The Salmon and Tuna Sales Company et al.

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IN THE MATTER OF THE SALlVOK AND TUNA SALES COMPANY ET AL. CONSEI'T T ORDER, ETC., IN REGARD TO THE ALLEGF.D VIOLATION OF SEC. 2(C) OF 'lI-1E CLAYTON ACT Doc/:et 6.981. Complaint, Dec. 1957-De6sj()n, July.' , 1.f)S8 Consent order rCrJuiril1g brokers of canned salmon and other seafood products in Seattle, IVash., to cease making allowances in lieu of brokerage in violation of Section (c) of the Clayton Act by such practices as (1) scl1ing at net IJric€s lower than those accounted for to their packer. principals; (2) granting deductions from price by way of allowances or rebates, a part or al1 of which were not charged lmck to the packerprincipals; ;:me! on taking l'f duced brokenlgc on sales which involved price concessions.

COMPLAINT The Federal Trade Commission. having reason to believe that the parties respondent named in the caption hereof, and hereinedtcr more particularly design ltec1 and de cribed, have violated and are now yioIating the provisions of subsection (c) of Section 2 of the Clayton Act (U. C. Title 15, Sec. 13), as amended hy the Robinson-Patman Act, hereby issues its complaint, stating its charges \vi th respect thereto as follows: PARAGRAPH 1. Respondent, The Salmon and Tuna Sales Company, is a corporation organized, existing and doing business under and by virtue of the la\vs of the State of Washington. Respondent B. Lou Thrailkill is an individual and is president of said corporation and formulates, direds and controls the acts, practices and policies of the saict corporate respondent. The principal offce and place of business of said corporate and individual respondents is IOGlted at 1018 Second Avenue, Seattle, Wash. PAR. 2. Respondents, and each of them, are now, and for many years prior hereto have been engaged in the business of distributing food products, including canned salmon. Respondents distribute as primary brokers, negotiating sales ror the accounts of a number of pach:ers located in various areas within and beyond the continental United States, including the Puget Sound area and the Territory of Alaska.

PAR. 3. Respondents, and each of them, are a substantial factor in the sale and distribution of canned salmon in the United States, and sell and distribute such food products generally JoJoDEHAL TRADE CmlMISSIO:\ DECISIONS Complaint 55 F.

through secondary or field brokers in various marketing areas to buyers for resale located throughout the United States. Respondents have directly or indirectly caused such food products when sold, to be transporled from the canning plants of the respective packers thereof, or from their \varehouses, to buyers thereof located in various States of the Lnited States other than the State in \which respondents are located. Thus respondents are, and hav( been for many years prior hereto, engaged in a continuous course of trade in commerce, as "commerce" is defined in the Clayton Act, as amended by the Robinson-Patman Act. PAR. 1. Respondents, and each of them, are usl1al1y compensated for their services in arranging for the sale and distribution of such food products by deducting a brokerage commission from the proceeds in their account.s of sale to their packer-principals. Said accounts of sale also itemize various discounts and allovvances grantec1 to the purchaser, sllch as for dents and s\vells cash, or for labeling, a11 of which are shown as deductions from ihe purchase price and are charged back to the packer-principals in the usual course of business. The brokerage commission deducted by respondents is customarily 5( of the net selling price. The field brokers are customarily compensated for their services by receiving from respondents as primary brokers, a brokerage cemmission in the amount of 2 ; of the net selling price. PAR. 5. Respondents, and each of them, in the course and conduct of their business in commerce as primary bl"okers for various packer-principals, have made grants or allo\vances in substantial amount in lieu of brokerage to certain buyers of said canned salmon by afhJl"ding differentials or concessions in price and various rebates and allowances, a part or all of which were not charged back to the various packer-principals but \were, on the contrary, taken from the brokerage earnings of respondents and of their fie1c1 brokers.

Among and including-, but not necessarily limited to, the methods or means employed by respondents in so doing were the following:

(a) Selling to certain buyers at net prices which were less than those accounted for to the packer-principals. (b) Granting to certain buyers deductions from price by way of allowances or rebates, a part or all of which \were not charged bael.; to the packer-principals.

(e) Taldng reduced brokerage on sales which involved price concessions to certain buyers.

THE SALMOX AND TUNA SALES COMPANY ET AI,. Decision PAR. 6. In the course and conduct of their business as aforesaid respondents, and each of them, have made grants or allowances in substantial amount in lieu of brokerage to certain field brokers on sales to such field brokers for their o\vn accounts. PAR. 7. In making payments of commissions, brokerage fees or discounts, or allmvances in lieu thereof, as alleged and described above, the respondents and each of them in the course and conduct of their business in commerce, as 'Icommerce " is defmed in the aforesaid Clayton Act, have paid, granted OJ' al- 100vcd, and are now paying, granting or allowing, something of value as a commission, brokerage or other compensation, or al- ImNance or discount in lieu thereof, in connection ,with the sale of their canned salmon and other food products to buyers who were and are purchasing for t.their o\vn account for resale, or to agents or intermediaries who were and are in fact c.acting for or in behalf of or who were and are subject to the direct or indired control of said buyers.

PAR. 8. The acts and practices of the respondents, and each of t.hem, as above alleged and described are in violat.ion of subsection (c) of Section 2 of the Clayton Act, as amended hy the Robinson-Patman Act (D. C. Title 15, Sec. 13). Mr. Cedi G. Miles and MI. John J. McNa)ly supporting the complaint.

Respondents, pro se.

INITIAL DECISION BY JOSEPH CALLAWAY , HF;ARING EXAMINER The complaint herein was issued on December 12, 1957, charging respondents with the violation of Section 2 (c) of the Clayton Act as amended by t.he Robinson-Patman Ad in connedion with the sale of seafood products.

After being served with the complaint, respondents entered into an agreement dated April 11 , 1958 , cont.aining a consent order to cease and desist disposing of all the issues in this proceeding, \vithout hearing, which agreement has been duly approved by the assistant director an(l the director of the Bureau of Litigation. Said agreement has been submitted to the under signed, heretofore duly designated to act as hearing examiner herein, for his consideration in accordance with S( ction iL25 t.he Rules of Practice of the Commission. Respondents, pursuant to the aforesaid agreement have admitted al1 of the jurisdictional allegations of the complaint and agreed that t.he record may be taken as if findings of jurisdic- FEDE:HAL TRADE COM IISSIO" DECISIONS Decision 55 F.

banal facts had been dub make in accordance vlth such allegatic)Ts. Said agreement further provides that 1'€3pondents waive all further procedural steps before the herlring cxami11er or the Commission, including- the making of findings of fact or conclusions of law 8.nd the right to challenge or contest the yalic1ity of the order to cease and desist entered in acconl nce \'i:ith such greemcnt. It has also been agreed that the record herein sh8.l1 consist solely' of the complaint and said agreement, that the agreement shall not become a part of the offcial record nn1es,'; :'nc1 until it becomes a part of the deeicion of the Cop.,mission, that said agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the la'.: as alleged in the complaint, that said on12r to cease and desist shall have the same force and eiTect ,1.3 if entered after a fun hearing- and may be altered, modified, or set aside in the manner provided for other orders, aed th,1.t the comphdnt may be llsed in construing- the terms of the order. This proceeding having nmv come on :for final consideration on the complaint and the aforesaid agreement containing- the consent order, and it appearing that the order and agrcement cover a11 of the allegations of the complc.int and provic1e for appropriate disposition of this proceeding, the agreement is hereby accepted and ordered filed upon this decision and said agreement becoming part of the Commission s decision pursuant tn Sections 21 and :3. 25 of the Rules of Practice, and the hearing e aminer accordingly makes the i"ollmving. finding's, for .iurisclidiona1 purposes, and order:

1. Respondent The Salmon an(1 Tuna Sales Cornpan:y is a corporation existing and doing business under and by virtue of the Jaws of the Stale of Waehington, with its offcc and principal place of business now located at 411 Seneca Street, Scatte, Wash, Respondent B. Lon Thrailkil is an individual and is president of The Salmon and Tuna Sales Company and his principal offce and place of business is also now located at 111 Seneca Street Seattle, \'lash.

2. The Federal Trade Commission has j urisclietion of the su bject matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said rcspondents under the Clayton Act, as amended by the Robinson- Patman Act. This proceeding is in lhe interest of the public. THE SALMON AND TUNA SALES COMPANY ET AI,. Decision ORDER It is ordered That The Salmon and Tuna Sales Company, a corporation, and its offcers and directors, and B. Lou Thrailkill individually and as an offcer of said respondent corporation, and respondents' agents, representatives or empluyees, directly or indirectly, or through any corporate or other device in connection with the sale of seafood products in commerce, as "commerce is defined in the aforesaid Clayton Act, do forthwith cease and desist from:

1. Paying, granting-, or allowing, directly or indirectly, to any bu:\' , or to anyone acting for or in behalf of or who is subject to the direct or indirect control of such buyer, anything of value 28 a commit-sion, brokerage, or other compensation, or any allo\vance or discount in lieu thereof, upon or in connection with any sale of their seafood products to sllch buyer for his own account.

2. P2.ying, granting, or passing on, either directly of indirectly, to any buyer or to anyone acting for or in behalf of or subjed to the direct or indirect control of such buyer, brokerage earned or received by respondents on sales made for their packer-principals, by allowing to buyer:; lower prices which reflect all or any part of such brokerage, or by granting them allowances or rebates which are in lieu of such brokerage, or by any other method or means.

DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3. 21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 3d day of .July 1958, become the decision of the Commission; and, accordingly:

It is unlend That the respondents herein shall within sixty (60) days after service upon them of this oreler, file with the Commission a report in ,writing setting forth in detail the manner and form in which they have complied ,,,ith the order to cease and desist.

FEDERAL TRADE COM'\!ISSIO" DECISIO:-S Complaint 55 F.