From SCDigest's On-Target E-Magazine
- Oct. 21, 2015 -
Supply Chain News: Walmart Forced to Really Scale Back Made in USA Claims
Icons Totally Gone from Web Site, Revamped on Physical Products, after FTC Investigation
SCDigest Editorial Staff
In what would appear to be something of a setback in its major program to support products made in the USA, Walmart has significantly scaled back some of its promotion of the program to consumers, after a Federal Trade Commission (FTC) investigation based on a complaint from a watch dog group.
As we've reported before, using a Made in USA label can be tricky business. The US Federal Trade Commission rules say that a "Made in USA" label can go on any goods that are "all or virtually all" made domestically. But the FTC doesn't define what "virtually all" means.
SCDigest Says: |
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For those companies considering a Made in USA type promotional program, even If it's just an image on product packaging, SCDigest just recommends you really gets your ducks in a row. |
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What Do You Say?
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A number of companies have made their own interpretations, often using a rule of thumb that if 70% or more of the value of a product is made domestically, it can be dubbed as made in America.
But the state of California sees things differently. Every part of a product must be made in American to qualify for that status, according to the rules there. To state a product is made in the US is considered false advertising there even if 99% of the components are US made.
That would mean, for example, that no US-assembled automobile or Boeing aircraft could be called American made, since virtually all of them contain some components produced outside the US.
And in that state, there are also trial lawyers trolling for even the most minor offenses, seeking big damages on the behalf of consumers somehow deemed to have been injured from the "false" claims. For example, sports equipment maker Lifetime Products came under such legal assault for selling basketball hoops in California that were entirely made in the US, but used a few bolts and nylon net for the hoop that came from China. (See In Era of Reshoring, Just What Qualifies to be Labeled "Made in America?")
It appears Walmart recently came under similar scrutiny. Two years ago, Walmart announced its intention to source an additional $250 billion worth of US-made goods over the following decade, promising the move would create thousands of jobs. As it followed through on that program, officially called Walmart's Investing in American Jobs Program, the company began to identify products made in the US with a special logo on its web site.
Then in June, the watchdog group Truth in Advertising found 100 instances of mislabeled products in June and raised them with the company. At the time, a Walmart spokesman told CBS news that "a small percentage of items" were mislabeled because of coding errors.
Unsatisfied with that response, Truth in Advertising took its complaints to the FTC. This week, the FTC sent Walmart a letter, which you can view here, said that it was dropping its investigation, but only after the retail giant had made a number of adjustments in its promotion of the program.
(Manufacturing Article Continued Below)
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Those steps on its web site included: