Federal Yeast Corp

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IN THE MATTER OF FEDERAL YEAST CORPORATION COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATI0f OF SUBSEC. (a) OF SEC. 2 Oil' AN ACT OF CONGRESS APPROVED OCT. 15, 191 ' .AS AMENDED BY .AN .ACT {)F CONGRESS APPROVED JUNE 19, 1936 Doclcet 3926. Complaint, Oct. 13, 1939-Decis;.on, Sept. 22, 1941 Where a corpomtion engaged in the manufactut·e and interstate sale and distt·ibution of bakers' yeast, in substantial competition will\ others similarly epgaged- (a) Disct·iminated in price by selling yeast of like gmde and quality and in like quantities to customer>rs competitively engaged with one another in sale and distribution of hre>ad and allied products, at differentials alllounting to 7 percent and upwards, thereby affording to the beneficiaries sub· stantial savings in price which con~tituted material and vital factors in competition ;

(b) Discriminated. in price by deli1·ering large quantitie!'; of Its yeast without charge to certain purchasers In audition to its yeast actually sold to tbetn, thereby substantially reducing average cost of its yeast to said purchasers, while concurrently selling it to others without so delivering yeast for wbicb no charge was made, so that while~ both classes might be charged the sunle 5 price for yeast sold and billed, the actual cost to the former was Jess bY 1wrcent or more than that to the nonfavored customet·s, thereby affordiilg substantial savings to the beneficiaries which constituted material and vital factors in competition; and (c) Discriminated in price by granting to cet·tain of its pm·chasers cash dis· counts of 1 to 2 percent not granted to others who paid in the snl11e mmmer and within the same time;

Effect of which discriminations bad been antl might be subfltantially to lessen competition In the line of commet·ce concerned, and to Injure, destroy. or prevent competition in the sale and distribution of bread and allied prod· ucts between Its purchasers who received the benefits of such discrimiua· tions and those> who did uot:

Ileld, That said discriminations In price, as hereinabove set out, violated sub· section (a) of section 2 of the Clayton Act, as amended by the Hobinson- Patman Act.

Mr. P. 0. [(olinski for the Commission.

jJfr. SirMn E. Sobeloff, o£ Baltimore, M:d., £or respondent. COMPLAINT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof and hereinafter Dl~re particularly designated and described, since June 19, 1936, has Vl0 " lated and is now violating the provisions of section 2 of the Clayton Act, as amended by the Robinson-Patman Act approved June 19, FEDERAL YEAST CORP. 1373 1372 Complaint ~936 (U. S. C. title 15, sec. 13,) hereby issues its complaint, stating Its charges with respect thereto as follows: PARAGRAPH 1. Respondent, Federal Yeast Corporation, is a corporation organized and existing under and by virtue of the laws of the State of Maryland, having its principal office and plant located at Colgate-Highlandtown P. 0., Baltimore, Md. PAR. 2. Respondent since June 19, 1936, has been and now is engaged in the manufacture, sale, and distribution of bakers' yeast. In the course and conduct of such sale and distribution it causes said Yeast to be shipped and tr~nsported in commerce from its plant in the State of Maryland to purchasers thereof in and among the l"arious States of the United States and there has been at all times herein mentioned a current of trade and commerce in respondent's Jeast between the State wherein respondent's plant is located and l"arious other States of the United States . . PAn. 3. Said respondent in the course and conduct of its business 81~ce June 19, 1936, has been and is now in substantial competition :Vith other corporations, individuals, partnerships, and firms engaged In manufacturing, selling, and distributing bakers' yeast, in comlnerce.

PAn. 4. In the course and conduct of its business as aforesaid, the r:spondent has been and now is discriminating in price between different purchasers of its said product of like grade and quality, by gil"ing and allowing certain purchasers of bakers' yeast used in the lnanufacture of bread and allied products, different prices ·than given or allowed other of its said purchasers competitively engaged one With the other, in the sale and distribution of bread and allied Products within the various States of the United States. To illns- ' trate, during the year of 1937 respondent sold 5,681 pounds of bakers' Yeast to Benkert's Bakery, 3012 Thirtieth Avenue, Long Island City, N". Y., at 13 cents per pound and during the same period sold Subriett Food Products Co., 90 East Third Street, New York City, N. Y., n competitor, 10,910 pounds o:f bakers' yeast at 11 cents per pound and 27,710 pounds of bakers' yeast at 10 cents per pound, thus affording the last mentioned purchaser a saving of $1,049.50 during said period upon the basis of price charged to first mentioned purchaser.

PAn. 5. Further discrimination in price between different competing Purchasers of its product is brought about as a result of respondent delivering large quantities of bakers' yeast to certain of its purchasers for which no specific charge is made in addition to yeast actually sold and delivered to these same purchasers for which a :specific price is charged, thus reducing the cost of said favor£>d cus- Findings 33F. T. C.

tomers of the yeast actually purchased, while at the same time ot~er purchasers competitively engaged in the sale of bread and all~ed products with the said favored purchasers and paying the same price per pound for said product are not furnished such additional yeast. To illustrate, during the month of December 1936, Kallik, 1018 Inter~ vale .Avenue, New York City, N.Y., purchased 1,171 pounds of bakers yeast at 13 cents per pound and in addition to said pu:r:chased yeast respondent delivered 115 pounds of bakers' yeast for which no charge was made, while during the same period Your Baking, 1141 Burnett Place, New York City, N.Y., a competitor purchased 915 pounds ~f baker's yeast at 13 cents per pound and respondent delivered no additional yeast to said purchaser without charge. PAR. 6. Respondent further discriminates in price between compe.ting purchasers by granting cash discounts of 1 to 2 percent to certain of its purchasers which are not granted to others who pay in the same manner and within the same time as those receiving such discounts. PAR. 7. The.effect of such discriminations in price as set forth in paragraphs 4, 5, and 6 hereof has been or may be substantially to lessen competition in the line of commerce in which respondent and its co~­ petitors are engaged and may be to injure, destroy, or prevent competi· tion in the sale and distribution of bread and allied products between those of respondent's purchasers who receive the'benefits of such dis· criminations and competing purchas~rs who do not receive such benefits.

PAR. 8. The foregoing alleged acts and practices are in violation of subsection (a) of section 2 of the Clayton Act as amended. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an act of Congress entitled "An act to supplement existing laws against unlawful restraints and monopo· lies and for other purposes," approved October 15, 1914, the Clayton Act, as amended by an act of Congress approved June 19, 1936, the Robinson-Patman Act (U. S. C. title 15, sec. 13), the Federal Trade Commission on the 13th day of October 1939, issued and subsequently served its complaint in this proceeding upon· respondent Federal Yeast Corporation, charging the respondent with violation of the provisions of subsection (a) of section 2 of the said act as amended. After the issuance and service of said complaint and the filing of re· spondent's answer, the Commission, by order entered herein, granted respondent's motion for permission to withdraw said answer and to substitute therefor an answer admitting all the material allegations of fact set forth in said complaint, with the exception of the illustra.· FEDERAL YEAST CORP. 1375 1372 Findings tions therein set forth regarding specific price discriminations~ and "Waiving all intervening procedure and further hearing as to said facts, which substitute answer was duly filed in the office of the Comlllission. Thereafter, this proceeding regularly came on for final hearing before the Commission on the said complaint and substitute ~nswer, and a stipulation as to certain facts, and the Commission havlng duly considered the matter and being now fully advised in the Premises, and being of the opinion that section 2 (a) of the Clayton A.ct, as amended by the Robinson-Patman Act, has been violated by the respondent, now makes this its findings as to the facts and its conclusion drawn therefrom. · · FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, Federal Yeast Corporation, is a cor- Poration organized and existing under and by virtue of the laws of the State of Maryland, with its principal office and place of business. at Colgate-Highlandtown P. 0., Baltimore, Md. PAR. 2. Respondent, since June 19, 1936, has been and now is, engaged in the manufacture, sale, and distribution of bakers' yeast. In the course and conduct of such sale and distribution it causes its said J'east to be shipped and transported, in commerce, from its plant in the State of Maryland to the purchasers thereof in and among the· ~arious States of the United States, and there is, and has been at ali times since the above date, a current of trade and commerce in respondent's yeast between the State of Maryland and various other- States of the United States.

PAR. 3. Since June 19, 1936, respondent in the sale and distribution 0~ its bakers' yeast has been, and now is, in substantial competition ~Ith other corporations, individuals, partnerships, and firms engaged Jn the business of manufacturing, selling, and distributing bakers'· J'east in commerce.

PAR, 4. Respondent, since June 19, 1936, has discriminated in price and is now discriminating in price between different competing pur- ~hasers of its products of like grade and quality by giving and allowlng some purchasers of its bakers' yeast used in the manufacture of bread and allied products different prices from those given and allowed other of its said purchasers competitively engaged one with the other in the sale and distribution of bread and allied products. In some instances respondent sold bakers' yeast of like grade and quality)and in like quantities to competing customers at different prices "'herein the differential between such prices amounted to 7 percent and upwards.

1376 FEDERAL TRADE COl\IMISSION DECISIONS Order 33F.T.C· PAR. 5. Respondent has discriminated, and is further discriminating, in price between different purchasers of its products competitively oengaged in the sale of bread and allied products by delivering large quantities of its bakers' yeast, without specific charge therefor, to certain purchasers in addition to its bakers' yeast actually sold and delivered to these purchasers, thereby substantially reducing the average cost of its said yeast to such purchasers. Respondent concu:rently sells its said yeast to other purchasers but does not deliver. ll1 addition to the quantities purchased yeast for which no specific charge is made, with the result that while both classes of purchasers may be charged the same price :for yeast sold and billed, the actual cost to those who receive additional yeast without specific charge therefor is less, by 5 percent or more, than the actual cost to the nonfavored customers.

PAR. 6. Respondent's acts and practices as set forth in paragraphs 4 and 5 constituted discriminations in price between its customer_rs, and the savings to the beneficiaries of such discriminations in price were substantial in nature and constituted material and vital factors of competition.

PAR. 7. Respondent has discriminated, and is now further discriminating, in price between competing purchasers by granting cash discounts of 1 to 2 percent to certain of its purchasers which are not granted to other purchasers who pay in the same manner and within the same time as those receiving such discounts. PAR. 8. The effect of such discriminations in price described in paragraphs 4, 5, and 7 above has been and may be substantially to lessen competition in the line of commerce in which respondent and its competitors are engaged and may be to injure, destroy, or prevent competition in the sale and distribution of bread and allied products between those of respondent's purchasers who receive the benefits of such discriminations and competing purchasers who do not receive such benefits.

CONCLUSION The discriminations in price by respondent as hereinabove set out, violate subsection (a) of section 2 of an act of Congress entitled "An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914, as amended by an act of Congress approved June 19, 1936 (the Robin· son-Patman Act).·· OllDEll TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission, the subntitute answer FEDERAL YEAST CORP. 1377 1372 Order of the respondent, in which answer respondent admits all the mat~rial allegations of said complaint with the exception of the illustration therein set forth regarding specific price discriminations and states that it waives all intervening procedure and further hearing as to said facts, and a stipulation of facts filed herein, and the Commission being of the opinion tliat said respondent has violated the Provisions of section 2 (a) of the Clayton Act, as amended by the Robinson-Patman Act, approved June 19, 1936 (U. S. C. title 15, s~c. 13), and having made its findings as to the facts and its conclu- Sion, which findings as to the facts and its conclusion are hereby made a Part hereof. . It is ordered, That the respondent, Federal Yeast Corporation, its officers, directors, representatives, agents, and employees, jointly or s~verally, directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of bakers' yeast in commerce, as "commerce" is defined in the Clayton Act, do forthwith cease and desist:

From the discriminations in price· as f~und in paragraphs 4, 5, and 7 of the findings of fact or otherwise discriminating in price between different purchasers of bakers' yeast of like grade and quality Where the effect of such discriminations may be substantially to lessen competition or to injure, destroy, or prevent competition with re- ~Pondent or any such purchaser unless the differential in price ~n any such discrimination makes only due allowance for differences ln the cost of manufacture, sale, or delivery resulting from differing Inethods or quantities in which such commodities are to such purchasers sold or delivered .

. It is further ordered, That the respondent, Federal Yeast Corporation, shall within 60 days after serv~ce upon it of this order, file with the Commission a report in writing setting forth in detail the maimer and form in which it has complied with the order to cease and desist ( hereinbefore set forth.

Complaint 33 F. T.C.