New Balance has long emblazoned its products with proclamations that they are “Made in the USA.” But consumer watchdog group Truth in Advertising (TINA) is hitting back at the Boston-based footwear brand with an official complaint to the Federal Trade Commission (FTC), alleging that those claims are false and damaging.
On Monday, the nonprofit submitted an open letter to the FTC stating that New Balance has violated the Made in the USA Labeling Rule (16 CFR Part 323) along with Section 5 of the FTC Act (15 U.S.C. § 45) for more than a decade by claiming that its sneakers are made stateside.
The Made in the USA Labeling Rule, signed into law in August, prohibits brands from labeling any product with claims that it is produced in the U.S. unless the final assembly or processing of the product takes place on American soil. All “significant” processing that goes into a product must occur in the U.S. in order for it to be labeled as such, along with virtually all of its ingredients or components. The labeling in question can refer to tags, digital seals, marks or stamps used on shoes or their packaging. TINA’s complaint centers around New Balance’s labeling on the uppers and tongues of its athletic footwear, along with the boxes and marketing materials used to package these goods, which are often conspicuously labeled with “Made in the USA” stitching or marks.
Section 5 of the FTC Act underscores the rule, requiring that a product be all or virtually all made within the country in order to earn the distinction. “In other words, where a product is labeled or otherwise advertised with an unqualified ‘Made in USA’ claim, it should contain only a de minimis, or negligible, amount of foreign content,” the FTC’s enforcement policy states.
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According to TINA, “a substantial portion” of the inputs that make up New Balance sneakers, including the soles, are imported, and the false labeling has misled shoppers while harming other U.S. brands. “Such longstanding and pervasive deception not only harms consumers, but honest American companies trying to compete with one of the world’s largest manufacturers of athletic shoes,” it said.
What’s more, TINA argued that New Balance has been aware of the Section 5 standard, and the impacts of its labeling practices, for decades. “In fact, the ‘all or virtually all’ language was first used in joint cases filed by the FTC against New Balance and another sneaker manufacturer, Hyde Athletic Industries 25 years ago,” it wrote. The FTC ultimately dropped the claim against New Balance, and since then, “the company has knowingly flouted the FTC’s Made in USA standard, and deceptively capitalized on consumers’ preferences to buy American-made products.”
While the complaint specifically references the brand’s use of Made in the USA labeling on its physical products and packaging, TINA said that the company has also promoted its claims—further misleading consumers—through the information provided on its website and social media pages.
The only indication that the shoes are not made in the U.S. is “an ambiguous qualifying statement which generally appears in inconspicuous places well removed from the Made in USA marketing messages and labels,” TINA said. The fine-print qualifiers are often found on the side or bottom of certain shoe boxes—sometimes in a foreign language, like French—as well as on the underside of tags attached to certain shoes. Some of the product pages on New Balance’s e-commerce site contain the same language.
“We are proud to be the only major company to make or assemble more than 4 million pairs of athletic footwear per year in the USA, which represents a limited portion of our U.S. sales,” New Balance states on a general information page on its e-commerce site. “Where the domestic value is at least 70 percent, we label our shoes Made in the USA.”
According to TINA, the disclosures are rendered legally ineffective by the language’s vague nature. The definition of “domestic value” is never clearly defined, nor are specific parts and pieces of the shoes called out as being made in other countries. What’s more, the statements are found in places on the packaging and website where “the majority of consumers will never see them.”
While the company’s website contains little language about the origins of its footwear inputs, a New Balance representative told Sourcing Journal in 2013 that the company manufactured seven million pairs of shoes annually at its U.S. facilities in Massachusetts and Maine, representing 25 percent of its total production volume. At the time, the spokesperson said that the remainder of the brand’s shoes were produced China, Vietnam, Indonesia and the U.K.
New Balance declined to comment beyond the statement on its website.