The Federal Trade Commission has backed away from a full-scale investigation of possible illegal price fixing of Cuisinart food processors, one of the year's hottest Christmas items.
The investigation was shelved, FTC sources said, because the Cuisinart "is a rich people's toy" and its selling price should not be top priority concern for federal regulators.
In affluent areas like Washington, the Cuisinart is sold out in virtually all stores. Retailers are giving customers what Cuisinart calls "the almost empty box," containing ne blade and a promise the machine will be delivered in January.
Despite nearly universal discounting of small appliance - other food processors sell for up to 40 per cent off their list price - the two Cuisinart models are almost never discounted. The original model, with a metal base and a handle on the bowl, retails for $255; the economy version with a plastic base and no handle is $160.
Officials of Cusinart, a Connecticut company that imports the machines from France, confirmed yesterday that they have reached a settlement with one retailer that sued the company for allegedly trying to fix prices.
The settlement's terms will be announced Friday by the retailer, Zaber's, a well-known New York specially food store.
Murray Klein, a Zabor's co-owner, said Barbar's advertised discount prices on Cuisinarts some time ago and sued the company when it was unable to get shipments of the machine. He refused to disclose the outcome of the lawsuit but promised "it will be a very big announcement."
The Federal Trade Commission's press spokesman declined to comment on any investigation of Cuisinart pricing. he denied the agency has made a policy decision to ignore price fixing complaints involving luxury items.
But other FTC sources said a decision was made not to pursue a full-scale investigation based on a "most bank for the buck" argument.
"The price of $200 food processors is not the greatest problem facing the American consumer," said one FTC official, who admitted having a Cuisinart at home.
Rather than pursue complaints about Cuisinart prices on a national scale, as some staff members advocated, the FTC decided to leave the matter in the hands of its Boston resional office. Boston FTC officials declined to comment this week.
The French-made Cuisinart, which has been copied by a dozen other manufacturers, is touted as the ultimate kitchen machine. It can purce chestnuts for the Christmas stuffing knead dough for the pumpkin pie, or turn leftover turkey into gourmet canpes.
It is, local retailers say, the year's big-ticket best seller and one of the hottest gadgets ever.
"We have never had anything that has gone like this," said Edith Schubert, owner of The China Closet, a local housewares emporium.
Food processors in general and the Cuisinart in particular have been the most asked for Christmas item, she said. Rivan fachines are selling at sharp discounts, but, she noted, "the Cuisinart price is maintained. It is not cut by anyone."
Despite FTC efforts to police price fixing, "there are ways around it," she added.
Fields and Company, a Bethesda jewelry and giftware firm that discounts many items has been unable to get the Cuisinart since it discounted the machine, said Russell O'Connor, manager of the store.
"They will not sell to us because we discount," he said.
"That's hogwash" replied Al Finesman, director of marketing for Cuisinart. "We don't do anything" to maintain prices, he added, "we're not allowed to."
"The only reason people don't get machines is because nobody's getting them." Finesman insisted.
Finesman said retailers don't cut prices on Cuisinarts because "it's hard enough to make a profit these days. Why should they cut the price when they can't even keep it in stock?"
He confirmed the settlement with Zabor's but said he has not no inquires from the FTC about the company's prices.
Finesman said some stores are using misleading advertising indicating they are discounting the economy model Cuisinart. The budget version originally had a price taxe of $190, but that was cut $20 several months ago.Some retailers, however, are continuing to advertise the $180 machine "on sale" for $150 or $160.
The Cuisinart marketing manner said he knew of no cities in which there is price competition among Cuisinart retailers and knew of no retailers who were cutting the prices.
In most cities, stores began running low on Cuisinarts just after Thanks-giving, he said. The company launched its "almost empty box" advertising campaign the first week of December it hurriedly printed up the special boxes because Robet-Coupe, the French manufacturer could not supply enough machines for Christmas.
Finesman said cooks who find the "almost empty box" under their Christmas tree will get their machines in January. Regular deliveries will be resume in February.
Local stores say the Cuisinart boxes are selling almost as well as the real MeCoy.
"We sold three of them last night after 9 o'clock," said Ellen Masica, who works in a surbuban Maryland gourmet shop called What's Cooking.
Because they fear they will not get additional supplies if they discount the machines, stores are offering other inducements she added.
"We give them a workshop." a free two-hour lesson in how to use the food processor, she said, and other stores throw in cookbooks or blade helders in lieu of lower prices.