement authorities, both the 
FBI and the FDA's Office of Criminal Investigation, to request that 
they investigate and prosecute this activity. Unfortunately, neither 
agency believes it has authority to prosecute under 18 U.S.C. 1365 and 
both have declined to investigate these incidents. Although California 
and New Jersey have adopted measures making this activity a crime, 
there remains an enormous gap at the federal level to appropriately 
punish those that commit these acts.
    We appreciate your leadership in addressing this important issue as 
all of us work to protect the rights of consumers and consumer product 
companies from the activity. Please do not hesitate to contact me 
should you have any questions.
            Sincerely,

                                    Austin P. Sullivan, Jr.
                                              Senior Vice President

                                

                                            Kellogg Company
                         Battle Creek, Michigan, 49016-3599
                                                      July 31, 2001

The Hon. Herbert H. Kohl
U.S. Senate
Committee on Antitrust, Business Rights, and Competition
Disksen Senate Office Building 224
Washington, DC 20510

    Dear Chairman Kohl:

    We ask you to support S. 1233, legislation which would criminalize 
printed matter from being inserted into our products and packaging.
    Kellogg Company is a food manufacturer of products including 
breakfast cereals, Kellogg's' Eggo' frozen 
waffles, Pop-Tarts' and Nutri-Grain' Bars, as 
well as Keebler cookies and crackers. Over the last few years, we have 
had some incidents whereby our packages were violated. Although this 
type of tampering appears not to be intended to affect the integrity of 
the food, it is still alarming to our consumers who rely on our 
packaging to protect the products they feed their families.
    In 1994, Congress passed the Federal Anti-Tampering 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 Consumer Product Protection Act of 2001 aims to fill-in 
these gaps in the law.
    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 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.
    We urge you to support S. 1233.
            Sincerely,

                                         George A. Franklin

                                   - 
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