Show THE VOICE OF BUSINESS Too Much Choice Not Good For Consumer FTC Says By ARCH N N. N BOOTH executive vice president of the Chamber of Commerce of the he United States Do you get hung up at the cereal count cont er of the supermarket Do you stand tand there in hopeless confusion unable to choose among the competing brands and varieties THE FEDERAL Trade Commission fears that you may have this problem And they have a solution for it too Break up the major cereal producers Snap Crackle Pop Popl Hows How's that again Its it's wrong to give the consumer a choice Evidently The four leading producers make too many brands the FTC suggest the consumer Is confused by the quantity and by advertising that mainly stresses artificial differences OK too many brands So the solution must be fewer cereal producers and therefore fewer brands right No wrong again We need more cereal producers the FTC says And it wants to force the present producers to foot the bill for establishing their new competitors NOW LETS LET'S be fair to the FTC Lets Let's not ask how more producers will solve the problem of too many brands Lets Let's not even speculate about the amount of intelligence the FTC gives the average consumer credit for Why So So- Many Brands Instead lets let's examine this question of too many brands If the cereal producers producers pro pro- are in business to make a profit and the FTC says their profits are too high then they cannot afford to make products no one will buy right So it is isa a reasonable assumption that someone is buying all or nearly all of those brands brandson on the shelves That means that someone wants all or nearly all of those brands So the crime of the cereal producers seems to be in providing what the consumer consumer con con- sumer wants AH BUT suppose the producers by their very size can force consumers to buy new brands Well that should be easy to answer Do all new brands sell No Over half of the brands introduced in the failed And the three most popular cereals were over 30 years ago ago- Evidently the consumer cant can't be forced to buy something he doesn't want Which is the way it should be whether a cereal producer or a government government government govern govern- ment agency is trying to do the forcing But the FTC also feels the success of these four companies in the breakfast cereal business results in unnecessarily high prices How Because the four firms are conspiring to Fix prices No No the FTC doesn't accuse them of that Well then is it because the four producers i cant can't sell enough individually to low lower r costs through volumn high-volumn production No that cant can't be the answer or the FTC wouldn't propose still more producers ers still more producers in the industry grounds the FTC has for this action At Ata a time when the cost of almost everything every very thing has been rising steeply consumer spending for cereals has remained remarkably re stable Out of every 20 spent on food by the average shopper in 1960 22 cents went for cereal Ten years later that figure had risen only one penny penn to 23 cents The Real Problem The real problem here is not what the cereal Industry Is doing to the consumer consumer con con- sumer but rather what the FTC would do to both the cereal industry and to the consumer There are bureaucrats in Washington who believe their judgment to be superior to that of the market market- place What that comes down to is that they believe their judgment is superior to yours yours as a consumer So they want to protect you by insuring that the only choices open to you are arc those meeting meeting meet meet- ing with their approval They are arc really a warmhearted warmhearted bunch Just a little conceited conceited con con- that's all WILL IT stop with the cereal industry Probably not The FTC is known to have at least four other industries under in in- for now Th The FTC has a valuable role to perform perform per per- form in protecting the consumer from false advertising and hazardous or misrepresented misrepresented mis mis- represented products Responsible businessmen businessmen busi busi- support this function because they too suffer from cutting corner-cutting com petition But protecting the consumer from having too much choice is not nota a proper regulatory function IN FACT it is difficult to see what |