Glue producer Chemence, Inc has found itself in a second debacle with the Federal Trade Commission (FTC) after making false claims that its products are Made in USA. In 2016, the glue manufacturer was charged with unqualified, deceptive country-of-origin claims. This time, it cost them the highest settlement ever paid in a “Made in USA” labelling case: $1.2 million.
The glue maker and its company president James Cooke, have settled Federal Trade Commission charges that they supplied pre-labeled and pre-packaged glues with deceptive “Made in USA” claims, some with an image of the American flag, to trade customers to use in marketing the strong, fast-acting glues under retailer brand names. These brands include products such as Master Super Glue, JB WELD SuperWeld, Stick Fast Instant CA Adhesive, Pink Gel Nail Glue, SAATI Ultrafix CA – MV, and Kiss Maximum Speed Nail Glue.
In their 2016 case, they were found guilty of making deceptive Made in USA advertising claims for products sold under its own brand names, including Kwik Fix, Hammer Tite, and Krylex. As a result, the company was required to make a “clear and conspicuous qualification [which] appears immediately adjacent to the representation that accurately conveys the extent to which the product contains foreign parts, ingredients, and/or processing.” The order also required the company to submit a compliance report to the FTC one year after the order. The FTC’s 2020 complaint states that Chemence failed to comply with the agreement made four years prior.
The proposed settlement, along with a $1.2 million fine, says that Chemence must notify all wholesale customers of the misleading branding. On top of that, they are condemned from making Made in USA claims unless “The final assembly or processing of the product occurs in the United States, all significant processing that goes into the product occurs in the United States, and all or virtually all ingredients or components of the product are made and sourced in the United States,” or if the product is specifically labelled as partially Made in USA or assembled in USA.
“Many people care deeply about buying American-made products,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “The FTC is dedicated to ensuring that marketers making deceptive Made in USA claims face the legal consequences of their actions.”
Other officials also expressed optimism for the future of American Made following the agreement. Commissioner Rohit Chopra issued a statement on the subject shortly after.
“Today’s action against Chemence and its top executive marks another turning point for the FTC’s enforcement strategy. Chemence is an established player in the adhesives and sealants business. The order announced today imposes real consequences – a major difference from the Commission’s past Made in USA settlements,” said Chopra.
“I congratulate all of the agency’s staff who fought for this outcome, as well as the many stakeholders who have worked with us to turn the page on the policy inherited from our predecessor Commissioners. These efforts to reboot the Made in USA enforcement program represent real progress.”