Union Sardine Co

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IN THE ltfATrER OF UNION SARDINE COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SUBSEC. (c) OF SEC. 2 OF AN ACT OF CONGRESS .APPROVED OCT. 15, 1914, AS AMENDED BY AN .ACT OF COl'IGRESS APPROVED JUNE 19, 1936 Docket H13. Complaint, Dec. 13, 1940-Decision, Apr, 15, 191,1 Where a corporation engaged in _packing, processing, and canning sardines at its Maine plant, and In interstate sale and distribution thereof, ( 1) in some instances through brokers employed as its selling agents to whom it paid a brokerage fee or commission usually amounting to 5 per<.!ent of the invoice price on sales •. and (2) in other instances directly to purchasers, including some of its brokers buying for their own account- Granted and allowed brokerage fees and commissions, and allowances and discounts in lien thereof, in substantial amounts to certain of its customers, through selling its said product direct to some customers at a .price reflect.ing a reduction from that at which It was currently selling such sardines to other customers In an amount equivalent to brokerage currently being paid by it to its brokers for sales to such other customers: Held, That in granting and allowing brokerage fees and commissions, or allowances and discOllDts in lieu thereof, to purchasers in connection with their respective purchases of sardines from i~, as above set forth, said corporation violated subsection (c) of section 2 of the Clayton Act, as amended by the Robinson-Patman .Act.

Mr. Edwards. Ragsdale for the Commission.

Complaint The Federal Trade Commission having reason to believe that the party respondent named in the caption hereof, arid hereinafter more particularly described, since June 19, 1936, has violated and is now violating the provisions of subsection (c) of section 2 of the Clayton Act as amended by the Robinson-Patman Act approved June 19, 1936 (U. S. C. title 15, sec. 13), issues its complaint stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondent, Union Sardine Co., is a corporation organized and existing under and by virtue of the laws of the State of Maine, and has its principal office and place of business located at Lubec, Maine.

PAR. 2. The respondent is engaged in the business of selling sardines which it has packed, processed, and canned at its canning plant which it operates in the city of Lubec, State of Maine. In some instances sales of such sardines are affected tht·ough brok- {'rs who are employed by respondent as its selling agents. In other UNION SARDINE CO. 1195 1194 Complaint instances such sardines are sold by respondent directly to purchasers, among which class o:f purchasers are some of respondent's brokers who on occasions purchase sardines :for their own account for resale. 'Vhen sales of sardines are effected through brokers, respondent pays to such brokers a brokerage fee or commission which usually amounts to 5 percent of the price at which respondent invoices such sardines to the purchasers thereof.

PAR. 3. In·the course and conduct of its said business since June 19, 1936, respondent has sold and distributed sardines in commerce between and among the various States of the United States and the District of Columbia, in each of the manners set forth in para· graph 2 hereof, and as a result o:f such sales, has caused sardines to be shipped and transported from its said canning plants in the State of l\Iaine across State lines to the respective purchasers thereof, and there has been at all times mentioned perein a continuous current of trade and commerce in sardines across State lines between respondent's canning plant and the purchasers of such sardines. PAR. 4. Since June 19, 1936, in connection with sales of sardines in commerce as above alleged and described, respondent has granted and allowed brokerage fees and commissions and allowances and discounts in lieu thereof in substantial amounts to certain of its customers.

Among the methods employed by respondent in granting and allowing brokerage fees and commissions or allowances and discounts in lieu thereof to such customers are the following: 1. To some of its customers, the sales to whom are effected directly by respondent, respondent grants an allowance or discount in lieu of brokerage by selling sardines to such customers at a price reflecting a reduction from the prices at which respondent is currently selling · such sardines to other customers of an amount representing brokerage eurrently being paid by respondent to its brokers for effecting sales of sardines to other purchasers thereof.

2. To other of its customers, the sales to 'whom are effected through brokers to whom respondent does not pay the full brokerage customarily and usually paid by respondent to its brokers £or effecting sales o£ sardines, the respondent grants an allowance or discount in lieu of brokerage, by selling sardines to such customers at a price reflecting a reduction from the prices at which respondent is currently selling sardines to other customers of brokerage in an amount representing and approximately equal to the difference between the full brokerage customarily paid by respondent to its brokers for effecting Findings 32 F. T. C. such sales and the amount of brokerage actually paid by respondent to its brokers for effecting said sales.

PAR. 5. The aforesaid acts of the respondent constitute a violation of the provisions of subsection (c) of section 2 of the above mentioned Clayton Act, as amended by the Robinson-Patman Act, approved June 19, 1936 (U.S. C. title 15, sec. 13).

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the act of Congress, entitled "An Act to supplement existing laws against unlawful restraints and monopo- Jies and for other purposes," approved October 15, 1914 (the Clayton Act), as amended by the Robinson-Patman Act, approved June 19, 1936 (U.S. C. title 15, sec. 13), the Federal Trade Commission on December 13, 1940, issued and served its complaint in this proceeding upon the party respondent named in the caption hereof, charging said respondent with violating the provisions of subsection (c) o£ section 2 of said act, as amended.

After the issuance of said complaint, the respondent filed its answer admitting certain material allegations of fact set forth in said complaint and denying others, and waiving all intervening procedure as to said facts, and expressly waiving the filing of briefs and oral argument.

Thereafter, this proceeding regularly came on for final hearing before the Commission on said complaint and answer, and the Commission, having duly considered the same and being now fully advised in the premises, makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE F.\CTS PARAGRAPH 1. Respondent, Union Sardine Co., is a corporation organized and existing under and by virtue of the laws of the State of 1\Iaine, and has its principal office and place of business located at Lubec, 1\Iaine.

PAR. 2. The respondent is engaged in the business of selling sardines which it has packed, processed, and canned at its cannint;r plant which it operates in the city of Lubec, State of 1\Iaine. In some instances sales of such sardines are effected through brokers who are employed by respondent as its selling a~nts. In other instances such sardines are sold by respondent directly to purcha~ers, among ~which class of purchasers are some of respondent's brokers who on occasions purchase sardines for their own account for resale. UNION SARDINE CO. 1197 1194 Order 'Vhen sales of sardines are effected through brokers, respondent pays to such brokers a brokerage fee or commission whkh usually amounts to 5 percent of the price at which respondent invoices such sardines to the purchasers thereof.

PAR. 3. In the course and conduct of its said business since June 19, 1936, respondent has sold and distributed sardines in commerce between and among the ·various States- of the United States "and the District of Columbia, in each of the manners set forth in paragraph 2 hereof, and as a result of such sales, has caused sardines to be shipped and transported from its said canning plant in the State of Maine across State lines to the respective purchasers thereof, and there has been at all times mentioned herein a continuous current of trade and commerce in sardines across State lines between respondent's canning plant and the purchasers of such sardines. PAR. 4. In the course and conduct of its business as afon•said the respondent, Union Sardine Co., a corporation, since June 19, 1936, has granted allowances and discounts in lieu of brokerage fees and commission in substantial amounts to certain of its customers by selli:ng sardines to some customers at a price reflecting a reduction from the price at which respondent is currently selling sardines of Jike grade and quality to other customers in an amount equivalent to brokerage currently being paid by respondent to its brokers for effecting sales of sardines to such other customers. CONCLUSION In granting and allowing brokerage fees and commission, or allowances and discounts in lieu thereof, to purchasers in connection with their respective purchases of sardines from respondent, as set forth in paragraph 4 hereof, the respondent, Union Sardine Co., a corporation, has violated and is violating subsection (c) of section 2 of the Clayton Act, as amended by the Robinson-Patman Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission anJ the answer duly fileJ by respondent Union Sardine Co., a corporation, which answer admits all of the material allrgations of the complaint to be true and waives the taking of further evidence and all other intervening procedure as to said facts and expressly waives the filing of briefs and oral argument, and the Commission having made its findings as 822695m-41-VOL. 32-76 1198 FEDERAL 'trade COMMISSION DECISIOr;:s:. Order 32F.T. C.

to the facts and conclusion herein that said respondent, Union Sardine Co., a corporation, has violated the provisions of "An Act to supplement existing laws against unlawful restraints and monopolies and for other purposes," approved October 15, 1914, as amended by the Robinson-Patman Act, approved June 19, 1936 (U. S. C. title 15, sec. 13}.

It is ordered, That the respondent, Union Sardine Co., a corporation, its officers, representatives, agents, and employees, in connection with the sale and distribution of sl\rdines in interstate commerce and in the District of Columbia, do forthwith cease and desist from: 1. Selling sardines to customers, the sales to whom are effected directly by respondent, at a price reflecting a reduction from the prices at which respondent is currently selling such sardines to other customers in an amount e.quivalent to brokerage currently being paid by respondent to its brokers for effecting sales of sardines to other purchasers there.of. · 2. From continuing or resuming the practices forbidden in paragraph 1 hereof, or by any other means paying oi' granting, directly or indirectly, to buyers on their own purchases of sardines any commission, brokerage, or other compensation, or any allowance or discount in lieu thereof.

It is fwther o·rder·ed, That the said respondent, Union Sardine Co., a corporation, within 60 days after service upon it of this order, shall file with the commission a report in writing setting forth in detail the manner and form in which it is complying, and has complied, with the order to cease and desist hereinabove set forth. FRANK L. SINGER FUR CO. 1199 Syllabn~>