The New Balance athletic shoe company is one of the leading players in the athletic shoes and also sneaker market. Just like all their competitors, most of their footwear is manufactured in various countries in Asia for price motives. However, New Balance are distinctive in the market in that they do manage some manufacturing centers in the United States, thus some of their footwear do carry the ‘made in the USA’ label. That is however, contentious because lots of the pieces used in the footwear which are produced in the USA have got components, for example the sole units, which are manufactured in Asia. It has brought up questions as to if New Balance are now being valid to make the assertion that the shoes are ‘made in the US’.
The Federal Trade Commission in the USA (FTC) rules state that if marketers and manufacturers would like to promote their products for being ‘Made in USA’ they need to meet the Federal Trade Commission standard of “all or virtually all” getting made in the United States. In order to reach this standard, the FTC considers the place that the production takes place and just how much of the items overall manufacturing expenses might be allotted to the US components and processing, and how far removed any foreign material is from the completed item. New Balance claim on their web site as well as on their footwear labeling that they do meet up with that criteria when they label the shoes as being manufactured in the United States. New Balance translate that guideline to mean that greater than 70% of the cost of producing the footwear in based in the United States, so that is adequate.
These statements by the company have not been enough to fight off legal problems to their assertions and that they might be inaccurate. Back in the 90’s, the Federal Trade Commission did try and bring an enforcement action in opposition to New Balance covering the claims that New Balance were claiming which they ultimately let go its action following a legal test from the Company. Recently, in 2019 a class action lawsuit was negotiated and paid out by the Company for $750,000 over claims that the Company made that the footwear is wrongly marketed as “Made in the USA”. In July 2021 the Federal Trade Commission released new rules for the use of the ‘Made in USA’ assertions which appears to be more stringent than previously. This prompted the organization, Truth in Advertising Inc to prepare a claim against New Balance with the FTC claiming that for far too long the company has been openly violating the ‘ Made in USA’ origin guidelines. This was followed by a different class-action litigation that was filed on December 20, 2021 against New Balance with regards to their “Made in the US’ assertions. The litigation claims how the New Balance items that now have this tagline may not be totally made in the US that is misleading consumers into believing they are buying a USA product. They are trying to get $5 million in damages.
New Balance coming close to the boundaries with their claims, but they allege that they really don’t breach the laws. With regard to marketing purposes it does enable the business to influence consumers that they do help manufacturing in the USA.
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