Advance Junior, Inc.

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in which they have complied with this order. Ix THE 1\LVl'TEH OF ADVANCE .JTNIOR, INC., ET AL.

CONSENT ORDER , ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL 'trade COMMISSION AND THE FLA nIABLE FABRICS ACTS Docket C-133. Complaint, Mav 1962-Decislon, May, .1962 Consent o:rder requiring New York City importers to cease violating the Flammable Fahrics Act by importing, manufacturing, or sellng in C'commerce dresses which were so highly flammable as to 'be dangerous when worn, and by furnishing their customers with 'a false guaranty that the dresses were not dangerously flammable.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and the Flammable Fabrics Act, and by virtue of the authority vested in it by said Acts, the Federal Trade Connnission, having reason to believe that the Advance Junior, Inc., a corporation, and N at Bcrger and Beatrice IGttas, individually and as offcers of said corporation hereinafter refered to as respondents, have violated the provisions of said Acts, and the Rules and Regulations promulgated under the flammable Fabrics Act, and it appearing to the Commssion that a proceeding by it in respect thereof would be in the public interest hereby issues it complaint, stating its cha-rges in that respect as follows:

PARAGK\PH 1. Respondent Advance tTnnior, Inc., is a corporation duly orga.nized, existing and doing business under and by virtue of the laws of the State of X ew York. Respondents N at Berger and Beatrice Kittas are President and Secretary, respectively, of Advance Junior, Inc. The individual respondents formulate, direct and control the policies, acts and practices of the said corporate respondent. The business address of al1 respondents is 1400 Broadway, New York 1128 FEDERAL TRADE COMMISSIOK DECISIONS Comphlint 60 F.

PAR. 2. Respondents, subsequent to July 1, 1954, the effective date of the Flamable Fabrics Act, Im-ve manufactured for sale, sold and offered for sale, in commerce; have imported into the United States; and have introduced, delivered for introduction, transported and caused to be transported, in commerce; and have transported and caused to be transported for the purpose. of sale or delivery after sale in commerce ;as "commerce" is defined in the Flammable Fabrics Act, articles of wearing apparel, as the term "article of wearing apparel' is defined therein, which art.icies of "hearing apparel ""ere under Section 4 of the Flammable Fabrics Act, as amended, so highly flamable a. to be dangerous when worn by individuals. -\among the articles of wearing appnrel mentioned above were dresses.

PAR. 3. Respondents, subsequent to .July 1 , 1954, the effective date of the Flammable Fabrics Act, have manufactured for sale, sold and offered for sale, articles of wearing apparel made of fabric which was under Section 4 of the Act, as amended, so highly flammable as to be dangerous when worn by individuals, ,md which fabric, as the term "fabric" is defined in the Flammable Fabrics Act, had been shipped and received in commerce.

Among the, a.articles of wearing apparel mentioned above were dresses.

PAR. 4. Respondents, subsequent to July 1 , 1954, have furnished their customers with a guaranty with respect to the articles of wearing apparel mentioned )n Paragraphs Two and Three hereor, to the effect tlutt reasonable and representative tests made under the procedure provided in Section 4 of the Flammable Fabrics Act, as amended, and the Rules and Regulations promulgated thereunder show that such articles of wearing apparel are not. , in the fonn livered by respondents, so highly flanl1na.ble under' the provisions of the Flamma.ble Fabrics Act as to be dangerous when worn by iuclividuals. There was reason ror respondents to believe that the artie1es of hearing apparel covered by such guaranty might be introduced sold or transported in comnlerce.

Said guarantywRs false in that in respect to said article,s or wearing apparel reasonable and representative tests had not been made. PAR. 5. The acts and practices or respondents herein alleged \yen and are in violation of the Flammable Fabrics Act and the Hllles and Regulations promulgated thereunder anel as such constitute unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent ancl meaning or the Federal Trade Commi.ssion Act.

ADVANCE JUNIOR, IXC. , ET AL. 1129 1127 Decision and Order DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act and the Flammable Fabrics Act, and the respondents having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint to issue herein, a statement that the signing of said agreement is for settlement purpose:: only and does not constitute an admission by respondents that the law has been violated as set forth in such complaint, and waivers and provisions as required by the Commission rules; and The Commission, having considered,d the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreen1ent makes the following jurisdictional findings, and enters the following order:

1. Respondent, Advance Junior, Inc., is a corporation duly organized, existing and doing business under and by virtue of the laws of the State of N ew York.

Respondents Nat Berger and Beatrice Kittas are President and Secretary, respectively, of Advance Junior, Inc. The business ad dress of all proposed respondents is 1400 Broadway, New York, N. 2. The Federal Trade Commission has jurisdiction of the subject matter of this pr eeding and of t.he respondents, and the proceeding is in the public interest.

ORDER It is ord.eted That t.he respondent Advance Junior, Inc., it corpora tion, and its offcers, and respondents Xat. Berger a.nd Beatrice I(ittas individually and as ornc.ers of said corporation, and respondents representatives, agents and employees, directly or through any corporate or other device, do forthwith cease and desist from: 1. (a.) Importing into the United States; or (b) ltlanufactllring for sale, selling, oiI'el'ng for sale, introducing, delivering for jntroduction, transporting or causing to be transported in conllnerce, as "commerce:' is defined in the Flammable Fabrics Act; or (c) Transporting or causing to be transported, for t.he rmrpose of sale or delivery after sale in commerce:

1130 FEDERAL TRADE COJ\ISSIO:r. DECISIO Syllabus 60 F.

any article of wearing apparel which, wldcr the provisions of Section 4 of the Flammable Fabrics Act, as amended, is so highly flammable as to be dangerous when worn by individuals. 2. lanufacturing for sale, sellng, or offering for sale 'liy article of wearing apparel made of fabric, which fwbric has been shipped or received in comnlcrce, and which, under Section 4 of the B'lammable Fabrics Act, as amended, is so highly (lamnmbJe as to be dangerous when worn by individuals.

3. Furnishing to any person a gLULranty with respect to any article of ..yearing apparel or iabric which respondents, or any of them, have reason to believe 111ay be introduced, sold or transported in commerce which guaranty represents, contrary to fact, that reasonable and representative tests made under the procedures provided in Section 4 of tho Flammable Fabrics Act, as amended, and the Rules and Reguhttions tJwrewlder, show and will show that the article of wearing apparel, or the fabric used or contained therein, covered by t.he guaranty, is not, in the form delivered or to be delivered by the guarantor, so highly flammable 111der thc provisions of the Flammable Fabrics Act as to be dangerous when worll by individuals, provided, however, that this prohibition shall not be applicable to a guaranty furnished on the basis of, and in reliance upon, a guaranty to the same efiect received by respondents in good faith signed by and containing the name and address of the person by whom the article of wearing apparel or fabric was manufactured or from whom it \vas received. It is fUTtlwl' m'del'ed That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the lilanner and form in which they have complied with this order. TUE :\L\ TTER OF S. G. L. MFG. CORP. ET AL.

COXSEX Orner, ETC., IY REGARD TO THE ALLEGED VIOJ A'l' ION Ol THE FEDEJL L TRADE CQ::BIISSlOX AXD TUE FL.DBIABLE FABRICS ACTS Do(;liet 134. Complaint, JIay 19GB-Decision lia.y, 1962 Consrnt. order requiring Xew York City manufacturers to cease violating the Flammable li abrics Act by manufacturing and sellng in commerce dresses made of fabdc so highly flammable as to be dangerous when worn, and furnisbing their customers with a false guarnnt;y that tests had been made and showed that the clres es were not clangeruusl:! flammable. S. G. L. MFG. CORP. ET AL. 1131 1130 Complaint COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act and the Flammable Fabrics Act, and by virtue of the a authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that S. G. L. YIfg. Corp" a corporation, and Nancy Greer, Inc. a corporation, and Sidney Lippman and Sol Greenfield, individually and as offcers of both corporations, hereinafter referred to as respondents, have violated the provisions of said Acts and the Rules and Regulations promulgated under the Flammahle Fabrics Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

P ARAGRAPII 1. Respondents S. G. L. Mfg. Corp. and X ancy Greer Inc., are corporations, duly organized, existing and doing business under and hy virtue of the Jaws of the State of New York. Respondents Sidney Lippman and Sol Greenfield are offcers of both corporate respondents, and formubte, direct and control the policies, acts and practices of said corporate respondents. The business address corporate respondent Kaney Greer, Inc., and an individual respondents is 1400 Broadway, Xew York Y. The business address of corporate respondent S. G. L. Mfg. Corp. is 214 "IV est 39th Street Xew York PAR. 2. Respondents, subsequent to .July 1, 1954, the effective date of the Flammahle Fabrics Act, have manufactured for sale, sold and offered for sale, in commerce; have il1'lported into the United States; and have introduced, delivered for introduction, transpolted and caused to be transportd, in commerce; and have transportd and mused to be transported for the purpose of sale or delivery aftr sale in commerce; as "commerce" is defuled in the Flammable Fabrics Act articles of wearing apparel, as the tenn "article of ","hearing apparel" is defined therein, which articles of wearing apparel wcrc, under Section 4 of the Flanm1able Fahrics Act, as amended, so highly flallnable as to be dangerous when worn by individuals. Among the articles of wearing apparel mentioned above were dresses.

PAR. 3. Respondents, subsequent to July 1, 1954, the effective date of the Flammable Fabrics Act, have manufactured for sale, sold and offered for sale, articles of wearing apparel made of fabric which was, under Section 4 of the Act, as amended, so highly flammahle as to be dangerous when worn by individuals, and which fabric had been shipped and received in commerce, as the terms " article of Well'- 1132 FEDERAL TRADE CO ISSIOK DECISIONS Decision and Order 60 F.

ing apparel fabric" and "commerce" are defined in the Flammable Fabrics Act.

Among the articles of wearing apparel mentioned above were dresses.

PAR. 4. Respondents bane furnished their customers with a guaranty with respect to the articles of wearing apparel mentioned in Paragmphs Two and Three lwreoL to the effect that reasonable a.nd representative tests fin,de under the procedures provided in Section 4: of the Flammable Fabrics Act, as amended, and the Rules and Uegulations promulgated thereunder, show that said articles of wearing apparel are not, in the form delivered by respondents, so highly flammable as to be da,ngerous when \yorn by individuals. There was reason for respondents to believe that tbe articles of wearing apparel covered by such guaranty might he introduced, sold, or transporteel in commerce.

Said guaranty was false in that in respect to said articles of wearing apparel reasonable and representative tests had not been made. PAR. 5. TIle acts and practices of respondents herein alleged ,were and are in violation of the Flammable Fabrics Act and the Rules and RegulatiD11s promulgated thereunder and as such constitute unfair and deceptive acts and practices and unfair methods of competition in commerce within the intent and me,auing of the, Federal Trade Commission Act.

DECISION AKD former The Commission having heretofore deter1nined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act and the FJammable Fabrics Act, a,nd the respondents having been served with notice of said determination and with a copy of t.he eomplaillt the Conuission intended to issue, together with a proposed form of order; and The respondents a-Dd c.ounsel for the Commission having thereafter exeented an agreement cont.aining a. eonsent order, an admission by the respondents of all the jurisdictional facts set forth in the complaint to issue herein, a st,atmnent that the sig1Ting of said agreement is for settlement purposes only and does not constitute an admission by respondents that. the la.w has been violated as set forth jn such complaint, and waivers and provisions as required by the Commission rules; and The Commission, having considered tlw, agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement, ron.kes the follo"ing jurisdictional findings, and ent.ers the following order:

S. G. L. :MFG. CORP. ET AL. 1133 1130 Decision and Order 1. Respondents S. G. L. Mfg. Corp. and Nancy Greer, Inc., are corporations, duly organized, existing and doing business under and by virtue ofthe laws of the State of New York. Respondents Sidney Lippman and Sol Greenfield are offcers of both corporate respondents. The business address of said Nancy Greer Inc., and all individual respondents is 1400 Broadway, New York Y. The business address of said S. G. L. :\1fg. Corp. is 214 West 3Dth Street, N cw York, N. Y.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of t.he respondents, and the proceeding is in the public interest.

ORDER It is OJ'dered That respondents S. G. L. Mfg. Corp., a corporation and its offcers, and Nancy Greer, Ine., a corporation, and its offcers and Sidney Lippman and Sol Greenfield individually and as offcers of both corporations, and respondents' represent.atives, agents and en1ployees, directly or through any corporate or other device, do forthwit.h cease and desist from:

1. (a) ImportingintotheUnitedStates;or (b) 1fanufacturing for sale, selling, offering for sale, introducing, delivering for introduction, transporting or causing to be transported in commerce, as "commerce" is defined in the Flammable Fabrics Act; (c) Transporting or causing to be transported, for the purpose of sale or delivery after sale in commerce;

finy article of wearing apparel which, under the provisions of Section 4 of the Flammable Fabrics Act, as amended, is so highly flammable as t.o be dangerous when worn by individuals. 2. J\ianufacturing for sale, selling, or offering for sale any article of wearing apparel made of fabric, which fabric has been shipped or received in commerce, and which, under Section 4 of the Flammable Fabrics Act, as amended, is so highly flammable as to be dangerous when worn by individuals.

3. Furnishing to any person a guaranty vdt.h respect to ,any article of ,,,hearing apparel or fabric: which.h respondents, Dr any of them, have reason to believe may be introduced, sold or transported in C0I111neree which guaranty rcspresents, cOlltTary to fact, that reasonable and representative tests made under the procedures provided in Section 4 of the Flammable Fabrics Aet, as amended, and the Rules and Regula. tions thereundcr', 5hm, and will show that the article of wearing apparel, or the fabric. used or contained therein, covered by the 1134 FEDERAL TRADE CO \1ISSIOK DECISIOKS Complaint 60 F.

guaranty, is not, in the form delivered or to be delivered by the guarantor, so highly flammable under the provisions of the Flammable Fabrics Act .as to be dangerous when worn by individuals, provided, however, that this prohibition shall not be applicable to a guaranty furnished on the basis of, and in reliance upon, a guaranty to the same effect received by respondents in good faith signed by and containing the name and address of the person by whom the article of wearing apparel or fabric was manufactured or from whaUl it was received.

It is further ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in detail the manner and form in which they l1Rve complied with this order. Ix THE 1\1..\ TTETI OF TRI-VALLEY PACKING ASSOCIATION' ORDER, ETC., IN REAR TO TH ALGED VIOLATION OF SEGS. 2 (a) AXD 2 (d) OF THE CLAYTON ACT Dooket. 7225 and 7496. Complaints, Aug. , 1958 and May 15, 1959- Decision, May 10 , 1.962 Order in two consolidated proceedings requiring a San Francisco canner of fruits and vegetables to cease violating Sees. 2(a) and 2(d) of the Clayton Act by such practices as charging large grocery chains who maintained buying agencies in the San Francisco or " California Street" market, from 2% to 5% less per case than other customers, and granting allowances in specially tailored or negotiated lleals involving promotional activities initiated by certain purchasers without making them available on proportionally equal terms to the latters' competitors. COl\PLAINTt The Federal Trade ComJllission, having reason to believe that the party respondent named in the caption l1ereof, and hereinafter more pa.rticularly designated and described, hns violated, and is now violating, Section 2 (a) of the Clayton Act (U.sC. Title 15, Sec. 13), as amcnc1ed by the Robinson-Patman :\ct, approved June 19 , 1936 hereby issues its complaint stating its charges with respect thereto.o as follows:

tlncorrectl;y named in the complaint in docket 7225 as Tri-Valley Packing Association, Inc.

tDoC'ket No. 7225.

TRI-VALLEY PACKL"G ASSN, 1135 1134 Complaint P ARAGRAPli 1. Respondent, Tri- Valley Packing Association, Inc. is a non-profit, cooperative corporation organized and existing under the Jaws of thc State of California, with its principal offce and place of business located at 240 Battery Street, San Francisco, Calif. PAR. 2. Respondent is now and has been engaged in the business of selling and distributing canned fruits and vegetables of many varieties, all of which it processes and cans at its plants in Modesto San Jose and Stockton, California. Respondent sells and distributes its canned fruits and vegetables under the private labels or brands of its purchasers, and also under its O\Vll labels or br,ands. Respondent sells its products of like grade and quality to a large number of customers located throughout the United States for use conswnption, or resale therein, including wholesalers, retailers, chain stores and associations. Respondent's sales of its products are substantial, amount.ing in the fiscal year ending January 31, 1956, to $19 698 531.00.

PAR. 3. In the course and conduct of its business, respondent has engaged in commerce, as "commerce" is defined in the Clayton Act in that respondent ships its products, or causes them to be shipped from its places of business to purchasers located in States other than the State of California.

PAH. 4. In the course and conduct of its business, respondent is in substantial competition with other corporations, partnerships, individuals, and firms engaged in the canning, sale and distribution of canned fruits and vegetables, in commerce.

iany of respondent's purchasers are likewise directly or indirectly in competition with each other in the resale of respondent' s products within the same trading areas.

PAl. 5. In the course and conduct of its business, respondent has been and is now discriminating in price between different purchasers of its products, by selling said products to some of its purchasers at higher prices than it sells its products of like grade and quality to other purchasers who are competitively engaged in the resale of said products, within the United States, with customers paying the higher prices.

PAR. 6. Some specific illustrations of representative discriminations in price for certain products of like grade and quality sold by respondent during thc year 1957 to its competing favored and nonfavored buyers are as follows:

llBspondcnt sold canned apricots 24/2'\ to The Regent Canfood Company, Denver, Colorado, at a price of $5. 30 per case, while respondent, during the same approximate period of time, sold similar Complaint 60 F.

products of like grade and quality to a competing purchaser, Associated Grocers of Colorado, Denver, Colorado, a.t $5.70 per case. Respondent sold canned spinach 24/303 to First K ationa.1 Stores East IIartford, Connect-ient, at a price of $2.00 per case, while respondent, during the same approximate period of time, sold similar products of like grade and quality t.o J OJUl Bozzuto & Sons, Inc. 'Vaterbury, Connecticut, a \,wholesaler, at $2. 15 per case. That company has resold said products to retail stores who are in competition in the resale of said products with store units of First National Stores. Respondent sold canned peaches 48/8 to American Stores, Newark Xcw Jersey, at a price of 64.40 per case while respondent, during the same approximate period of time, sold similar products of like grade and quality.y to a. competing purchaser, The Grand L union Co. East Paterson, New Jersey, at $4.70 per case. Respondent sold canned peaches -18/8 to The Great Atlantic & Pacific Tea Company, Paterson e'Y Jersey, at a price of $4.40 per case, while respondent, during the sanle approximate period of time sold similar products of like grade and quality to a competing purchaser, The Grand L:union Co., :East Paterson, Xcw Jersey, at $4. per case.

Respondent sold canned peaches 24/2% to The Great Atlantic & Pacific Tea Company, Portland, :\Iaine, at price of $4.90 per case while respondent, during the same approximate period of time, sold similar products of like grade and quality to n, competing purchaser Hannaford Bros. Co., Portland, Maine, at $5.30 per case. Respondent sold canned peaches 24/2% to The Grea.t Atlantic & Pacific Tea Company, East Peoria, Illinois, at a. price of $4.70 per case, while respondent, during the same approximate period of time sold similar products of like grade and quality to a competing purchaser, Oakford Co., Peoria, Illinois, at $5.05 per case. PAR. 7. The effect of such discriminations in price made by respondent, as hereinbefore set. forth, may be subsbtntially to lessen competition or tend to create a monopoly in the lines of COITnerce in which respondent and its purchasers are respectively engaged, 01' to injure, destroy, or prevent competition with respondent and with purchasers from respondent \\"ho recei\-e the benefit of such discriminations.

\R. 8. The discriminations in price, as hereinbefore alleged, are in violation of the provisions of Section 2 (a) of the Clayton Act, as amended by the Hobinson-Patman Act. TRI-VALLEY PACKING ASSN. 1137 1134 Complaint CO::IPLAINT The Federal Trade Commission, having reason to believe that the above-named respondent has violated, and is now violating, Seetion 2(d) of the amended Clayton Act (15 D. , Sec. 13), hereby issues its complaint, stating its c.charges as follows: PARAGRAPH 1. Respondent is a non-profit cooperative corporation organized and existing under the laws of the State of California, with its principal offcc and place of business located at 240 Battery Street San Francisco, Calif.

PAR. 2. Hesponclent is now, and has been, engaged in the business of seHing and distributing canned fruits and vegetables of llany varieties, all of which it processes and cans at its plants in lodesto San Jose, and Stockton, California. Respondent sells and distributes its canned fruits and vegetables under the priyatc labels or brands of its purchasers and also under its O\1'n labels and brands. Respondent sells its products to a large number' of c.customers located Lhroughout the United States for use, consumption, and resale therein including wholesa.lers, retailers, c.chain stores, a.nd associations. Respondent' s sales of its products exceeded $19 000 000 in the fiscal year ending January 31 , 1956.

PAR. 3. In the course and conduct of its business, respondent has engaged in commerce.e, as "commerce" is defined in the amended Claytall Act in that respondent ships its products, or cause them to be shipped, from its places of business to customers located in states other than the State of California.

PAR. 4. In the course and conduct of its business in commerce, respondent is in substantial competition with other corporations, partnerships, individuals, and firms engaged in the canning, sale, and distribution of callned fruits and vegetables. )rially of respondent' s customers are likewise engaged, elireeily or indirectly, in competition with each other in the resale of respondent' products within the same trading area.

PAR. 5. In the course and eondnet of its business in commerce, rcspondent has been, and is now, paying advertising and promotional allowan( es to cell.ain favored customers without making the allo,,' ances available on proportionally equal terms to all ot.her customers competing in the distribution of their products. For example, re,spolldent has participat.ed in the periodic promot,ion plans of Fred JIeyer, Inc., of Portland, Oregon, occurring annually for many years. In 1957 respondent paid $350 for participa- '"Docket o. 7495.

1138 FEDERAL TRADE COMMISSION DECISIOKS Initial Decision 60 F.

tion in a coupon book program occurring during September and October. In addition to this, respondent redeemed about 27 750 coupons at thc September 1957 price of canned peaches, the net effect of which was to p y Fred Meyer, Inc. , the value of one can of peaches for every two actually purchased.

Such allowances were not offered or made available on prop ortlonally equal terms by respondent to all other customers competing in the resale of respondent's products with that customer receiving thc allowances.

PAR. 6, The acts and practices of respondent, as alleged above violate Section 2(d) of the amended Clayton Act (15 C. Sec. 13). iI r. Franklin A. Snyder for the Commission. ilr. Ricardo J. Hecht of San Francisco, Calif., for respondent. INITIAL DECISION BY EDGAR A. BUTTLE, I-lEARXG EXAMINER On August 6, 1958, the Federal Trade Collssion issued its complaint in this proceeding (Docket No. 7225)' against the respondent charging it with a violation of Section 2 (a) of the Clayton Act, as amended by the Robinson-Patman Act.

Respondent, as the allegations of thc complaint assert is a California non-profit, cooperative organization engaged in the business of selling and distributing many varieties of canned fruits and vegetables, which it processes in three cities in California. Respondent, as these allegations also assert, sells its products to customers located throughout the LTnited States, who purchase for use, consrnnption and resale therein. These aJlcgations likewisc assert that during the fiscal year ending January 31, 1956, respondent's sales amounted to $19 698 531.00, and that respondent in the course and conduct of its business ships its products from its places of business in California to purchasers located in states other than California. By these allegations it is also asserted that respondent is in competition with other persons engaged in the business of canning, selling and distributing fruits and vegetables, and that "many" of its purchasers are "directly or indirectly in competi tion with each other in the resale of respondent's product within the same trading areas.

1 Respondent Tri-Valley Packing Association was erroneously referred to in the complaint as Trl-Valley Packing- Association, Inc. By stipulation before Hearing Bxaminer Kolb, the proceeding identified under Docket ::a. 7496, which charges a violation of 2 (d) of the amenued Clayton Act, was made a part of the bearings in Docket o. 7225 , the consolidation being agreed to by counsel. lile complaint was Issued In this case on Uay 10, 1959, charging the rc::pondent with paying advertising and promotional allowances to certain favored cl1stomf'rs. Respondent denies the substantive charges alleged.

TRI-VALLEY PACKING ASSN. 1139 1134 Initial Decision Paragra.ph 5, the charging paragraph of the complaint, relative to the 2 (a,) violations asserted, alleges as follows: In the course and conduct of its business, respondent has LJeen and now is discriminating in price between different purchasers of its products by sellng said products to some of its purchasers at higher prices than it sells its products of like grade and quality to other purchasers who are engaged competitively in the resale of said products within the United States, \"ith customers paying the higher prices.

Paragraph () of said compla.int sets forth six alleged "specific illustrations of representative discriminations in price for certain products of like grade and quality sold by respondent in 1957 to its competing favored anclnon-favored buyers.

In the first of these illustrations, the favored competing buyer is Safeway Stores Incorporated, Denver, Colorado, hereinafter called Safeway," and the non-favored competing buyer is Associated Grocers Inc. of Colorado, Denver, Colorado, hereinafter called "Asso- " :Iciated.

In the second of these illustrations the favored competing buyer is First National St.ores, East I-Iartford, Connecticut, hereinafter called First Xittional " and the non-bvored competing buyer is John Bozzuto & Sons, Inc., 'Vaterbury, Connecticut, hereinafter called "Bozzuto a wholesaler who resold the products involved to " retail stores who are in competition in the resale of said products with store units of First X ational."

In the third illustration the favored competing buyer is American Stores, Newark, New Jersey, hereinafter ealled "American " and the non-favored competing buyer is The Grand Union Co., East Paterson New J erscy, hereinafter called "Grand LTnion. In the fourth, fifth and sixth illustrations The Groat Atlantic and Pacific Tea Company, hereinafter called "Grmtt Atlantic" is the fa- \Torecl competing buyer, and Grand Union, Hannaford Bros. Co., Port- " and Oakford Co. land, Maine, hereinafter called "Hannaford Peoria, Illinois, hereinafter ea.lled 'I Oakforcl" are the non-favored buyers.

Paragraph 7 of the complaint a.Jleges that the "effect of such discriminations ronde by respondent may be substantially. . . to lessen competition or tend to create a rnonopoly in the lines of commerce in which respondent and its purchasers are respectively engaged, or to injure, destroy, or prevent competition with respondent aJld with 3 "The Regent Canfood Company" Is expressly named as the fa,orccl buyer, but repondent concedes that this is merely a trade Ufime under which Safcway conducts its buying operations.

'119-603-64-- 1140 FEDERAL TRADE CO),D,IISSIOX DECISIONS Inital Decision 60 F.

purchasers from respondent who receive the benefit of such discriminations. "

Prior to answer, on or about September 19, 1958, respondent applied to Loren H. Laughlin, hearing examiner, lor a bill of particulars. On September 25, 1958, counsel supporting the complaint filed an answer opposing the application. The application was denied by said exa,miner on October 2, 1960.

Rcspondcnt, a,after the deni"J of s"id appJieation for" bill of particulars, fied its Answer.

Respondent' s answer adn1its all the allegations of paragraph 1, and porticms of paragraphs 2, 3, and 4 of the complaint, and denies all the "llegations of paragraphs 5 , 6 , 7, and 8. The answer also sets up three defenses as follows:

'Vitbout waiving any of the denials hereinabove set forth, responc1el1t interposes the folloTIing further and separate defenses to the charges contained in said complaint:

FIRST DBPENSE:

The different prices if any, charged by respondent to its purchasers c.llpeting in the resale of its goods of like grade :and quality Il1al e only dne allowance for differences in the cost of manufacture, sale or deli"ery resulting from 111e differing methods and quantities in which such goods are to such ImrchascI's solel nne! delivered.

SECOND DEFENSE:

The different prices, if any, charged by rcsl10JHlent to its purchasers competing in the resale of its goods of like grade and quality '-;ere in response to changing conditions affecting the market for or the marketabilty of said goods. TIIIRD DEFENSE:

The lower prices if any, charged by respondent to any purchaser or purchasers were made in good faith to meet the equally low price of a competitor or competitors, After the filing of the answer, said examiner set the initial hearing for February 5, 1959. On J anu"ry 6, 1959, said examiner issued a subpoena duces teCUJ11 directed to respondent. Aft.er the service of t.he subpoena on January 22, 1950, respondent. filed a. motion to quash and limit the same. The motion was opposed by answer filed by counsel supporting the complaint on January 28, 1959. Respondent also filed a motion to make the application of the subpoen" a part of the record. (Filed January 26, 1959. ) This motion was also opposed by the attorney supporting the complaint. (Answer filed January 28, 1959.

By order filed February 2, 1959, said hearing examiner granted the motion to make the application a part of the record. This ordcr also denied, except in minor respects, respondent's motion to quash, By this order sa-id exa,mincr also cancelled the initial hearing. TIn-VALLEY PACKING ASSK. 1141 1134 Initial Dedsion On or about March 6, 1959, respondent appealed to the Commission from said examiner s order denying its motion. On or about M:arch , 1959, counsel supporting the complflint filed his reply to respondent' s appeal.

On or about :Iay 11, 1959, thc Commission made its order denying respondent' s appeal.

On July 9, 1959, at the initial hearing of this matter, Earl J. Kolb hearing examiner presiding, respondent refused to comply \v"ith certain of the spc ifications of said subpoena. Thereafter, on .July 14 1959 the COlmnission applied to the District Court of the United Stlttes for the )I orthern District of Califurni'a, Southern Division, for an order enforcing said subpoena. On August 10, 1959, respondent filed its answer to said application. Thereafter, on August 12, 1959, respondent and the Commission stipulated to an order by said court, the material parts of which areas follows:

. . . respondent shall produce. . . for copying and inspection, the following: 1. Such books, records, and documents as wil disclose: (a) The addresses of five (5) customers of respondent engaged in the resale of its products, during each of the years 19GG, 1957, and 1958; (The names of five (5) customers to be specified in the \written notice above-mentioned. (b) The method of sale ("dired" or "indirect" ) to each of said customers mentioned in (a) and the name of the broker, if "indirect" (c) he total volume of sales to each said customer mentioned (2), per year; (d) The total amount of all rebates, discounts, or allowances, if any, paid or allowed per year to said customer mentioned in (a), indicating the type for each SW11.

2. All invoices and credit memoranda for a11 sales during 1956, 1957, and 1958 for all customers engaged in the resale of respondent's products in the trade areas of Boston, Massachusetts; Waterbury, Connecticut; Denver-Pueblo, Colorado area; Portland, )laine; Peoria, Illnois; Philadelphia, Pennsylvania, and Pittsburgh, Pennsylyania; and Portland, Oregon. For the purposes of this order the words " trade area" sball be given theircommonly accepted definition as including not only the area of the cities named but also contiguous suburbs which are inelurled in that normal trading area. Subsequent to the making of this stipulated order cOlilsel supporting the complaint inspected the records of respondent described therein. "\V11ile inspecting said records said counsel prepared therefrom certain tabulations which are in evidence as Commission s Exhibits Kos. 33 to 49.

In due course evidence "was submitted in support of the complaint at hearings jn San Francisco, California; Port.land, Oregon; Denver Colorado; Boston, 1Iassflchusctts; l\CW York, New York; and Pittsburgh, Pennsylvania. At this Just mentioned hearing, on 1Iarch 10 1960, counsel supporting the complaint closed his case in chief. 1142 FEDERAL TRADE COMMISSIO)/ DECISIOKS Initial Decision 60 )j-hearings held in San Francisco, California, beginning on October 31 1960, respondent presented its evidence in defense. Edgar A. Buttle tohearing examiner, presided at the last mentioned hearing pursua,nt stipulation of counsel for both sides.

Proposed findings of fact and conclusions of Jaw were thereafter filed by chill!:el for both sides. The hearing exanlincr has Ct1refully rcvim,ed and considered same. Proposed findings and conclusions ,which afe not herein adopted, either in the Tann proposed or in substance are rejected as not supported by the. record aras involving ilnmaterial ma,tters.

upon the entlre record in the case the hearing examiner makes the following:

FINDI GS OF FACT 1. Respondent, Tri-Valley Packing -,\.association, is a non-profit, cooperative corporation organized and existing under the laws of the State of California, with its principal offce and place of business located at 240 Battery Street, San Francisco, Calif. 2. Respondent is nO\v and has been engaged in the business of selling and distributing canned fruits and vegetables of many varieties an of ,,-which it processes and cans at its pJnnts in :.Joc1esto, San Jose and Stockton, California. Respondent sells and distributes its canned fruits and vegetables under the private labels or brands of its purchasers, and also under its own labels or brands. 3. Re.sponclent sells its products of like grade and quality to a large number of cust.omers located througlwut the United States for nse consumption, or resale therein, including \vholesalers, retailers, chain stores and associations.

4. Respondent's sales of its products are substantial, amounting in the fiscal year ending January 31 , 1956, to ii19 69S 531.00. 5. In the course and conduct of its business, respondent has engaged in c.ommercc, as "commerce ' is defined in the amended Clayton Act in that respondent ships iis products, or ca.uses them to be shipped from its place of business to customers located in stfltes other than the State of California.

6. In the course and conduct of its business in commerce, respondent is in substani1al competition -with other corporations, partnerships individnals, and finns engaged 111 the canning, :mle and aistl'ibution of canned fruits and vegetables.

, directly 01' 7. ):fany of respondents customers arc like\,ise engaged indirectly, in cOlnpetition \"iih each other in the resale of respondent' products within the. same tra.ding area.

TRI-VALLEY PACKIJ\ G ASSN. 1143 1134 Initial Decision 8. In the COllrse and conduct of its business, respondent sold its products to I-Iudsonl-Iousc, Inc., of Portland, Oregon, at higher prices than it sold its products of like grade and quality to Fred Meyer, Inc. and Regent Canfood (Safeway Stores) of Portland, Ore.gon. Further, at times, respondent sold its products to Fred Meyer, Inc., at higher prices than it sold its products of like grade and quality to Regent Canfood (Safmyay Stores) of Portland, Oregon. 9. .Hudson I10use, Inc., of Portland, Oregon, is competitively engaged in the distribution and resale of responc1enes products of like grade and quality: withhl the rnitecl States, with Fred leyer, Inc.. and Regent Canfood (Safeway Stores), also of PortJ,md, Oregon. 10. The eircct of such differentials in price made. by respondent: between I-Iudson House, Inc., Fred j)Ieyel', Inc. , and Regent Canfooc1 (Snfe,yay Stores), all of Portland: Oregon, may be substantially to lessen competition or tend to create a monopoly in the lines of commerce in which I-Iudson House, Fred ::leye.r, Ine., and Regent Canfood (Safeway Stores), of Portland, Oregon, ure engaged, Or to injure destroy or prevent competition \with Fred Ie:ver, Inc., and Regent Ca.nfood (Safevl'Y Stores) of Portland, Oregon, ,y11o received the benefit of such price dificrentiaIs.

11. In the course and conduct of its business, respondent sold its products to Central Grocery and Standard Grocery of Boston, Massachusetts, at higher prices than it sold products of like grade w1d quality to First National Stores and A , P of Boston, Massachusetts. 12. Central Grocery and Standard Grocery of Boston, Massachusetts, are competitively engaged in the distribution and resale of respondent' s products of like grade 'Uld quality, within the Cnited States, with First National Stores and &: P also of Boston Jlassachusetts.

13. The effect of such differentials in price made by respondent between Central Grocery, Standard Groce-ry, First National Stores and A &, p all of Boston, l\Iassaehusetts, may be substantially to lessen competition or tend to create a 111011Opoly in the Jines of commerce in which Central Grocery, Standa.rd Grocery, First K ational Stores and A & P of Boston, JIassachllscttS: are engaged, or to injure, destroy or prevent competition with First Klltionlll Stores and A & P of Boston l\fassaehusetts, who received the benefit of such price diife.rentials. 14. In the COllrse and conduct of its business, respondent sold its products to :Hannaforc1 Bros. Qo., of Portland, Jlaine, at higher prices 4 SPt' .\appendix . , flJllle:-el1, p. 11;)8 See Appendix B , annexed ib.

1144 FEDERAL TRADE COr.1JIISSION DECISIONS Initial Decision 60 F.

than it sold its products of like grade and quality to A 8. P of Portland l\faine.

15. Hannaford Bros. Co., of Portland, ::Iaine, is competitively ell gaged in the distribution and resale of respondent's products of like grade and quality, within the United States, with A 8. P, also of Portland, Maine.

16. The eflect of such differcntials in price made by respondent bet" een Hannaford Bros. Co. and A 8. P, both of Portland Iainc may be substantially to lessen competition or tend to create a monopoly in the lines of commerce in which Hannaford Bros. and A 8. Pare engaged, or to injure, destroy or prevent competition with A 8: P, of Portland, Maine, who received the benefit of such price differentials. 17. In the course and conduct of its business, respondent sold its products to John Bozzuto & Sons of ,V at.erlmry, Connecticut, at higher prices than it sold its products of like grade and quality to First National Stores of Hartford, Connecticut, and A 8. P of Springficld Connecticut.

18. John Bozzuto 8. Sons of Waterbury, Connecticut, is competitively engaged in the distribution and resale of respondent's products of like grade and quality, within the United States, with First National Stores of Hartford, Connecticut, and A 8. P of Springfield Connecticut.

19. The eflect of such differentials in price made by respondent between Jolm Bozzuto 8. Sons, First National Stores and A & P, of Waterbury, Connecticut, Hltrtford, Connecticut, ltnd Springfield Connecticut, respectively, may be substantia.lly to lessen competition or tend to create it monopoly in the line.s of commerce in which ohn Bozzuto & Sons, First ational Stores and A & P are engaged, or to injure, destroy or prevent competition "with First National Stores and A & P of Hartford and Springfield, Connecticut, respectively, who received thc benefit of such price differentials, 20. In the course and conduct of its business, respondent sold its products to Associated Grocers, Inc. , Spiegel Bros., Star Markets General Grocery, IV. E. Osborn Co., and Pittsbmgh J\el'cltntilc of the PHtsburgh, Pennsylvania area, at higher prices than it sold its products of like grade and quality to A 8. P of Pittsburgh (Homewood), Pennsylvanilt.

21. Associated Grocers, Inc., Spiegel Bros, IV. E. Osborn Co., Star 1\larkets, General Grocery and Pittsburgh l\Iercantilc of the Pittsa See .'\.ppenc1ices C, D , and E , annexed, pp. 1158, 11GO. 1 See Appendices F, G, find E , annexed, pp. 1161, 1162. 8 See Appendices I and J, annexed, p. 1163. ,, , . TRI-VALLEY PACKING ASSN. 1145 1134 Initial Decision burgh, Pennsylvania. area, are competitively engaged in the distribution and resale of respondent's products of like grade and quality, jthin the United States, with A & P, also of Pittsburgh, Pennsylvania. 22. The effect of such differentials in price made by respondent between W, E. Osborn of :' ew Brighton and Associated Grocers, Inc. Spiegel Bros., Star YIarkets, General Grocery, Pittsburgh Mercantile and A & P, all of the Pittsburgh, Pennsylvania area, may be substantially to Jessen competition or tend to create a monopoly in the lines OT commerce in which Associated Grocers, Inc., Spiegel Bros. Star Markets, General Grocery, ,V. E. Osborn Co" Pittsburgh Mercantile and A & P of Pittsburgh, Pennsylvania, arb engaged, or to injure, destroy or prevent competition with A & P of Pittsburgh Pennsylvania, who received the benefit of such price differentials. 23. In the course and conduct of its business, respondent sold its products to ,Yalkay Grocery Co. Jersey City, :'ew Jersey; Middendorf & Rhors, New York City; Grand Union, Paterson, New Jersey; Packard Bamberger, Hackensack, New Jersey; and ,Yakefern Foods, Cranford, X ew J crscy, at higher prices than it sold its products of like grade and quality to A & P, Paterson and Hawthorne, New Jersey, Regent Clmfood (Safeway Stores), Kearney, Xew Jersey; and American Stores, Newark, New Jersey.

24. ,Yalkay Grocery Co., Middendorf & Rhors, ,Yakefern Food Grand Union and Packard Bamberger, are competitively engaged in the distribution and resale of respondent's products of like grade and quality, within the United States, with A & P, Paterson and Hawthorne, New Jersey; Regent Canfooc! (Safeway Stores), Kearncy, Ne\v Jersey; and American Stores ewark, New Jersey. 25. The effect of such differentials in price made by respondent between ,Yalkay Grocery Co., Jersey City, Kew .Jersey; .:Iiddendorf & Bohrs, Xew York City; Granel Union, Paterson ew Jersey; Packard Bamberger, Hackensack, Xew Jersey; 'Vakefern Food, Cranford New Jersey; A & P, Paterson and I-Ia\vthorne, New .Jersey; Regent Canfood (Safer\ay Stores), ICenTney, New .Jersey; and American Stores, KewaTk, :New Jersey, may be substantially to lessen competition 01' tend to create a monopoly jn the lines of commerce in 'ivhich IYaJlmy Grocery Co. , ).iicJc1cndorf & Rohrs, Gmnc1 Fnion, Packard Bamberger, lYakefern Food, A & P, Regent Canfoocl (Safeway Stores), a.nd A1l1crican Stores are engaged, or to injure, destroy or prevent competition with A & P, Regent Canfooc1 (Safeway Stores), nncl American Stores, who received the benefit of such price c1ifferentials.

See ..'.ppendices K, L , 1\! ),' flul! 0, :ml1e l'd, pp. 1154 , I1G3 , 11()13. 1146 FJoDERAL TRADE COMMISSIOK DECISIO Initial Decision 60 F, 26. In the course and conduct of its business, respondent sold its products to Associated Grocers of Colorado, and H. A. Marr, of Denver-Pueblo, at higher prices than it sold its products of like grade and quality to Regent Can food (Safeway Stores) of Denver. 27. Associat.ed Grocers of Colorado of Denver-Pueblo, Colorado find 1-1. A. 1V1a1'1' of Denver, Colorado, ate and ,were competitively engaged, respectively, in the distribution and resale of respondents products of like gradc and quality, within the United States, "ith Regent Canfood (Safeway Stores) also of Denver, Colorado. 28. The effect of such diff81'entials in price made by respondent between Associated Grocers, Inc' j H. A. larr, and Regent Canfood (Safe"ay Stores), aJ! of Denver-Pueblo area, may be substaut.ially to lessen competition or te,nel to create a monopoly in the lines of commerce in which Associated Grocers, Ine. , H. A. Iarr, and Regcnt Canfood (Safcway Stores), of Denver, arc or were engaged, or to injure, destroy or prevent competition with Regent Canfood (Safen-8.Y Stores), who received the benefit of such price differentials. 29. In the course and conduct of its business, respondent has been and is now discriminating in price between different purchasers of its products, by selling said products to smne of its purchasers at higher prices thnn it sens its products of lib grade and quality to other purchasers Vdl0 are competitively c11gagecl in thc distribution and resale of said products, -within the United States, with customers paying the higher prices.

30. The effect of such discriminations in price made by respondent as hereinbefore set fOlih, may be substant.ially to lessen competition or tend to creat.e a Inonopoly in the lines of commerce in which respondent' s purc1wsers are respectively engaged, or to injure, destroy, or prevent c.ompetition in such lines of conllnerce. 31. The price cEfIere,ntials as hereinabove found, are not just.ifiable in terms of savings to respondent in the cost of nlanufacturing, distribution or s tle of the products to t.he purchasers involved, or market fluctuation.

32. The price differentials, as hereinabove, found, were not made to meet t.he lawful price of a compet.itor in the sense of Section 2(b) of the amended Chyton Act.

, are 1n viola- 33. The discriminations in price, as hereinaboye found tion of the provisions of Section 2 (a) of the amended Clayton Art as mneIHlecl by the Robinson-Patman Act.

34. Respondent has participated in the periodic. promotion plans of Fred :Meyer, Inc., of Portland, Oregon, occurring annually for many c See Avpendices P, Q, alll R, annexed, pp. llg7 , 11GB. . \ TRT-VALLEY PACKn,w ASSN, 1147 I134 Initial Decision years, In 1937 respondent pa.id $350 for participation in a coupon book program occurring during Septelnber and October, In addi tion to this, respondent pa.id Central Grocers, of Doston, l\fassachusetts, $150 per year for advCliising in its "order book." Such allowances \Were not offered or made available on proportionally equal terms by respondent to a11 other customers competing in the distribution of respondent:s products \with that customer receiving the allmvances. 35. In the course and conduct of its business in conllnerce, respondent has been, and is now, paying advertising and promotional allowances to certain fa voreel customers without making the allmyances available on proportionally equal terms to all other customers competing in the distribution of its products in violation of Section 2(d) of the amended Clayton Act (15 U. c. Sec. 13). DISCUSSION REL\TIYE TO FINDlKGS AXD APPLICABLE TO LAW The respondent urges that there is no evidence in the record that the effect of any CDndllct of respondent has or may result in injury gcncrally to the industry in which it is engaged, or to the industry to which its customers belong, or to a.ny considerable portion of such industry:y. Contra,ry to this assertion, the evidence does establish inferentially that a substa,ntial segment of the industry to. which the respondent' s customers belong nlay be injured competitively as a result of the conduct of respondent. Although the evidence supporting the charged 2 (a) violation of the Clayton Act docs not disclose in what respects the proved discriminations in price did, in fact, adverse1y affect or cause injury to competition, it is well settled that Secbon 2 (a) does not require a finding that the price discrbninations haxe, in fact, adversely a.ffected c0111petition. Thc language of Section 2(a) is "may be substantially to 1esscn competition. . . or to injure, destroy, or prevent competition with any person who. either grants or knmvingly reccives the benefit of such discrimination, or with customers of either of them. The statute is designed to reach such discriminations ' in their incipiency,' before the harm to compe tition is eUected. It is enough that they 'may' have the prescribed e.tIect.:: 11 The meaning of t.he "Ford "may" has been phrased in various ways, In the COTn Products case, the Supreme Court stated: ". , . The use of the word 'mai \vas not to prohibit discrilninations having 11 Corn Products Refining Co. Y. Federal 'l' rac1-e Commission 324 U. S. 726, 738, 742 (1945) ; FerZel' al Trade Commission v. Morton Salt Co. 334 U. S. 37 , 46 (1948) ; d, Standard Fasll1:on CO. Y. Magrane-IJollston Co. 258 U. S. 346, 356, 357 (1922) ; Moog Inr/ustricR 111(: Fed-era,l, 1'I' ode Commission 238 F. 2d 43, 51 (8th Cil' . 1956) : Whitaker' Coble Corp. v, Federal Trade Commission 239 F. 2d 253, 254 (7th Cir, 1956), , ,, 1148 FEDERAL TRADE COMMISSION DECISIOKS Initial Decision 60 F.

the mere possibility' of those consequences, but to reach those which would probably have the defined effect on competition. Later in the same case, the Court declared: 13 "As we have said, the statute does not require that the discrimination 111list, in fact, have harmed competition, but only that there is a reasonable possibility that they ' may have such an effect." This statement was repeated in the MOTton Salt case H with the qualification that it "is to be read also in the light of the Corn Products case. " 15 A key question under Section 2 (a) is: \\11at test is to be applied and, corre1atively, what kind of proof is required in determining \\whether a discrimination in price injures or may re,asonably tend to injure competition? In other words as Section 2(a) intended to reach discrirninatory practices resulting merely in injury to one or several competitors, and is it enough to prove such individual injury or must there be a showing of injury to competition in particular market? -endcr "hat circumstanee-s may injury to a competitor con- 11) stitute a sllbstantiallessening of competition in the relevant market? In Sa17/1uel H. //103s, Inc. Federal Trade Oom/rrd8sion 17 the Second Circuit had held that proof of the bare fact of price differentials established a prima facie case of a violation of Section 2 (a) and that respondent had the burden of proving absence of injury under Section 2 (b) Y This decision was contrary to earlier findings that the I, cderfll Tnlde Commission had the burden of proving that there. was competitive injury as required by Section 2(a) whereupon the respondent could invoke the defenses allo"\ecl under Section 2Y Hmy,ever, in 1954 , the widely disputed Jl08s doctrine was clearly rejected in the first Genel' al Foods Corp. case 20 which also stated a new Commission position as to the test for determining competitive injury under Section 2(a). L--nder this deeision the burden of proof 324 U. S. at 738.

1:1 Id. , at 742.

11234 u. S. at 46.

15 Ibid., footnote 13.

16 For a discussion, see Burns, A Summary of a Study of the Antitrust Laws 1 ANTI- TRUST BULLETIK 695, 707-712 (1956).

148 F. 2d 378 (2 Cir. 1945).

)S Section 2 (b) provides that:

Tpon proof being made. . . that there has been dis('rimination . . ., the burden or rebutting the prima facie case thus made by showing justification shall be upon the person charged with a violation of this Section. . lI In A. E. Staley Mfg. Co. Y. Federal Trade Comm/saion 135 F. 2d 453, 455 (7th CII'. 1943), the court held: "There must be . . . a finding. . . that the discrimination had the effect substantially to lessen competition or tend to create a monopoly. CleDI'ly, Congress meant something besides the mere showing of discrimination itself. J! F. C. Docket No. 5675 (April 27, 1054). The view expressed in this case Is in accord with Pw.e:J Oorp., Ltd. '1' C. Docket :No. 6008, at 7-16 (inital decision April Hi 1954, adopted by the Commission September 15 , 1954). See also The Yale And Towne Mfg. Co. C. Docket Ko. 6232 , at 3-5 (June 28, 1050). TRI-VALLEY PACKING ASSN. 1149 1134 Initial Decision to establish injury to competition is with the complainant. .. prima facie cltse of violation of law requires proof of all three of the following elements: (1) discrimination in price between different purchasers of commodities of like grade ,md quality; (2) certain jurisdictional facts; and (3) competitive injury. Differences in price without competitive inj ury are not illegal. " The standard for determining the unlawfulness of an unjustified price discrimination, namely, the substantiality of ihe effects reasonwbly probable, is the swme whether the c01npetitive injury occurs at the seller level or at the customer level. The fact of injury is to be determined in a.J cases by a consideration of aJl the competent and relevant evidence and inferences ,which may " 21 be reasonably drawn therefrom.

In recent cases involving impairment of competition on the customer level rather than among the- Sener' and its rivnls, the leading ease is 3100g lndustr,:es, 1nc.23 Respondent, a manufacturer of automobile spare a.nd repair parts, granted to its customers, at the end of each annual period, a retroactive volume rebate consisting of a flat graded percentage of the aggregate cloHar volume of their respective purchases in the preceding year. This rebate plan resulted in price differentials among its customers, which were held unla Wflll under Section 2 of the Robinson-Patman Act.

The Federal Trade Cornmissiol1 stated:

'l' he substantiality of respo-uc1ellt's price differences and the probabilty of injury to competition can best be showll by comparing it with the competitive effect of the amount reVl'esented by respondent's standard 2% discount for cash given to all customers. Distributors of respondent testified that they invariably took advantage of this 2% cash discount and that this discount was essential to the conduct of their respecti,e businesses. Testimony in the record also indicates that the market in 'Thich these distributors compete is highly competitive with many dealers handling from 15 to 75 different lines of auto- 2: Id. , at 2. See Pederal Tra(/e Commission v. Morton Sa.U Co. 334 U. S. 37 (1948). The Attorney General's Committee approved the rationale of the first General Foods decision and recommended "that analysis of tJ1e statutory 'Injury ' center on- the vigor of competition in the market rather th.an bardship to Individual businessmen. ,For the essence of competition is a contest for trade among business rivals In which some must gain while others lose, to the ultimate benefit of the consuming- public. Sec, e. Balian Ice Cream Co. v. Ardens Farms Co. 104 F. Supp. 796, 801 (S.D. Ca!. 1952). Incidental hardsbips on Individual businessmen in the normal course of comme.rclal events can be checked by a price discrimination statute only at the seri011S risk of stiflng the competitive process Itself.

In some circumstnnces, to be sure, Injury to even a single competitor should bring the Act into play. Predatory price cutting designed to eliminate a smaller business rival, for ample, is a practice which Inevitably frustrates competition by excluding competitors from the market or deliberately impairing their competitive strength." REPORT OF THE ATTORNEY GE ERAL' S KATIOKAL CO)I:MITTEE '1'0 ST"LDY THE ANTITRL'ST LAWS 164-16G (1955).

2. F. C. Docket Ko. 5723 (April 29, 1955), affrmed, Mooy Industries, Inc. v. Federal Trade Commission 238 F. 2d 43 (8th Cir. 1956). C. Docket No. 5723, at 6-8.

1150 FEDERAL TRADE CONIvIISSIO:\ DECISI01\ Initial Decision 60 F.

motive products consisting of thousauds of items, many of which sell for only a few cents. The dealers' fimmcinl life depends on the aggregate of small margins of profits made on a number of individual automotive items. One jobber in Dallas, Texas, ranking third or fourth in that area, testified that his overall net profit on automotive items ran less than 4%. With overall net profit so low, discounts to favored customers, ranging up to 19% could well mean the difference between commercial life and death if these discounts were extended to a suffcient number of items purchased by a distributor. is it controllng that the items herein considered llay constitute only a very small part of t.he dealers ' total sales. . . . Responrlent contends that the evidence in the record does not support the hearing examiner s finding that " the effed of such discrinlinations may be to substantially lessen, injure, def:troy or prevent competition between customers receiving the benefit of said discriminations and customers who do not receive the benefit of such discriminations. .rhis contention appears to be based largely all the fact that respondent' s customers testified generally that they had not been injmed by reason of the higher prices paid by them as compared with prices paid hy tlJeir competitors in the same trading area.

On cross examination, h01\'ever, these saine witnesses admitted that their reasons for so testifying were due to the fact that both they and their c.ompetitors follm\'ed the suggested resale prices of the respondent and that there was no price competition in t.their particular trade areas. The adherence by respondent's customers to its suggested resale prices docs not eliminate the question of injury to competition. As the Supreme Court said in the Com Products case: 24 But it is asserted that there is no evidence that the allowances e.er were reflected in the purchasers' resale prices. This argument loses sight of the statutory command. As we have said, the statute does not require that the discriminations must in fact have harmed competition, but only that there is a reasonable possibility that they "may" have such effect. We think that it was permissible for the Commission to infer that these discriminatory allowances were a substantial threat to competition. The hearing examiner in his initial decision found that: Any saying or advantage in price obtained by one competitor as against another increases bis margin of profit, permits additional services to be extended to customers, the use of additional sale!mWll, the carrying of larger and more Yaried stocks, and the establishment of branch houses for expansion of the business. "\Vhile price competition among customers "was more or less nonexistent, except in isolated instances, in the areas where testimony was taken the possibilty of price competition is ever present where lower prices to certain competing customers exist. .

In support of the hearing examiner s finding of the requisite statutory injury, there is in the record reliable respectable probative evidence in the form of tes.imony that respondent's 2% discounts for cash were invariably taken by respondent' s customers and that these customers considered this discount essen- Ual t.o the conduct of their business. Additonally, some witnesses testified that in order to exvand their business, it wouid be necessary to hire additional Corn Prodllcf8 Refining CO. Y. Federal TI' ((le Commissioll 324 "C. S. 72G , 742 (1945). !j, .

'IRI-VALLEY PACKING ASSN, 1151 1134 Initial Decision salesmen, handle more lines, and IJroyide additional services to customers which would only be effected through increased profits. We believe that the hearing examiner was justified in concluding that respondent's annual volume rebate plan in price discriminations violative of the Robinson-Patman Act. A number of parallel cases have confirmed this approacll. 5 In FT' uit-vale Oanning Oo, the Commission clearly indicated its present view on the rationale underlying the Robinson-Patman Act in such eases: 27 lhe pattern of respondent' s pricing practices as cstablisl1ed in this proceeding closely parallels those pricing practices uncovered by Uw Commission Chain Store Investigation of 1934. 8 Even casual reference to the legislative history makes it clear that these and similar harmful competitve practices provided the major impetus for the passage of the Robinson-Patman Act of 1936. Indeed, as ,ye view it, the main thrust of the Robinson-Patman Act was to curb the predatory nse of monopoly power by chain stores and mass buyers and to pre- J,erve the place of small business as well as to' protect its competitive position. This record discloses substantial price differentials favoring large chain groups and large wholesalers of a type and character identical to' those we conceive the Robinson-Patman Act was enacted to curb, The testimony af many witnesses called in support of the complaint as above autlned demanstrates the injurious competitive effect of such price diiIerentials. I-laving conclu(led that respomlent' s special defenses were not sustained an the record, there exists nO' sound basis for overturning the initial decision of the hearing examiner. And in E. Edelmann & 00. v, Feder' at Trade C/O'n1n'lssion a court of appeals stated: "

Bnt it must be remembered that in enacting the Habinson-Patman Act. Congress undertook to' strengthen this phase of the Clayton Act which it thought had been too' restrictive in practice by directilJg emphasis to' individual competitive situations rather than competition in general. 30From this recent trend) it can reasonably be concluded that "the tests of cOlnpetitive injury have hardened into rigidit.y. The ' injur:i requirement has evolved into an almost. automatic inference from the differential itself, " with an aba.ndonment of the market P. Soren.wn Mfg. Co., Inc. C. Docket Ko. 6052, at 5-7 (June 29, 1956), affrmed pC;' cui ialn, P. Sorenson .Mfg. Cu., Inc.. Y. PedtTal 1'r(lrle COlnlldssiun 24li F. 2d 687 (D. Cir. 1957) : P. D. Jljg. Co. li' T.C. Docket o. 591:', lit 7-12 (April 26, 195(-), atfnned P. cf D. Mfg. Co. v. Ferleral 1'rule Comm.ission 245 F. 2cl 281 (7th Cir. 1(57), cert. denied 355 U. S. 8S4 (1957) ; Genel.al Poorls Corp. (second ease), F. C. Docket :No. 601S, at 3-4 (Feb. Iii, 1956) ; R. Erlelllwrrn & Co. , F. C. Docket o. 5770, at 3-0 (April 2. 19;);'), a f(innerl, E. Erle7l1w/iJ If Co. Ferlrra./ Trrulc CIJJnmi. ion 2.'9 F. 2d 152 (7th CiJ'. 1956), ccrt. denied 78 S. Ct. 426 (195S); Whitaker Gable GO'lp. C. Docket o. 5722, at 9-10 (April 29, 1(55), a..ftinnerl, Whitakel' Cable Curp. Federal Trade Commission, 239 F. 2d 253, (7th Cir. 1(56).

26 P. C. Docket I'To. 5989 (,une 15, 1(56), 2. Id. . fit 4.

,:S Sen. Doc. No. 7th Cung., 1st Sess.

2'239 F. 2l1, 152, at 155 (7th Cir. 1957), cert. denied 78 S. Ct. 426 (1958). o Rowe Price Differentials and Pj' Od11Ct Differentiation: The Issues Under the Robinoll-P(!tma,n Act 66 YALE L. J. 1 , 18, 20 (1956). 1152 FEDERAL TRADE CO)dMISSIO" DECISIONS Initial Decision 60 F.

analysis concept and adherence to a projection of the "forton Salt case so as to condemn almost any price differential among rival customers as "injurious " per se, particularly as in the within case where the business (i. , grocery business) is highly competitive and the mark up and margin of profit is small.

Counsel for respondent also points out t.hat st.atements of counsel on the record clearly show that there is no _issue as to whether the effect of the alleged discriminations in price had, or may have, the prohibitive effect on the first or prinlary line of competition. This is essentially correct. Counsel for the Comnlissioll has asserteel that the theory of the Comnlission s case is premised on secondal' l1ine competition or at tile customer level under the concept enunciated in the 11100g Indust'i'ies case 8'Upra.

Respondent further contends that t,here is no evidence in the record showing respondent sold its products to some of its wholesale customers at higher price than it sold its products of like grade and quality to other wholesale customers who were competitively engaged in the resa.1e of said products. To the contntry, the evidence establishes that this position is without merit. As expressed by counsel supporting the cOlnplaint, the case in chief proceeded on the theory that if A , B, and C owned, operated or senriced retail grocery storos located in the same trade area of distribution, such as a metropolitan area, and goods of like grade and quality were purchased by A, B and C and distributed to those retail grocery stores to be purchased simultaneously by consumers in the same trade area., then A, B, and C are in competition in the distribution and sale of products. (See a. v. F1'uitvale Docket No. 5989, 1956. The conce.pt with rega.rd to competition among respondent' s wholesale customers and injury thereto as enunciated in the FJ'uihJale case is equal.lly applicable in the within case. The discrimination in price herein shown must be considered in the light of the fact that the grocery business which furnishes the ouHet for respondent's products is highly competitive. The evidence discloses that competition in such business is so keen that the 1nark-l1p on so-called fast moving items such as canned fruits or vegetables, is very small, sometimes as low as 2 or 3%. A very small difference in price, therefore, is suffcient to divert business from one seller to another, resulting in injury to competition. This issue, therefore, as to whether the effect of the alleged discrimination had, or may have, the prescribed effect on competition between respondent' s wholesale customers cannot be disposed as arbitrarily as respondent would seem to suggest. TRI-VALLEY PACKn.. G ASSN. 1153 1134 Initial Decision As regards respondent s separate defenses set forth in its answer, no evidence was introduced supporting cost justification and, in fact counsel for respondent indicated on the record that he was not going to burden the record with the issue raised by this defense. Regarding market fluctuation, it is to be observed that Appendices A- , herein contain many instances where the non-favored purchaser paid higher prices both before and after the favored purchaser s transaction. The respondents position as asserted in his second defense that the different prices, if any, charged by the respondent to its purchasers competing jn the resale of its goods of like grade and quality were in response to changing conditions affecting the market for or the marketability of said goods appears to be uutenable. As a third and separate defense, respondent also urges that the lower prices, if any, charged by respondent to any purchaser or purchasers ,were ma,de in good faith to nleet the equally 10\'/ price of a competitor or competitors. This defense to a price discrimination charge under Section 2 (a) is contained in Section 2 (b) of the amended Clayton Act 32 and .is based on meeting competition in good faith. The scope and legal effect of this defense were construed by the Supreme Court in Standard Oil Co. of Indiana v. Federal Trade C01nr'ission. In its original decision, the Federal Trade Commission had held that the defense was available only to rebut a prima facie case established by a showing of price differentials without additional proof of competitive injury.34 The Supreme Conrt, however rejected this interpretation and construed the proviso as authorizing an "absolute" or complete defense irrespective of Commission findings s to competitive injury.

Despite this controversial holding, the defense has been rather unsuccessful." The subsequent history of the Standard Oil (Indiana) case and certain problems arising therefrom have rcently been considered in Standard Oil Co. v. Brown: See Appendix A under Product: Choice Heavy Halves 'Cnpeeled Apricots 24/2% and Appenrlix under Product: Choice Heavy Syrup Halves Pears 24/303. 03 It reads:

That nothing herein contained shall prevent a seller rehutting the prima Jane case thus made by showjng that his lower price or the furnishing of services or facilties to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilties furnished by a competitor. (Emphasis suppUed. 1340 U. S. 231 (1951). See also Pederal Trade Commission v. A. E. Staley MJg. Co., 324 U. S. 746 (1945).

11141 F. C. 263 (1945).

30 340 U. S. 231 , 247, 251 (1951). Cf. McGee Price Discrimination and Competitive Effect: The Standard Oil oj Indiana Case 23 U. CHI. L. REV. 3-98 (1956). 1! Kintner, Revitaliocd Federal Trade OommiSi!ion: A Two-Year Evaluation 30 N.Y. L. REV. 1143, 1165-1168 (1955).

m 238 F. 2d 54, at 57-58 (5th Cir. 1956).

, 1154 FEDERAL TRADE COM1vnSSIO T DECISIONS Initial Decisioll GO F.

'1' 11e Supreme Court returned the case to the Federal 'Trade Commission to make its findings as to whether the Standard Oil Company had proven itself to come within 2(b). The Commission reviewed the matter and failed to give full effect to the Supreme Comt' s Opilliouas to the availabilty of lb) rclicf and the case was again appealed to the Court of AIJpeals for the 7tll Circuit. That Court reversed the decision of the Commission Sg and there, for the first time. discussed tbe use of the word "lawful" in connection ,yitl " equally 10\"e1' prices. As to this matter the court said:

It is interesting and highly significant that the statute employes the language made in good faith to meet an equally low price of a competitor,' but that the Supreme Court in the instant case adds the .word 'lawful ' so that is reads made in good faith to meet a lawful and equally low price of a cOllpetitOl ' 340 C. at pages 238 and 246. .We do not kno\v, of course, why the Supreme Court addea the word 'lawful ' but we strongly suspect that it was for the purpose of giving emphasis to its previous decisions that a 'good faith' defense was not available to a seller who had met an unlawful price. In this connection, it is also pertinent to note that in the instant situation there is no finding, no contention, not even a suspicion but that the competing prices ,,-which petitionei" met were lawful. 233 F. 2d 649, 653.

However, to us it appears that the Supreme Court may have used the ",,ord la\vful' merely because it was dealing with a case in which the facts showed that an equally low price had been met and the record was silent, as to whether such competitor s price \vas ilegal; the Conrt, under tIlese clJ"culIstances, merelytook the case as it stood and referred to the competitor s equally low prices as lawfnI' because there was nothing in the record to indicate that they were not lawful. The use of the word was not to establish a standard that must be met; it was rather a description of the facts presented jn that case. Here, as in the Standa1 d Oil case quoted from above, there is 'no finding, no contention, and not even a suspicion (in the record) but that the competing prices which petitioner met were lawful.' Appellee here contends that there is a burden on tile seller to Prove that the competing price was lawful. There is certainly no auUlOrity for this in either the Supreme Court or later Court of Appeals opinions in the case referred to at such length. The most, it seems to us, that could be m.'de ant of the use by the Supreme Court of the word ' Ia \vful' is that if the seller discriminates in price to meet prices that he knows to be ilegal 01' t.hat are of such a nature as are inherently ilegal, as was the basing poiIJt pricing system in the Staley case 8ulwa there is a failure to prove the 'good faith' requirement in 2(b). There is nowhere a suggestion that the seller Ilu t carry t.he burden of proving t.he actual legality of the sales of its competitors in order to come within the protection of the proviso. However, it is fundamental that the seller who seeks to rely upon a 2 (b) defense bears the burden of establishing the defense, after the Commission has established a prima fac.ie case. The present stat.us of the Inw appears t.o indicate that the defense is applic Lble only .when discrilninatory prices are made to meet inclivlc1ual competitive situations CF. O. v. A. E. Staley Mfg. Co. 324 U. S. 746 (1945); O. q9 1 C. 923 953-955 (19G3).

233 P. 2d 649 (7th Cir. 1956), 011inn6(/' 78 S. Ct. 360 (1958 TRI-VALLEY PACKING ASS):. 1155 1134 Initial Decision StCLndCLrd Oil Co. 355 U.S. 896 (1958) J that good faith is not present where a seller adopts the discriminatory pricing systmn of a competitor (P. C. Y. A. E. Staley Jffg. Co., supm; P. C. v. Standard Oil Co. supmJ ; that the defense is not available to justify particular lower prices on the basis of an inherently disc.riminatory system of pricing (P. C. v. A. E. Staley l1fg. Co. supm; P. C. v. Cement Imtitute 888 1JS. 688 (1948) ; C. v. National Lead Co. 352 U. 419 (1957) J; that good faith meeting of an equally low price of a competitor means an equally low price of a given quantity (F. C. Standanl Brands, Inc. 189 F. 2el 510 (2el Cir. 1951) J that in naming a lower discriminatory pric.e the seller mllst have reasonable grounds for belief as to the existence of the cOlnpetitor s price and what that price is (P. C. v. A. E. Staley l1!.g. Co. 8upmJ ; that good faith is not present 'where the seller acts on unsupported, unverified ,-erbal statements (P. C. V. A. E. Staley l1fg. Co. , supraL- anel that good faith is not present if the seller knew or had reason to know that the com pebtor s price was illegal, or if it was inherently il1legal (Standard Oil Co. v. BTOicn 238 F. 2d 54 (5th Cir. 1956); C. v. A. E. Staley Mfg. Co. , supm; Automatic Canteen Co. v. 346 U.S. 61 (1953)J. Application of the foregoing concepts which must be considered in evaluating the validity of the respondent's 2 (b) defense indicates an insuffciency of evidence to sllceessfully establish such a. defense. Of paTtieula.r significance is the absence of evidence suffciently establishing that the discriminatory prices were to meet individual competitive situations and the presence of evidence indicating respondent's pricing system in eerta-in instnnces was inherently illegal. ,With regard to one phase of respondent s discriminatory practices testimony of tJ1e witness Snyder indicated that there were two "market prices" in respondents business; one price represented by the " market price" to all large chain buyers having representatives on California St.reet in San Franeisco, and another "market price" which applied to all other buyers not represented on California Street. The latter market price was the "list price" demonstrated by respondent's exhibits. These respondent s exhibits shmy that while a "Est price ' for a particular commoclity extended to the non- favored purchasers, the fnvored pure-hasers were buying at the "market price ' of California Street which was eonsistently a.nd systematically lower than the list price. This "t\"o-market system" ,vit.hin the same trade area does not comply \\'ith the requirement of "meeting a lawful price of a competitor in good faith: since expectably it may be injurious to competition and is inherently illegal.

719-603--64-- , .

Initial Decision 60 F.

The 2 (b) defense as the cited cases indicate was established to meet individual competitive situations, that is, to depart from a lawful pricing system to meet an individual threat to busine."s from a competitor on a shipment of fL given quantity and for a particular price on a spe.cific commodity. Respondent c.anuot under' Section 2(a) engage in a discriminatory tivo market price system, which by its nature systematically injures or may injure competition between the n011favored and fa,voted purchase-rs. Such an inherently illegal system has no relation to mee6ng an individual competitive situation. Tn regard to viohtions by the respondent of Section 2(d) of the amended Clayton Act (15 U. C. Sec. 13) " the evidence establishes specific instances in which the respondent made allowances to its cust.omers for services or facilities furnished by the customer in connec tion "ith the offering Tor sale of respondent's products. The evidence further establishes that such payments were not made available on proporriona.lly equal terms to all other customers of respondent competing in the distribution of these products. Injury to competition was not spe.cficnUy proved as a result of these acts. However, in a 2 (d) case proof of injury to competition is not essential. (F. C. Simplicity Pattern Co. 360 U. S. 55; United Cigar Whelan Stores Corp. v. Weinreich Co. 107 F. Supp. 80, 01, 1952. ) Proof that competition did exist behveen the customers involved is a requirement and has been established. (See Atalanta v. 258 F. 2d 365 , 1058. It would appear that the defense of meeting competition may not be interposed under Section 2(d), as enunciated in Henry Rosenfeld , 1956 and C. v. Ex- Inc., et aI. , Docket No. 6212, F. June 21 Docket No. 6966, Oct. 31, 1960. Nevertheless fJ1d8ite Form Brassiere the evidence itself is insuffciently supportive of such a defense. Clearly the evidence reflects the Fred Meyer transaction and the Cent.ral Grocers transaction were arrangements negotiated with the customer on the customer s terms as opposed to extending advertising funds for services established by the seller of manufacturer. The resulting pa.yments were allowances for services or facilities which were not "available" on proportionally equal terms or on any terms to customers competing in the distribution of the products since they involved separate and individual arrangements, which are surely within the proscriptiou of the statute. Such individualized and preferential treatment was the very thing Section 2(d) was designed o Tbe,se charges are thof;e encompassed by the complaint issued under Docket Ko. 7496 which was made a part of' the hearing i.n Docket No. 7225. Prior dlscllsslon rele.tes the Issues encompassed by the complaint Issued under Docket No. 7225. TRI-VALLEY PACKING ASSN. 1157 Il' Initial Decision to prevent (Ohestnut Farm-Ohevy Ohae Daily, C. Docket . 6465, May 21 1957).

CONCLUSIONS 1. The Federal Trade Commission has jurisdiction or the acts and pract.ices or the respondent in this proceeding. 2. Respondent has violated Section 2 (a) of thc amended Clayton Act, as hereinbefore set forth.

3. Respondent has violated Section 2(d) of the amended Clayton Act, as hereinbefore set forth.

It is concluded that this proceeding is in the pubiic interest and that the following order shall issue:

ORDER It is oi'dated That respondent Tri-Valley Packing Association, a corporation: rmc1 its offcers, representatives, agents ancl employees directly or through any corpol'nto or other device in, or in connection \'ith, the sale or food products in commerce, as "commerce" is cle fined in the amended Clayton Act, do rorthwith cease and clesist rrom: 1. Discriminating, directly or indirectly, in the price or such products of like grade and quality by selling to any purchaser at net prices higher than the net prices charged to any other purchaser who, in ract, competes in the resale and distribution or respondent' products "With the purchaser paying the higher price; and 2. Paying, or contracting for the payment of, anything of value to or for the benefit of, any customer or respondent as cOlnpensation or in consideration for any services or facilities furnished by or through such customer in connection with the offering for sale, sale or distribution of any of respondent's products unless such payment or consideration is offered or othenvise affrmatively made available on proportionally equal terms to all other customers competing in the distribution and resale of such products with the favored custon1er.

I t is further ordered That the allegations of a substantial lessening of competition or tendency to"Ward monopoly in the line of commerce in which the respondent is engaged be dismissed since the evidence docs not establish that the acts of thc respondent have impaired or may impair primary line competition (i. , at the seller level).

__ g, 1158 FEDERAL TRADE COMMISSION DECISIOXS Appendix 60 F.

Api'EXDlxA TRADE A.REA: PORTL-IKD, QREnOX NUil- I Pcrcfnt Date Buyer ber of Price ofdis- I InvokeNo. cases I I Di" criminr\" tion I i'ltla1 Pro(luct. Std . Ligllt S)Tl1p Halves Unpeeled Apricots 24/;j03 OX3L_ 19-24- 24-18 I Fred Meyer, Inc__ ! 1.725 dozen. 125' 11-27-571 11-27- Regent Canfood (Safe- , :1.10--_ way). Product: :Fancy Leaf Spinach 2412).

CX3L-- 1-8- 1--- -- FredRe elltMeyer,Canfoodrnc._(safe- 1503. 50m_m-35- 12-19-5/\:- way). Product: Choice Heavy Syrup llalvcs Unpeeled Apricots 4S(8 CX3L_ 172769 Re!,cnt Cunfood (Safe- : 100 15-- 1-- Hudson House, rne i 1-13124 11.20_ 1---- Product: Choice Heavy Halves Un peeled Apricots 24/2Y. I,. 15_ 045CX3L 11- 11- nUdSOD Rouse, Incu_ 12- 12--8 Fred Meyer, Inc- 5005. 70- 12- 12--9 500 5. 70--- 57' j- Hu- lio se; r 606. 15-- 45T- ::: I Arra:-DlX B TRADE AREA: ROSTO fass.

",Uil- I bcr of Price I DHYer- III crimin,1-Percentofdis- cases ex No. Date lnvoiccNo. 'i Buyer I entilil I tion Product: Choice Heavy Syrup Sliced Y. C. Peaches 24/303 350 : 5-16-58 .FirstKat:ionalStores-- cX3L- 16-58 25- Central GrocerYm_ 1O-51i 2&-33 Product: Choice Heayy Syrup TIalves Y, e. Peacbes 24/303 ex 35-- 18-29- 11-075 25-171 iI FirstCentralKationGrocerY-l StoresU"- 650' 5U - "Product: Choice Heavy Syrup Halves Pears 241303 ex 35- 29- 11-075 ' Central Grocery-_ 401 22- 28--6l A & P__ n_. 751 la-Ii- g I: 1-1- 6=2 - (;en (lrocei.;' idl--- :g:::::: ;,; ____ \ + 'l' RI-VALLEY PACKI G ASSN. 1159 1134 Appendix Appendix B-ConUnued TRADE AREA: BOSTON, IASS. C()ntiDued eno. Date I-o.Oi" Buyer Numb".of cases Price DiIer-cntm! !percentofdiscrimii nation product: Choice ITeavy Syrup Halves Pears 48(8 ex 35- 10-17- 25-.095 A & p 125! 301- 11-11- 10- 9--45 , CentralOrocery--_-- 201 Product: Choice IIeavy Syrup Halves Pears CX3. 22- 28-069 ! A & P---- 150 11-11- 10- 9-46 , Central Grocery_----__u i-- I'product: Corina Fancy Tomato Paste 96/6 ex 4, 3400 I A&Pnn 350 15- 373!J , Standard Grocerv 150 1---- 35- : ApPEKDIXES C , D , A.:'D E 'TRADE AREA: PORTLAND , !tADIE Num- Date Invoice Buyer ber of Price Differ- ofdis- Xo. eases ential I enmma-Percent tion Product: Choice Heavy Syrup Sliced Y C. Peaches 24j303 10-31-61ex 46--_ 111-14-';7 45--- 1------ 11- 4-':7 10-24--6 iOid i,-, c;;----- 70 3.601 I fl" ::1 1 4. product: Choice Heavy Syrup Sliced Y . Peacbes 24/2H CX46-oo 11-14-57 I 14.90_ 11- ,;71 fo;ci-Bro- 302 Product: Cboiec neavy Syrup Halves Y. C. Peaches 24(303 CX46-m. 11-14-57 3.40.. 11- iOidiJ;;, c;;: 503.5,53 I I'' 1 0. product: Choice Heavy Syrup Sliced Y. C. Peacbes 48j8 vs. 24/8 4 CX36_m 150 1.125dozen 11- diJ ;';::c;; 20dozen_ 062i 9- !Ei! ! 100 20 dOZCll- - 052 ::: I Product: Choice Heavy Syrup Sliced Y. C. Peaches 24(303 CX3L_ 29-0571 IIallaford Bros. Co-- 'i- J9-58 25-1761 A el 1' 50- 22- Z9-D55 Hanne.rord Bros. COoo--- 65- 11-11- 10-21-029 do-- 85- ::=1 10, Srefootllotes atcndof table, p. 1160.

! _ :::::.. _ _ __,:_ ::::::: _ . . 1160 FEDERAL TRADE COM.'IISSIOK DECISIONS Appendi 60 F.

ApPENDIXES C, D. AND E-Continued TRADE AREA: PORTLAND IAINF..continued Xumex No. Date Inv"" Buyer ber of Price Differ- oidis- No. cases ential I cnmina-Percent tion Product; Choice Heavy Syrup Sliced Y, C. Peaches 24!2h CX3L_-- 9-17- 805.20_---- 9-19- &t! 225 5.1O- 9-22- 29--65 lIaIUaford Bros. 00 501.5.20------- !lZ-17--45 dO-- 120 60_----_ i-- 15. Product: Choice Heavy Syrup Halves Y. C. Peaches 24/30. OX36- 9-2- 5013.65--__--- 1-iHH- := i 13.50------ 9-22- ' - - -- - n 35\ 10, 1- 6- i Itii:;: 11I coco 20 3.85 Product; Choice Heavy Syrup Halves Y. C. l'eacbes 24/2) ex 37u_-- 17-58 i 8- 9-57 IIa aford Bros. 00- 5015.20__ 19-58 :'5- 176 A&P__ _n-- 15015.10___ 22- 8 8- 55 Hannaford Bros. CO 20------ io 1l-1l-.:s 21-029 dL--___-- 305.60_ Produd: CJlOice Heavy Syrup Halves Pears 24/303 CX3L_- 9-22- 60- n__nn____ 9-26- = ;=3? gnt! 20_ 9-29- 9- 3-032 Ha=aford Bros. CO- 60______-- 10-2h58 20_--_ ----n----__-- 11l-1h'\8 r.. ford Bros 60-.__ i ria Product: Choice Heavy Syrup Halves Pears 24/2 ex 37--_ ' 9-22- = 3 31 Daford Bros. Co---- i !J-26- 9 4078 A & P- --m- L::::: 29-58 9- 3-032 i HaDDaford Bros. 00--- 30 7.00------ - 1. 1 HX 3(t) indicates 0.0372/case freight allowanco was given on this shipment altbougb A & P shipment is not clear on freight allowance; but see inventory number 10-3-66 dated 10-22-57 for 3 eases of same at 60-no freight allowance gmnted sbowing clear cut 4. 2% differential; 2 RX 3(g) indicatesOAO!case "count and recount" allowance was given on this shipment; hut see jnverttory number12-17-19 uate(112-27-57 for30 cases otsameon whicb nQ count and recount was granted; demonstrating undisputed 7.5% differentiliJ;

3 RX 3(e) indicates 0. 0372/case freight allowance was given on this sbipment; but see 10-22-57 inventory number 10- 6 wbere Hannaford purchased 30 cases of same at 3. 55, no freigbt allowance granted sbowing clear cut 2% differential;

i See presentation on EX 3(80) on justin5ablecost savings on 48)8. ! This 0.013 computes half of tbe clifferentiaJ set by respondent on RX 3(a) subtracted from 0,075, t1Jeinitial pricedifferentiaJ. i Includes O.OS/case special JJandling cbarge. j ...

TRI-YALLEY PACKING ASSN, 1161 1134 Appendix Appe:SDIXES F , G , AKD H TRADE AREA: EAST HARTFORD, WATERBCRY, COI'N. KUJJex Date Invoice Buyer ber of rice Differ- I Percentafdis- No. cases ential I enrojns- I tion Product: Choice Heavy Syrup Halves 1'. C. Peaches 24!2H 28- 64 400 27- 1"irstXationfiIStores--ex 45--- I 8- 125 15. lnm-- I 8-26- 49 John B01:WtO & 8nns- 9-25r (J.

Product: Choice Heavy Symp Sliced Y. C. Peaches 2412). ex 45-- 27- 28- 64 'I First NatiOllH.1Storcsnn 725 20- 26- 49 John Boz,zuto & SODS._ 125\ 15. 0"- 1"'- Product: Choice Heavy Syrup SHced Y. C. Pcnchcs 24/303 ex 45_-- !!57 I 7939 500 19- 2984 John Bozzuto & SODSu- 150 33. o30 I First Kational 8stores_--- Product: Fancy Spinach 24(303 ex 45_-- 18- 10-15- t Xational Stores_ 110-1G-17- 10-7- John Bozzuto & SODS-- 12. oiiln I Fir Product: :Fancy Spinach 24/2l1 CX 45_ 10-18- I5- 15 1"irstXationaIStorcs_--_ 200i ioi-_ 10-17- 1G-7- John Bozwto & sons_ '2. flu Product: Cocktail Choice Heavy Syrup 24/2 HX 5(g)- ! 8-28- 61 I First Kational swres._ 1125 001- 10-19- ISO 20' 110- 7- 73 1 JOlm Bozzuto & SOTI-- Product: Choice Heavy Syrup Halves Y. C. Peflches 2412 ex 38 112-12- Ill ()079 Og4 A&1'_John Bozzuto & SODS- 375 40 - -i--m I 2- 6-5!! I 1 - Product: Choice Heavy Symp Sliced Y. C. Peaches 24/303 eX3L--- 58 1 7-7-002 John Bozzuto &: Sons- 100 10- 21-110 First NiitioDlll storcsn_ 270 J:: 1 lD- --- 4 , John Bozzuto &: Sons- 100 19-58 8-25-138 100 65 . j2- 59 H9-0:j8 .'\l 1 26-Q77 - :C& 120, Product: Fancy Leaf SpjDach 2412 CX3Ln 5-!!58 5-9- 6-19- 16-41 Bozzuto &sons==:: O. : J3-S81 24-044 A&: P 20 m 12- 11-24-094 ! 9. I JohnBozwto&Sons_ See footnotes at end of table, p. 1162.

. ___ , 1162 FEDERAL TRADE COMMISSION DECISIO='S Appendix GO F.'l' ApPESlJXES :1: G, AND H-CouUuuecl Ttt..\DE AREA; EAST HAP.Tl-' ORD, WATERHIJIY , CO:"s. Continued NUil- CXXo. Date Invoice I Buyer berof Price DiITer- I Perrentof dls- No. ca.ses ential cnmina. tiOD Product. Fancy Leaf Spinach 24(303 CX3L_ 7-li-002 761 016 13- 24-04 60' ;:gl 58 , 11-24--94 John Bozzuto & Sans-- I IH2- Prod.uct: .Fancy 26 Tomato PaEte !)6/6 ex 38_ 10-13- 12--75 A&P._ _--n 320 m-- 12-l'- 11-24-094 John Bozzuto & Sons 200 2.'; ij, 1-3-5\J 12-23- A& Pn_--_ 240 00 19-038 i John Bozzuto & Sons. 3DO \ Claim made on RX 5(1') for O.lO(case promotional allowance or net differentia! of 0. 20 or about 40/. differential; but see RX 5(c) for purchase by Bozzuto oisame on Invoice No. 10- 73 dated 10-19-5iof 100c(\scs at 5.20 for unrebutted 5.8% differential. 2 Claim made on RX 5(e,) for O. IO/case promotional.l allowance or net differential of 0.20 or about 4% di!. fercntial; but see RX ,i(f for purchase by Bozmto ofsilme goods on Invoice No. lO- 73 dated 10-1\1-57 of20Q difflerential. for umebuttec1 5. 7%cases at 5, 30 11 Claim promotional allowance or net (lItlcrcntial of 0. 10 or about 8o/v but made on RX 5(e) for D. lO/case see RX 5(e) for purchase by Bozzuto of same goods on Invojce lo-i-73 dated IQ-19-5i for i5cases at 3. differential.for unrebutted 5.6% j Unrebutted by RX 5(a); in fact, HX promotional5('1) shows jClterallowancepurch3.se, or 0. 10on priceInvoicedifercntialO. 12-19-16On dated2.10 net1- 13-price differential with 0.10showing 0,20 price or about 5% differential.

! UnrcblJtte(\ by RX 5(b).

\) () ; ,,__ _ _ _. :: TRI-VALLEY PACKING ASSN. 1163 1134 Appendix APFEXDIXES I A-"U J TR.JDE AREA: PITTSBURGH, FA.

um- I Percent. CXNo. Date Invoice Buyer ber of Price Differ- No. cases ential criI!linatlon I of dj, Product: Choice Heavy SYTUP Halves Y. C. Peaches 24/303 CX4Ln -111-16- 11- sate d Groc in(' 100 5,; 11- 1- 13-18! Spiegel Bros 11- 30-')') I SturMukets 10-10- 9- 3-44 i \\". E. Osborn CO-- --H Product: Choice Hcavy Syrup Halves Y. C. Peaches 24/2 CX4L-- 11-16- 11- 125 11- 19- :'"i;;J o;oce;;: lou 10-10- (J-23- Gener.1J GroceryCo-- 11- 13- Spiegel Bros-- ---_u. 10-10-.57 3--4 W. E. Osborn Co-- Pro(luct: Fancy Spilli Ch24/2H ex 49 13- A & P-- Pittsburgh McrcantjJe- 23- 22- Spiegel Bros !J. Product: Choice Heavy Syrup Sliced Y. C. Peaches 24/2 CX4Ln 11-15- 11- A & P_ 10-10- 23-381 General Grocery Co_ 10-10-571 3-- w. E. Osborn Co_ i.'i 11- 1-j7 9..13-18 Spiegel Bros-- 100 product: Choice Heavy Syrup Halves Unpeeled Aprieots 24/2H CX4L.m 13- 10-10- \1-23- ri' ;"J Ci, ;Yco::: iJ L_- Product: FaIlcy Spinach 24/303 ex 49_ 13-57 A & P-- 10-5- Pittsburgh Mereantic- . L'i O:H-j 11- 13. 18 23- 22- 100 15. 10-10- W. E. Osborn Co_-- Product: Choice Heavy Syrup Sliced Y. C. Peaches 24/303 CX49--- 11-15-57 11- A & P.-- 10-10- 3--4 \-V. E. Osborn Co_ oi; 11- 13- Spiegel Bros 100 II- 30- Star Mf!rkets__ Product: Choice Heavy Syrup Royal Anne Cherries 24/303 CX3L-- 14-58 2J- Star Markets 151 20-()S.'i A & P-- 40 - 1_- 1 ; : , : . , ,: ::.. ),, 1164 FEDERAL TRADE COMMISSIO DECISIOKS Appendix 60 F.

ApPENDIXES K , A:-D TRADE ARE .!: NEW YORK CITY-XEW JTRSEY KUU1ex No. Date Invoice Buyer berof Price Differ- I Percentafdis- ential tion ICrimina- Product: Choice Heavy Syrup Halves Y. C. I'eachcs 24/2)1 CX4Lu_- 9-18-571 8-22- A & P, Paterson, N.J-- 9-23-571 14- W,lk'y Ow,",y Co. 5. - 6 30 - 1-- - Jersey City. 9-11-7 2&-' Middendorf & Rohrs 100: 1 15. 1--- XYC.

, I Product: Choice Heavy Syrup Sliced Y. C. Peaches 48/8 CX4L--_- 9-18-57' 22- . Potmon NLul 9-23- 14- \Yalkay Grocery Co., g I Jersey Clty.

9-11- 25-3 I Al\1iddendorf& p & Rohrs, 150 KYC. 8-27- 8-5-50 , East 150 Paterson, J\ I Grand Union Co.

Product: Choice Heavy Syrup Sliced Y. C. Peaches 24(303 CX4L-- J 9-18- 22-32 I A &' P, Paterson L-- 9-23- 8-14- 7 Walkay Grocery Co. 026 26-3 , .NJddendorfJersey City.& Robrs 100 130 ! NYC.

I : 8- ,'J0 Grand Union Co., East 800 Paterson Product: Standard Light Syrup Halves Unpeeled Apricots 24(2Y. CX4L 9-18- paterson J-i I 9-10-57 packard Bamberger Co. 026 1 t Hackensack, :1.J. Product: Standard Light Syrup Halves Y. C. Peaches 24(2H CX4L_ 9-18-,:1 22-32 _\ & P , paterson, N..L--- 10-12-", I 9-26-70 ' Packard Bamberger ITackensack 8- 5-60 Grand "(union Co., East 100 Paterson, N.J. ::1 Product. Standard Light Syrup Sliced Y. C. Peaches 24/2H CX4L_--- 9-18-,;7 22- 0. & P , Paterson, N. 125 10-12- 9-" 6-70 Packard Bamberger 35-1 Hackensack, N. Product: CoriD:1 Fancy Tomato Paste 96/6 CX4Jnm 22- 3855 \& P , na"'thorne 2'- 5-D51 , ?\liddleses Foods, J\ew IDO 3.'j: ns\\lCk, N.J. See footnotes at end of table, p. 1166.

.._ ) , __. . TRI-VALLEY PACKING ASSN. 1165 1134 Appendix Al'PE;:DIXES K , L , N, ,\.m O-.ontinued TRADE AREA: r;w YORK CITY.NEW JF;RSEY-Continued "urn. Percent CXKo. Date In\'once Buyer ber of Price Differ- ofdis- No. cases ential criminaltion Product: Choice Heavy Syrup Bartlett Pears 24/2Y. ex 42--_-- 2- 946 I Regent Canfood, Kear- 80 ---------i 2-19-57 i 3- 1669 i-- ------n- , 3- 8-57 1878 ' "\Vakefern Foods Corp., 1,000 Cranford, N.

1874 \Yakcfern Foods, Cran- 000 ford Product: Choice Heavy Syrup Halves Y. C. Peaches 24(303 ex 42-- 2-14-57 856 I Regent Canfood Co., I 225 !nmmn nnnnn Kearney, 2-19-57 349 Grand UDion X.J. Co., :East 150 4. ! Paterson, N. 1 0.15 Product: Choice IIcavy Syrup Halves 'Unpeeled Apricots 48/8 CX 42_-- 19-57 946 RcgeDt Canfood Co" ::: nm Keamey, 19-57 349 Grand "Lnion Co.. East 100 lmm. 26- 1122 ,--- Product: Standard Light Syrup Halves Y. C. Peaches 24!2H ex 42_ 26-571 1527 Regent CaDfood Co., lsa Kearney, 19-67 349 Grand Union Co. , East 100 ::1:1-- Paterson, N. 125 ;;; I" 26- 1122 donu Product: Choice Heavy Syrup Halves Unpeeled Apricots 48(8 CX 42- 12- 4-4046 Regent Canfood :I GrandKearney,Unions.Co., East 130 20 18- 4-4151 24- 4426 100 1- -- Product: Standard Light Syrup Halves Y. C. Peaches 24/2H CX 42 24- 5--422 H',,", C"food Co Ke:!rney, 18- 4151 Omnd l:nio Co., East 175 Paterson, "'.

" I Product: Choice Heavy Syrup Sliced Y.C. Pc aches 48/8 ex 42__ 29- 21-46 Regent Canfood Co., rney. N.J.

17- 14- - CrJ., East 1':0 Paterson, N.J.

I Grand 1.union ::::::; . __ :;:::::::: : ;;; 1166 FEDERAL 'I'HADE CO).1MISSIOI- DECISIONS Appendix 60 F.

Appe DIXES K, L, :.1 A;'D Q-Continued TRADE AREA: :-EW YORK CI1' ",'.EW JERSEY-Continued Xurn- ent Date Invoice Buyer ber of Price Differ- I Pen'of (h Ko. cases ential I criminaltiOIJ Product: Standard Light Syrup Sliced Y, C. Peaches 24/2!:i ex 42_ 28- fi2S-58I Uegent Canfood, Kear- I 350 ney, ;' 17- 14- Grand L"nical Co., East 250 525 45: Paterson, X. i 6- Product: Ctoicc Heavy Syrup Sliced Y C. Peaches 24/303 ex 43- 10- 20- I American Stores, :New- ,' 110- ark.

14- Gm' . J""Y .5. 10-30-6 \V( ;;1 11- 26-43 )Ilddendorf &: Robrs 100 60 . 201 00' . "YC. Product: Choice Ileavy Syrup Sliced Y. C. Peaches 48/8 CX 43-- 10-10- 20-51. American Stores, :\'C\\- 125 ark.

23- 14- \Valkay Grocery, Jersey I 11-21- 1o-a0-. -- City. :::1 )Vlid(lendorf 11- & RolJrs, 1.';0 26-3, "ye. 10-30-57 10-10-25 Grand Union Co. 15i Hnrherford, K product: Choice Heav ' Syrup Sliced Y. C. Peaches 24/303 CX43-- 11- 8- American Stores, Kear- 200 3. ncy. 1 ::::::; I 10-30- Walby Grocery,Jersey 1.i Clty- Product: Choices Hea.vy Syrup SHced Y C. Peaches 48/8 CX1L_ ! 11-13-57 11- American Stores, Kear- '00 ney.

11-21- 10-30-i \Yalkay Grocery, Jersey City.

10-30-57 10-10- Grand Union, East' 15, RX12(d)-- , 11-22- 11-11i -_ Produd: Choices Heavy Syrup Halves Unpeeled Apricots 48/8 ex"---- 11115' 8-22- American Stores, :\ewfree ark.

12(a)J 1 1 8-27- Grand Union East ::1 0101 lat8fsOIl. Product: Choices Heavy Syrup Sliced Y. C. Pcaches 48/8 RX 12(d)- 10- 9-20-541 A ican Stores, Kew- 125 10 : 10-3J-57 I 1(1- 24 Grand Union, East 15 1. 70 0. tL,' 1 Paterson.

1 Respondent argues that these peaches carne under RX 14 o-e; but if so, only some; and if so, to no other 1jddendorf tmnsactlOn; only 2Y. cbOlce peach- _ _:: ;;; TRI-VALLEY PACKING ASSN. 1167 1134 Appendix ApPEKDIXES P , Q, AXD R TRADE AREA: DENVER-PL'F.IJLO Num- CX.:o. Date Invoice Buyer her of Price DHIcr- I Percentoflliscases entia! tion I criminal- Product: Standard Ljght Syrup Pears 24/2H CX44--.- 15- 779 I Regent Can food Co., I 145 Denver.

I'- IH7 193 AssociatedDenver. Grocer 300 16. 50' 194 16. 50, . 2 2699 16. 27- 2788 I::JL:::::::::::::: 140' 16. Product: Standard Light S:y.up Halves "Cnpecled Apricots 24/2M CX4L lij" 2474 Regent Canfood, Dcnver. 11- 193 Associated Grocers 200 J5. , Deoyer 150 25. T--- 27- 2699 i---do--- Product: Standard Light Syrup Sliced Y, C. Peaches 24/2 ex 11-- .. 3-1iJ51 I 2474 Regent Canfood, Denver 110 , 3-11- 162 " II. A. Marr, Denver-- 321 is-j--product: Choice Heavy Syrup Halves Y. C. Peaches 24(2jcx 4L_--- 313- 2474 Regeut Canfood, Dcn- , 105 20 ivel 11- 162 H. A. Marr, Denver-- Product: Choice Heavy Syrup Sliced Y. C. Peaches 4/2H ex 4L_ 2474 ! Regent Canfood, Den- I 150 I 3-1iJ51 I ver 11- 152 i TI. A. Marr, Deover - - 120 i 3- :::1--- Product: Choice TIeavy Syrup Halves Unpecled Apricots 24/303 ex 44 57 I 2474 Regent Canfood, nen- 21-57: 2882 H.ver. A. ;.Iarr, Denver_ :::1--- ;;1 Product: Choice Heavy Syrup Fruit Cocktail 24/303 3 ex 44--- 27- 4-4- Regent Canfood, Den. 185 1----- ver. - 10- 10-86- Associated Grocers, Pueblo 10-8654 Associated Grocers Av- :::1 ondale.

10- 4-57 10-8655 Associated Grocers, 1'u. eblo.

10- 10-8656 10- 10-8657 - do-- 10- 10-8658 - i: 10- iJ7 10-8659 (10_ 10- 10-86bU 10- JO-86fi1i- Seo footnotes at encl of table, p. 1168.

:::::::::: _ _:::::::::::::::! ::! :;, 1168 FEDERAL TRADE COMMISSION DECISIO:\TS Opinion GO F.

Appe DIxES P, Q, AND R-Continued TIL-\DE .area: DENVER-PUEHLo-Continued I, ;\um-ber of I' Price Differ- I Percentofdl,. CX:'" Date oice Buyer i ential crimins.- tlOll Protluct: Choice Heavy S;syrup Fruit Cocktail 24!2H j ex 44_ 19-27- 9-4-15 Regent Canlood, Den- 90\ 001-vcr.

10- 1O-8tJ3 I A ted Grocers, PU' 3. 10-4-57 10-8654 ! Associated Grocers, A v. 20 . oIldal\'. 10- 10-8555 Associated Grocers, Pu- 201 1G-4- eblo. 151 10- 4- 10-8U.'i8 _ Ao---- 151 111-4-57 20: 0-4 - 4 loi ; I ! I:::::

! Argument regarrJiDg count and recount allowance to Associated Grocers; (see Transcript 884-891;) Only.' on 1,450 of totat 2 240 cases in hrackets on RX 2(a); Consequently, at lea:;t to almost 50';' of these pe if5 the 6.2% price discrunination applied.

2 Argu.llent regarding count ami recount allowance, see HX2(a) and argurnent Tr. 890, !llld under pears above;

Rowenr, RX 2(a) shows:

I Differ- !Perecnto! Date i Invoice,"c. Buyer I Numberof Cases Price I enthll ! discrim- I fnatlOll Regent Canfoo(L_-- 1()3-60 10-17- Grocers_ L"4%, 11-2.'7 , AS50cmted 12- .:: l . On respondents own tabulation; note "List Price" column on RX 2(a) See also nX2((1).

j See also RX2(e).

OPIXIO OF THE COloDIISSIOK By Drxox OOTJl1nis8'ioner:

This matter is before the Commissi.on on the appeal of respondent Tri-Valley Packing Association/ from an initial decision of t.he hearing examiner holding that respondent had violated subsections (a) and (d) of Section 2 of the Clayton Act, as amended, and ordering respondent to cease and desist from the practices found to be uula wfuI. IVe wil consider first respondent s appeal from that part of the initial decision dealing with the charge of unlawful price discrimination. Respondent contends in this connection that the cha.rge has not been sustained by the evidence and further contends that, even if a prima facie case had been proved, it has established that its 10',01' prices to certain purchasers were made in good faith to meet the equally low prices of competitors.

1 Incorrectly named- in the complaint In Docket No. 7225 as Tri-Valley Packing Association, Inc.

, THI-VALLEY PACKING ASSN. 1169 1134 Opinion Respondent is engaged in the business of processing Rnd canning fruits and vegetables which it sees to customers located throughout the 1Jnit.ed States. Its sales of these products are substantial, amounting in the fiscal :year ending January 31, 1959, to $22 329 877. There is no dispute, and the record fully supports the finding, that respondent has discriminated in price in favor of certain large chain stores and against various wholesalers and retailers in the sale of c"nnee! f11Jits "nd vegetables of like grade mod qu"lity. The record also shows that the favored chains, purchasing through their own direct buying agencies in San Francisco, consistently paid lower prices for respondent s goods than wholesalers and retailers, including cooperative organizations, that purchased respondent's goods through brokers. Counsel supporting the complaint has shown numerous instances of such price discriminations throughout various " trade areas where tho favored chains ,were generally engaged in competition with nonfavored reta-ilers and with customers of non favored ,YllOlesalers. In almost every instance where price discriminations have been shown to ha,ve occurred, both the favored and nonfavored customers purchased respondent's products for resale under their own private labels. There is also evidence that these customers also purchased ca,nnecl products from other packers for resale under the same labels. Consequently, respondent's products when received by their customers are usually commingled in the customer s 'Iyarehouse with other products be"ring the customer s label. They are thereafter shipped by the customer, either to its own stores for resale to the public, or, in the case of a wholesaler, to smaller independent retailers for resale to the public.

The principal argument made by re.spondent in this phase of its appeal is that counsel supporting the complaint has failed to prove that the a.aforementioned price discriminations have had the requisite adverse effect on competition. It contends in this connection that neither actual nor probable injury can be found to result from a price discrimination unless it is shoviTn that a.etual competition existed between favored and non favored purchasers in the resale of the specific products involved in the discrimination. To support this flrgun1ent respondent points out that orders to cease and desist issued by the Commission in Section 2 (a) cases ordinarily prohibit a seller from discriminating in price only between purchasers who, in fact compete in the resale and distribution" of the seller s products. Relying primarily on the fact th"t its products lose their identity by being commingled with other products be"ring identic,,1 bbels respondent states that there ha,s been no showing of a single insta.nce 1170 FEDERAL TRADE COl\:UvrISSION DECISIO Opinion 60 F.

where a, retail outlet operated by a nonfavorecl retailer or customer of it nonfavored wholesaler has, in fact, competed with outlets of favored chain stores in the resale of respondent's products of like grade and quality. And respondent further contends that the facts do not support an inference that. such ctnllpetit.ion exists since in any given trade area, as defined by counsel supporting the complaint, there are retail outlets of the favored chains that do not compete with any of the stores of non favored retniJers or cllstome.rs of nonfa\ orccllrholesalers and, in the same trade area, there ate stores of non favored retailers and customers of nonfavored wholesalers that do not compete with any of the outlets of the favored chains. In view of this fact respondent argues that although it is possible that there might be competition in the resale of respondent' s products to the public, it is also possible that there is no competition. Respondent claims, therefore, that since counsel supporting thc complaint has failed to prove real or existing competition in the resale of its products, there can be no finding of actual or probable injury to competition stemming from the price discriminations.

This argument nlUst be rej(' ted. First of aU, we do not agree with respondent that the record does not support a finding that in some instances, at least, the recipients of respondenes discriminatory prices were competing in the resale and distribution of the products involved in such discriminations. The fact that respondents goods cannot be identified on the shelves of individual stores operated by the purchasers does not mean that the purchasers are not competing in in this con-the distribution of such goods. There can be no doubt, nection, that respondent's goods have been purchased for resale under its customers' private labels. Since respondent's goods ha.ve been 11011-commingled with other products, the sho\ving that favored and favored purchasers have, in fact, competed in the sale of these private label goods would be sufficient in some instances to establish that they have competed in the resale of respondent' s goods. But more important, there is no substance to the contention that a violation of Section" (a) must be predieated upon a showing of actlHI or probable injury to competition with the favored customer in the resale of the goods involved in the price discrimination. This coutention confuses the element of price discrimination with the element of competitivo injury and is obviously incorrect. In fl case involving injury to competitors of the seller, for example, there may be no competition whatsoever between the recipie,nts of the discriminatory prices 111001'e v. i1fead' 8 fi'ine B1'ead Co.in the resale of the seller s products. Commission v. knhe,"ser-Busch;,48 u. S. 115 (1954) ; Fede""l Trade TRI-VALLEY PACKI1'' G ASSN. 1171 1134 Opinion Inc. 363 D,S. 536 (1960). Nor is it necessary that such competition In Corn Products Refininqexist in cases involving injury to buyers. Company et al. v. Federal Trade Commission 324 U.S. 726 (1945), there was no competition between purchasers in the resale of the product sold by respondent, since in that case the purchasers ,were using the product involved in the discrimination, glucose, as an ingredient in candy which they manufactured. Nor is it necessary that the goods involved in a price discrimination be resold in any form since the Act specifically states " where such commodities are sold for use, C01l8Urnption or resale. (Italic supplied. J For example, discrimination in the price of gasoline sold to competing taxicab or tI1ck flcets could have the effect of injuring competition with the purchaser receiving the lower price. Or injury could result from the difference in the price of machinery or other equipment sold to competing firms for use in the prod action of other goods, As respondent has pointed out, Commission orders in Section 2 (a) cases ordinarily prohibit a seller from discriminating in price bet,veen purchasers who, in fact, compete in the resale and distribution of the 8el1e1' 8 products. This is due in part to the fact that in most price dicrimination cases coming before us, favored and non favored purchasers have, in fact, been competing in the resale of the sener products. The orders were, therefore, drafted in a form deemed adequate in those factual situations to prohibit discriminations having the requisite effect on competition. The Commission has not always ad- Federal Trade Commission v. jJf or-hered to this form, however. In ton Salt Company, 331 U.S. 37 (1948), for example, there was a factual situation somewhat similar to that involved in this matter in that the respondent had discriminated in price between retailers and wholesalers. The order issued in that case contained a paragraph which prohibited the respondent froln discriminating in the price of products of like grade and quality "By selling such products to any wholesalers whose cus- retailer at prices lower than prices charged (Italic supplied.) This inhibi. tomers compete with such 1'etr"iler. tion was expressly approved by the Supreme Court. In any ease involving the effect of a price discrimination on competition bet\yeen buyers, the requisite injury may be infclTed Il'Oln a showing that a purchaser paid substantially less than its competitor quaJit.y sold by the respondent (Federal for goods of like grade and Trade Oom'1d88ion v. J.1orton Sa.lt Oompany, s1lpra) ; and it has been held that such an inrerence is permissible despite testimony hy the nonfavored pur"haser that he had not been injured by the discriminav. Federal Trade Commission 238 F. 2d tion. 3100g Industries, Inc. 119-603--64-- &) Opinion 60 F.

43 (lU56) ; E. Edelmann Co. v. Federal Trade Commission 239 F. 2d 152 (1956). Whether or not the differential in price is substantial 11111St, of course, be detern1ined from the facts in each case. As stated above, however, it is unnecessary to show that favored and nonfavored purchasers compete in the resale of the goods involved in the discrimination. And if such competition does exist, it is not necessary to show that the price differential was reflected in the price at which the goods were resold by the favored purchaser. Corn Products Refini'n,q OO'npuny, et al. , 81lpra; A/oog lndu.stries, Inc. v. Federal Trade C07nm. -;sion, supra; E. Edehrwnn Co. v. Federall'trade CO'TI/rnisslon, supra.

The record in this case establishes the existence of competition between favored chains and nOllfavored retailers in the sale of food and grocery products, including canned fruits and vegetables sold under each purchaser s private lllbel. It may be true, as emphasized by respondent, that certain retail outlets operated by each of these purchasors did not compete with any outlets operated by the other purchaser. This is wholly irrelevant, however, since it is clear that the purchasers did compete through other outlets. The record also establishes that the differences in the prices charged competing purchasers were substantial. These price differentials ranged from five cents to fifty cents, or from two per cent to ten per cent, per case. H.respondent concedes that the grocery business highly competitive, that markups at various levels of distribution are aJfecte,d by compet.ition, and that the percentage of return on large volume sales is small. The record also discloses that the net profit of some wholesalers does not exceed the customary two and one-half per cent cash discount accorded for prompt payment and that the net profit of certain retailers runs less than six per cent. There is also testing10ny that a price difference of only ten cents a case would be suffcient to cause a purchaser of canned fruit or vegetables to buy from one packer instead of another and that a difference of a cent or two a can could cause the loss of a sale at the retail level. Under these cireumstances, we are of the opinion that the price differentials involved herein were suffcient to give the favored purchasers a substantial competitive advantage over retailers who purchased respondent' s goods at the higher prices.

The record a.lso supports the conclusion that respondent' s price diseriminations may have, the effect of injuring competition behveen the favored cha.ins and retailer eust,omers of nonfavorcc1 wholesalers. Although there is no evidence that any of these independent retailers fletna.lly sold a.ny of respondent's goods, there is a.mple evidence to lri-VALLEY PACKING ASSN. 1173 1:34 Opinion show that some of them sold a wholesaler s line of private label goods in competition with chain stores that had paid less for respondent' goods than had the wholesaler. Since respondent's goods were commingled with others under the wholesaler s private label, the higher price paid by the wholesaler for respondent's goods woulclnecessarily be reflectecl in its cost of acquiring its private label line. In view of the small profit margin at the wholesale level, it may be reasonably inferred that this increased cost would be reflected in thc price at which these products were sold by the wholesaler to its customers. Consequently, in those instances where it is shown that actual COlllpetition with favored chains did exist, we believe there is far more than a "remote possibility" that the competitive opportunities of the independent retailer were substantially injured as a result of the price discriminations.

Hesponclent next contends that the hearing examiner erred in holding that it had failed to justify its discriminatory pricing practices under the "meeting competition" defense contained in the Seeton 2(b) proviso. In order to establish this defense, respondent has the affrmative duty of proving that it reduced its prices to certain customers in good faith to meet the equally low price of a competitor. The Supreme Court in Standard Oil 00. v. Federal Trade Oommission, 340 S. 231 (1951), clear indicated that the lower price which may be met by a seller under the proviso l1lust be a "lawful" price. Certain it is, therefore, that as part of the good faith requirement of this defense, respondent must at least show the existence of circumstances which would lead a reasonable person to believe that thc lower prices it was meeting were lawful prices. This, however, respondent has not done. It has succeeded only in showing that a number of competitors, whose prices it claims to have Inet, had engaged in pricing practices whcreby they had usually sold goods to certlLin fltVored customers at a llarket price" which respondent admits was set by the buyer. The evidence offered by respondent does not indicate whether these prices could be cost justified or otherwise excused under any of the exceptions to the prohibitions of Section 2 (a) or that respondent had reason to believe that they could be justified. IVe are of the opinion, therefore, that respondent has failed to establish the good faith requirement of the "meeting cOlllpetition: defense and its argument on this point is rejected.

Respondent also takes issue ,with the hearing eXrLmlner s holding that it had violated Section 2(d) by granting allowances to certain 2 Stan(/anl Oil 00. v. Brown 238 F. 2,d 54 (5tb Cir. 1956). 1174 FEDERAL TRADE COlYIMISSION DECISIONS Opinion 60 F.

customers -for services rendered by them in connection with the sale of its products without making such allowances available on proportionally equal terms to other customers competing in the distribution of such products. Respondent concedes that it granted allowances to two retailers, Fred Meyer, Inc., and Central Grocers, Inc., but it contends that these allowances had not been granted as compensation or in consideration for merchandising services furnished by such retailers and that the retailers receiving the allowances were not competing with other purchasers in thc distribution of respondent' products.

With respect to the first point, respondent makes the somewhat :fivolous argument that the allowances were used to promote goods sold under the retailers' label and not to promote the sale of goods packed under respondent's label. There is nothing in the langua,ge of Section 2 (d) which indicates that the services or facilities furnished by the purchaser must be in connection with the "processing, handling, sale or offering for sale" of products bearing the seller s label or brand. The language clearly refers to furnishing of such services or facilities with respect to "any products or commodities manufactured, sold, or offered for sale" by the seller. The evidence in this case shows that re.spondent sold to the favored retailers canned goods packed under the retailers' labels and that it granted allowances for merchandising services furnished by such retailers in the resale of these private label goods.

As to respondent' s contention that the recipients of the allowances were not competing with other purchasers in the distribution of respondent' s products, the record shows that canned goods sold by respondent to Fred :Meyer, Inc., and Central Grocers, Inc., were resold by these firms at retail in their respective trade areas in competition with nonfa vored retailers who were selling private label canned goods some of which had been purchased from respondent. Respondent contends, however, that the nonfavored retailers also sold or dist.ributed their private label lines outside of these areas of competition and that it was, therefore, possible that all of respondent's goods bearing the retailers' private labels were sold outside of these areas. In so arguing, respondent is in effect saying that there is some likelihood that hundreds or thousands of items which have been commingled ,with a greater or lesser number .of like it.ems could be segregated by accident or chance. It would not be an overstatement to say that it would be virtually impossible for this to happen once, and respondent would have us believe that it happened on several occasiems. Consequently, we must reject respondent's contention that 'l' RI-VALLEY PACKING ASS1'. 1175 1134 Disscnting Opinion there is insuffcient evidence to support the finding that the aforementioned favored retailers do not compete with other purchasers in the dist.ribution of respondent' s products. Although we arc in general agreement with t.he conclusions reached by the hearing examiner in his initial deeision, we are of the opinion that hc has failed to make adequate findings of fact in support thereof. We are also of the opinion that that part of the hearing examiner order to cease and desist relating to price discrimination is inacle quate in two respects. In view of our holding that respondent's price discriminations may result in injury to competition regardless of whether there is actual competition in the resale and distribution of the products involved in the discriminations, we believe that the phrase in the resale and distribution of respondent' s products" unduly limits the scope of the order and should be deleted therefrom. Furthermore, the order is deficient in that it does not prohibit respondent from selling to retailers at prices lower than prices charged wholesalers whose customers compete with such retailers. The appeal of respondent is denied. The initial decision of the hearing exa.miner is vacated and set aside and we are issuing our own findings, conclusions and order to cease and desist in lieu thereof. Commissioner Elma.n dissented to the decision herein. DISSENTING OPIXIOX By EL:'fax. OOflunis8ione' 1\;fost of the canned fruits and vegetables sold throughout the United States are produced and processed in California. Respondent, a farmer- o\vne(l and operated cooperative ,lssoc.iation, is one of a large number of canners which sellon the so-called " California Street" market. in San Francisco. These canners sell most of their ontput in that market. :Many large buyers, including retail grocery chains wholesalers' groups, and institutional jobbers, mftintain purchasing agents in the California Street. market, and prices there tend to be lower than in other Inarkets.

Trading in the. California. Street market, like other conm10dity exchange, is free, open, anrl actjve, \vlth frequent and sometimes very substantial price fluctuations occurring from one transaction to the next., resulting from the int.era.ction of supply and demand and. other competitive factors. The Commission s opinion suggests, however that the ma.rket is controlled by the large buyers, \which use their purchasing pmver to exact discriminatory and illegal price concessions from sellers there.

\ 1176 FEDERAL TRADE COMMISSION DECISIO",S Dissenting Opinion 60 F.

Respondent is the only seller in the California Street market which lias been charged by t.he Commission with making price discriminations in violation of Section 2(a) of the Robinson-Patman Act. It has asserted as a ctefense that its 10"' 81' prices to buyers in this market were made ill good faith to meet equally low prices of competing sellers. The Commission rejects this defense, finding that respondent "did not adduce evidence to show that it had reason to believe that. the lower prices of its competitors could have been cost justified or otherwise excused under Section 2 (a). Since respondent has failed to prove that it had reason to believe that the prices of its competitors were lawful, it has not established all the record that it acted in good faith in meet.ing such prices. " (Finc1ingof Fac. No. It semTIS to Ine that therf are two main objecbons to the Commission s holding.

First of all, the 10"er prices of its competitors "hidl respondent met were not unlawful under Section 2 meree:' because they were discriminatory. " Under the explicit provisions of the statute, those prices would be illegal only (1) if they had the proscribed effects on competition; (2) if the differences in price were not justified by differences in costs of manufacture, sale, 01' delivery; (3) if the lower prices were not in response to changing conditions affecting the market for or marketability of the goods concerned; and (4) if the lower prices were not offered in good faith to meet the equally Jow prices of competitors, ,Vhere a seller' in an active market meets the Imver prices of other sellers and invokes the meeting-competition in-good-faith defense allowed by Section 2 (b), considerations of elementary fairness, efi'ective administration of the statute, and the realities of a competitive market pl'P.-lnde imposition on him of a heavier burden than showing that he had no reason to suppose that the competitive lower prices he was meeting were lU11awfu1. The law should not be construed as forcing a sellm' to compete Rt his peril. sales manager who is trying to compete * * " is not, of course, required t-o become n detective or a judge. " 1 A businessman ,-dlo must operate-in the pressures of the ma.rlcetpJfl.ce cannot be expected to conduct a survey into his competitor s costs or to prophesy -whether tlw c01llpetitor s lower price will later be held unla,vful. Accordingly, if the statute is not to be made an impec11ment t.o free and fair price competition, the 10'ver price met by ,1, seller in good faith in a competitlye situation should be deemed to 1. Corwin D. Edwards, "The Price Discrimination Law " (1959), p. 567. , , TRI-VALLEY PACKING ASSN. 1177 1134 Dissenting Opinion be Ift\vful if ihe seller shows that he neither knew nor had re,ason to believe that it was unlawful and if no coullter-showing is made of facts known to the seller which would indicate to it reasonable and prudent businessman that the lower price was probably unlawful. There is no evidence here, and the Commission s opinion cites none bearing upon the costs of competing s31Jers. That selling prices in the market were generally less than offering prices and were "satisfactory" to the buyers celiainly does not maIm them ille,gal or show that they were not cost justified. Respondent presented evidence to show that price changes in the market \"cre made in response to changing market conditions, competitive oifel's, inventory considerations and other le,giti1nate e.oonomic factors. The Commission s opinion refers to no specific evidence in rebuttal. Secondly, assmning that this record does show that viobltions of the Robinson-Patman Act arc known to be rampant in the Califonlia Street market, and for that reason respondent cannot rely on the meeting-competition-in-good-faith defense, why is it that, in the four years that have elapsed since this complaint wa.s filed, the Commission has fa.filed to bring price discrimination charges against any of respondent' s competitors or the large buyers which allegedly have induced the wielespread illegal price concessions? The COlTIlnission cannot have it both ways. If the record in this proceeding establishes that sellers in the California Street market are unlawfully discriminating in price, it has not boon explained why, on these same facts, Comlnissian proceedings have been brought only a.against one seller. If, as complaint counsel argues that the record proves respondent obviously knew that the ' California Street' marketing price systenl vms being used by large ret.ail purchasers as a gimmick to obtain favorable treatment" from seners there, then the C0l11mission, which ha,s made this record obviously knew" the same facts.

If this market is indeed "rigged" in favor of large buyers for whose business ma.ny competing sellers lnust sCl'a,mble, the remedy is for the Commission to proceed on a general basis and not to enter an order which would only have the effect of driving a single, relatively small Since the ultimate fact to be determined Is the seHer s subjective good faith vd non, It is neither necessary nor umcient for the Commission to rebut the defense by present- Ing' objectiy!, proof of the ilegality of the competing seller s 10.wer price. Apart from the inconclusiveness of such proof, it would introduce into the proceeding tangential issues t "wDulrl inYDlye trying man:' c ses instl'ad of one; recoros would be g-Rrgantuan, and clarity wellniglj impo",sible. E. Erlelmann d: Go. 51 F. C. 978 , 997 (Initial Decision of Examiner Their).

Findings and Order 60 seller out of t.he market. The very dominat.ion of the market by the large buyers, which the Commission has found, will prevent respondent, and respondent alone, from being able to survive there. It is hard for me to see how such an order could serve the objectives which Congress sought to achieve in passing the Robinson Patman Act. FINDI);GS AS TO THE FACTS , GO:!CLl.SIOXS A:;D \.1RDER * Pursuant to the provisions of an Act of Congress, entitled " Act to suppJmnent existing laws against unlawful restraints and 1110nopolies, and for other purposes " approved October 15, 1914 (the Clayton Act), as amended by the Robinson-Patman Act, approved June 19, 1936 (15 D. , Sec. 13), the Federal Trade Commission on August 6, 1958, issued and subsequently served upon the respondent named in the CfLptioIl hereof its complaint in this proceeding, charging said respondent with having violated subsection (a) of Section 2 of said Clayton Act, as amended. The responc1cnfs answer to said complaint was filed on October 22, 1958. Thereafter, the Commission, pursuant to the provisions of the aforesaid Act, all )la.y 15 1959, issued a.nd subsequently served upon respondent a second complaint, charging respondent with having; violl1.ed subsection (d) of Section 2 of said Act. The respondent' s answer to the second complaint. WfiS filed on June 29 1959. By order of the hearing examiner filed October 2, 1959, the proceedings initiated by the aforesaid complaints were consolidated into one proceeding. I-Iearings were thereafter held before duly designated hem'jug examiners of the Commission and testimony and other evidence in support of and in opposition to the allegations of both complaints were received into the record. an initial decision filed August 4, 19tH , the heating examiner found that, with the exception of one allegation, the c.charges had been sustained by the evidence and ordered respondent to cease and desist from thc practices found to be unlawful.

The. Commission having c.onsic1ered the appea.l of respondent from the initial decision and the entire rc,cord in this proceeding and ha,ving determined that the a.appeal should be denied, and having further dete.rmined that the initia.l decision should be vacated and set aside now' nul-kes this its findings as to t.he facts, conc.usiol1s c1rtnvn therefrom anel order to ('case and desist which, together with the accompanying opinion, shall be in lieu of the findings, conclusions and orde.r contained in the initia.l clceision. Rf'SpODdeDt Tri-VnIJey Packing Association was ir1Correctly named in t!1e complaint in Docket No, 7225 as Tri-Valley Packing Association, Inc. TRI-VALLEY PACKING ASSN'. 1179 1134 Findings and Order FINDI::GS AS TO THE FACTS 1. Respondent, Tri-Valley Packing Association, is a nonprofit cooperative corporation organized, existing and doing business under the laws of the State of California, with its principal offce and place of business located at 240 Battery Street, San Francisco, Calif. 2. Respondent is engaged in the business of selling and distributing canned fruits Rnd vegetables of many VlLrieties, all of which it processes and cans at its plants in IVlodesto, San .J ose and Stockton, Cali fornia. Respondent sens and distributes its canned fruits and vege tables under the private labels or brands of its purchasers and also under its own labels or bntnds.

3. Respondent sells products of like grade and quality to a large number of customers located throl. ghout the l,Tnited States for lise consumption, or resale therein, including wholesalers, retailers, r,chain stores and associations. Respondent's sales of its products are sub stantial, amounting in the fiscal year ending January 31 , 1959 , to $22 329 877.

4. In the course and conduct of its business, respondent has been and nmy is engaged in commerce, as "commerce" is defined in the Clayton Act, as amended.

5. Respondent sells it.s products to retailers, such as chain stores and cooperative organizations, and to wholesalers who in turn sell to the retail trade. Certain of these customers, including some twelve to tift,een l'Btail groc.ery chains, maintain buying agencies in San rancisco. In the course and conduct of its business, respondent has sold its products to these customers at lower prices tha.n it has sold products of like g-trade and quality to customers who did not maintain tJleir O'Yl1 buying agBllcies. Included in the latter group were ret"ilers and ,,'I101esaler5 who sen to the retail trade. The difference in prices charged customers ,yho maintained buying agencies and those who did not range from five cents to fifty cents, or from t,yO pet cent to ten per cent, per case of respondent's products. 6. R.respondent's customers also purchase canned fruits and vegeta;bles from other packers and the products sold by respondent under a custOlner s private label are frequently commingled jn the customer warehouse with like products bearing the same label. These products arc thereafter shipped by the customer either to its own retail outlets for resale to the public, or, in the case of a wholesaler to smaJ)cr retailers for resale to the public. 7. The Commissioniinds that there have been numerous illstances of price discrjminations by respondent in favor of certain large chain 1180 FEDERAL TRADE COMMISSION DECISIOXS Findings and Order 60 F.

stores and against, wholesalers and retailers in the sale of canned frllils and vegetables of like grade and quality.y. The following are examples of such discriminations:

In February 1957, respondent sold products designated as Choice Heayy Halves Unpeeled Apricots to Fred :Ueyer, Inc., of Portland Oregon, at $5. 70 per case, and to IIudson House, Inc., of Portland Oregon, at $6. 15 per case.

In November 1957, respondent sold products designated as Choice Heavy Syrup Sliced Y. C. Peaches to A & P in Portland, .Maine, at. $4.90 per case, and to Hannaford Bros. Co., in Portland !\1aine, at $5.:30 per case.

In November 1957, respondent sold products desig1lated as Choice Heavy Syrup Halves Y. C. Peaches to A & P in Pittsburgh, Pennsylva,nia, at $4.80 per case, and to Associated Grocers, Inc., in Pittsburgh Pennsylvania, at $5.20 per case.

In February 1957, respondent sold products designated as Standard Light Syrup Pears to Safeway Stores in Denver, Colorado, at $6. per case, and to Associated Grocers in Denver, Colorado, at $6.50 per case.

In :\arch 1957, respondent sold products designated as Choice Heavy Syrup Sliced Y. C. Peaches to Safcway Stores in Denver Colorado, at $5.30 per case, and H. A. Man in Denver, Colorado, at $5. 55 per case.

In each instance of such price discrimination, the cl1a-in store receiving the benefit of the discrimination was engaged in competition with one or more nonfavorecl purchasers in the sale at retail of food find grocery products, including canned fruits and vegetables sold under' each purchaser s private label.

The Commission also finds that certain of said chain stores receiving the benefit of respondent's price discriminations have also been engaged in competition in the sale of food and grocery products wit.h independent retailers who "were selling private label canned goods which they had purchased from nonfuvol'ccl wholesalers. For example, respondent discriminated in favor of Safe\vay Stores, (1 reta.il chain, and against H. A. Marl', a wholesaler, in the sale of goods of like grade and quality shipped to the Dcm' , Colorado, warehouses of these purchasers. The record shows that Foodland Supermarkets and Preisser Grocery and Market, both of Denver, Colorado, and Piggly 'Wiggly o. 10, and CeEuzz, Inc., both of Littleton, Colorado purchased canned goods from H. A. !\an and resold such products retail in direct competition with retail outlets of Safeway Stores. TRI-VALLEY PACKING ASSN. 1181 1134 Findings and Order 8. The Commission further finds that the grocery business is highly competitive, that markups at various levels of distribution are affected by competition, and tha.t the percentage of return on large volume of sales is small. The net profit of some wholesalers does not exceed the customary two and one-half pel' cent cash discount accorded for prompt payment and the net profit of certain retailers runs less than six per cent. A price difference of only ten cents a case would in some inst,ances be suffcient to cause a purchaser of canned fruit or vegetables to buy from one packer instead of another, and a difference of a cent or two a can could cause the loss of a sale at the retail level. Under these circumstances, a difference in the price of canned goods ranging from t,yO per cent to tell per cent is suthcie,nt to give the purchasers paying the lower price a substantial advantage over their competitors. The effect of respondent' s price discriminations, therefore may be substantiaDy to injure, destroy or prevent competition between chain stores receiving the benefit of such discriminations and nonfa.vored retailers and retailer customers of nonfavored wholesalers. 9. Respondent claims that its lower prices to certain purchasers were made in good faith to meet the equally low prices of competitors. The competitors whose prices respondent claims to have met are those packers who maint-ain sales representatives in San Francisco and sell through such representatives to certain large purchasers, including favored chain stores, who maintain buying agents in that city. The market in \which such sales are made is known as the San Francisco or California Street" market. The buyers represented in this market including said large chain stores, have usually paid less for the packers' products than buyers that purchase in other markets. AI. though the opening prices in the "California Street" market are ordinarily announced by the packers, the goods are not sold in appreciable volume unless the prices are satisfact.ory to the buyers. Respondent has admitted that almost inva.riably the "market price in this market is established below,v the range of opening prices. Although respondent was aware of all these facts and therefore knew or houlcl have known, that the lower prices of its competitors were discrinlinatory, it did not Ldduce evidence to show that it had reason to bclieye that such prices could have been cost justified or otherwise exeused under Section 2 (a). Since respondent has failed to prove that it had reason to believe that the prices of its competitors were lawful, it has not established OIl the record that it acted in good faith :in meeting such prices.

10. On the basis of the record herein, the Commission finds that respondent has discriminated in price between different purchasers in Findings; and Order 60 F.

the sale of goods of like grade and quality in commerce and that the effect of such discriminations may be substantially to injure, destroy or prevent competition with purchasers receiving the benefit of such discriminations; and that respondent has failed to establish a valid defense under Section 2 (b) of the Clayton Act, as amended. 11. 'With respect to the charge that respondent violated Section 2(d) of the Clayton Act, as amended, the record shows that respondent granted allowances to Fred l\leyer, Inc., of Portland, Oregon, and to Central Grocers, Inc., of Roston Iassaehusetts as compensation or in consideration for servic.es furnished by these. pureha,sers in connection with the sale or offering for sale of products sold by respondent. There is also snffcient evidence to establish that, at approximately the same time these allowances were granted, respondent sold products of like grade and quality to other purchasers competing with Fred Meyer, Inc., and Central Grocers, Inc., in the distribution of such product The record also shows that, with respect to each of the favored purchasers, the arrangement to grant the allowance was a specially tailored or negotiated deal involving promotional activities initiated by the purchaser. N eit her of these deals was offered to competing purchasers and respondent has failed t.o show that the allow anees were made available to such competing purchasers on proportionally equal terms.

12. On the basis of the record herein, the Commission finds that respondent has granted allowances to certain cllstomers for services rendered by such customers in connection with the sale of respondent' products without making such allowances available on proportionally equal terms to other customers competing- in the distribution of such products.

CONCLI:SIOKS The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. The discriminations in price by respondent, as hereinabove found, constitute violations of subsection (a) of Section 2 of the Clayton Act, as amended. The acts of respondent in granting allowa.nces to certain customers, as hereinabove found, constitute violations of subsection (d) of Section 2 of the Clayton Act, as amellded.

Order It is ordered That respondent, Tri-Valley Packing Association, a corporation, and its offcers, representatives, agents and employees directly or through any corporate or other device in, or in connection CONTIKENTAL BAKING CO. 1183 1134 Complaint with, the sale of food products in commerce, as "commerce" is defined in the amended Clayton Act, do forthwith cease o,nd desist from: 1. Discriminating in the price of such products of like grade and quality by selling to any purchaser at net prices higher tlmn the net prices charged any other purchaser who in fact, competes with the purchaser paying the higher price or with customers of such purchaser. 2. Paying or contracting for the payment of anything of vo,lue to or for the benefit of any customer of respondent as compensation or in consideration Tor any services or facilities furnished by or through such cllstomer in connecUoll with the offering for sale, sale or distribution of any of responclenfs products, unless sneh payment or consideration is made available on proportionally equal teTIllS to all other cllstomers competing in the distribution of sllch products with the favored customer.

It is fU1'thej' ordered That respondent, Tri-Valley Packing Association, shall, within sixty (60) days after service upon it of this order file with the Commission a report, in writing, setting forth in detail the manner and form in which jt has complied wit.h the order to cease and desist.

Commissioner Elman dissenting.

I" THE MATI CONTINENTAL BAKING COMPANY CONSENT OHDEH , ETC., IN REGARD TO THE ALLEGED VIOLA TION OF THE FEDERAL TRADE CO:\Il\ISSIOX ACT AXD SEC. 7 OF THE CI..YTO:r-r ACT Docket ''/880. COnlplahlt. Jlay ii, l.fJ6'O-Decision, Jlayll 962" Consent order requiring the dominant supplier of bread and bread-type rolls in the Omaha, Nebr., area and other sections of the country, to sell a competing Omaha baking concern \which it purchased in 1958 and which was probably the eighth largest in the country and also had plants and competed with Continental in other sections, and to refrain for 10 years from acquiring any interest in any concern producing bread and rolls without Commission permission; and dismissing allegations that its acquisition of two other bakeries-in Rochester, MinH. , and Pittsburgh, Pa. , respectively-violated the antimerger statute and that it engaged in other unlawful practices in restraint of trade.

CO.:IPLAIN' The Federal Trade Commission, ho,ving reason to believe that the above named respondent has violated and is now violating the p:ro- .. As modified :Xoyembel' 1. , Hig2.

1184 FEDERAL TRADE COMMISSION DECISIOKS Complaint 60 F.

visions of Section 1 of the amended Clayton Act (15 U. C. Sec. 18) and Section 5 of the Federal Trade Commission Act (15 U. C. Sec. 45), and it appearing to the Commission that a proceeding by it respect thereof would be in the public interest, hereby issues its complaint charging as follows:

COUXT I P ARAGHAPH 1. R.respondent is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal place of business located at Rye, N. Respondent is engaged in the business of manufacturing, distributing and sellng bread and other bakery products. Its products are sold primarily under the trade name of "'Wonder" for bread and Hostess" for cakes. Respondent is the largest commercial baker of white bread, and one of the largest bakers of cake in the United States. Its total sales during the year 1957 exceeded $307 000 000. Respondent' s products are baked by some 86 plants located in approximately 51 cities in 29 states and the District of Columbia, and are distributed by approximately 333 agencics and depots throughout a 44 state system. The daily production of each bakery of the respondent is distributed to grocery stores, restaurants, institutions, and other users, by approximately 5000 driver-salesmen operating light delivery trucks on about 4500 regularly established routes. PAR. 2. Sales of bread and bread-type rolls are made from each of respondent' s bread plants throughout an effective area of distribution of several hundred miles from each plant. This radius is govcrned by the distance each plant can economically ship its products. .Within this effective area or distribution, each plant encounters competition from local independent bakers and other plants of national bakers. For example, typical of the trade areas in which respondent operates is the Omaha, Nebraska, trade area. In this trade area, respondent operates a bakery plant that ships fresh bread and bread-type rolls within its marketing or distributional area. 1Within this trade area of its Omaha plant, respondent encounters competition in the distribution and sale of bread and bread-type rolls from local independent wholesale bakeries and plants of other competing national bakeries. PAR. 3. In the course and conduct of its business, respondent ships bread and bread-type rolls directly from its bakeries to the purchasers thereof, some or whom are located in states other than those from which such shipments originate. Further, respondent ships bread and bread-type rolls from its bakery to sales depots or loading stations CONTI1,ENTAL BAKING CO. 1185 1183 Complaint some of which arc located in states other than those from which such shipments originate, for the purpose of having such products reshipped to its purchasers, some of wh01n are located in states other than those :from which re-shipments are made.

Further, in the course and conduct of its business, respondent carries on negotiations across state lines with some of its customers Tor the sale of its products. As part of such negotiations, adjustments of accounts between respondent and sonle of its customers regularly take place across state lines.

Advertising of respondent's products, on both a national and local scale, is prepared and placed in various advertising media by respondent, or under its direction and control, from its headquarters at Hye New York.

In the regular course and conduct of its business from its headquarters, respondent purchases various raw materials for the manufacture of its products as well as SUppliCE, equipment nncl other needs for such manufacture and ships or causes to be shipped such items to its bakeries located in states other than those from which such shipments originated.

In the regular course and conduct of its business respondent maintains and controls, eit.her directly from its heaclqmuters or through its regional oficcs, acti.vities of its bakeries located in the various states of the Fntied States, such as:

1. The areas in which, and the prices at which, each bakery sells respondent's products;

2. The standard of production of an of its bakeries; 3. The nature. find extent of most repairs to plants and equipment j 4. Personnel policies; and 5. Funds to be collected and dispersed by said bakeries. In the exercise of such cont.rolls, there is maintained a.cross state lines a st.eady flow of correspondence and other contacts between and among respondent' s headquarters, regional offces, bakeries a.nd sales depots. By tllcse Inethocls, respondent mailltains a course of trade jn commerce) as "commerce" is defined in the amended Chtyton Act and in the Federal Trade Commission Act, in bread and other bakcry products among and behveen the various states of the United States. PAn. 4. Prior to the acquisition alleged herein, Omar, Inc., was a corporation organized, existing, a.nd doing business under and by virtue of the laws of the State of Delaware, with its principal place of business located at 1910 Harney Street, Omaha, Nebraska. It was engaged in the manufacture, distribution and sale of bread aJ1d other bakery products, from plants located at Omaha, Nebraska; Complaint 60 J!' Indianapolis, Indiana; j\Iilwaukee, 1Visconsiu; and ColW11bus, Ohio. These. products were shipped from the plants mentioned via trucks to approximately 50 branches or depots for :further distribution throughout some 1500 routes in the States of Illinois, Inc1jamt, Iowa 'Visconsin ebraska, and parhons of the St.ates of :Missouri, l(entucky and \Vest Virginia.

Total sales of Omar, Inc., during the year 1957 "were approximately $40.000 000, which volume placed it among the ten largest commercial bakers in the U nite,l States.

PAR. 5. In the course and condud of its business, Oma1', Inc. shipped bread and bread type rolls from its various bakery plants direct.ly to jts purchasers, some of whom were located in states other than those from "which such shipments originated. It also shipped its proclncts from its bakeries to sales depots or loading stations, some of which "ere located in st.ates other than those in which such shipments originated, for regular reshipment. to pnl' hasers, some of whom were loc,ltec1 ill stat.es other tlmn those from which such reshipments were made.

some. of its GmaI' , Inc., carried on negotiations across state lines with cust.omers for t.he sale of its products, as well RS for the adjustment of accounts between it and its customers.

Advertising of its products was prepared and placed in various advertising media by Ornar, Inc., or lUlder its direction and control from its headquarters in Omaha, Nebraska.

In the regular course and conduct of its business from its headquarters, Omar purchased raw materia.l for the manllfactl1re of its products as wen as supplies, equipment and other needs, and shipped or c sed to be shipped such items to its bakeries located in states ot.her than those from which sllch shipments originated. In the course and conduct of Hs business, Omar, Inc., maintained control over various aetivlties of its different bakeries such as, for example:

1. The areas in which, :lld prices at. which, each bakery was permitted to sell;

2. Standarcls of products to be nmintained by said bakery; 3. The nature and extent- of most repairs to phnts and equipment j 4. Personne) policies; and 5. Funds to be collected and dispersed.

In the exercise of such controls, Omar, Inc., maint.ained across state lines a steady flow of correspondence and other contacts between and among its headquarters and its bakeries.

CONTINENTAL BAKING CO. 1187 1183 Complaint By such means, Omar, Inc., maintained a course of trade in commerce, as "commerce" is defined in the a.nended Clayton Act and in the Federal Trade Commission Act, in bread and other bakery products an-long and between the various states of the United States. PAR. 6. Since 1952 respondent has ellt.e,reel into a continuous practice of acquiring various bakeries throughout the United States, many of ,,,which, prior to their acquisition by respondent had competed 'with respondent within the marketing areas of the acquired companies, and all of which prior to their acquisition by respondent were engaged in comrne.rce, as "commerce': is defined in the amended Clay tell Act and the Federal Trade Commission Act.

In 1952 respondent acquired Southern Ca,lifornia Bakery Co. San Diego, California, thereby eliminating the largest independent local wholesale b:lkery in the San Diego market.

In December J 953 respondent acquired Smith Baking Co. , Lincoln, Nebraska, eliminating this independent bakery as a competitive factor in the Linco1nmarket.

In December 1954 respondent acquired Royal Baking Co., Raleigh North Carolina, thereby obtaining a bakery and 12 established distribution depots covering the distributional area of eastern orth Carolina. This acquisition constitutes a market entry into this area by respondent.

In November 1955 respondent acquired )tIorton Packing Co. , a ma.nufaeturer of frozen meat pies, frozen fruit pies, and ot.her frozen food items from plants located at Crozet, Virginia, and 'Webster City, Iowa, thereby obtaining a market entry in the line of commerce stated. In April 1958 respondent acquired DiCarlo ational Bakery, Inc. San Pedro, California, thercby adding to its overall competitive strength in the lower California market area and eliminating one of the remaining competitive independent wholesale bakeries in that area. Since the acquisition of GmaI', Inc., respondent has acquired other bakeries in furtherance of its policy and practice of acquiring bakeries with some of which it had competed prior to such acquisition. For example, in ovember 1958 respondent acquired Rochester Bread Company, Rochester :Minnesot.a, which ope.rated 35 whole-sale routcs within a 100 mile rac1ins of Rochester and was the largest independent wholesale bakery in the R.ochester trade area. Further, in December 1958 respondent acquired the Braun Baking Co., Pittsburgh, J ennsylvania, which distributed bread and bakery products in 10 counties in western Pennsylvania. By this acquisition respondent has entered that market area in a strongly competitive position.

719-603--64--7 Q 1188 FEDERAL rl'TRADE COM:ISSION DECISIONS Complaint 60 F.

PAR. 7. Prior to the Omar acquisition alleged herein, respondent competed with Omar, Inc., in the distribution and sale of bread and bread-type To11s in such distributional areas or sections or tllc country as Omaha, Nebraska; Indianapolis, Indiana; J11i1waukee, vVisconsin; and Columbus, Ohio.

For example, prior to the acquisition herein alleged, in the Omaha Nebraska, marketing or distributional area, 01' "section of the country, respondent was a leading factor in the supply or bread and breadtype rolls. In 1957 respondent accOlUltec1 for approximately 10% of the total amount of bread and llJenc1-type rolls marketed in this area. In this same ye, , 011a1', Inc., accounted for approximately 17% of said total amount.

PAR. 8. On or about November 29, 1958, tJ,e respondent acquired all or tile assets or Omar, Inc. , for approximately $.1,217 8.'0. Thereafter Oroar, Inc., became a wholly owned subsidiary or respondent, operating under the name of "Omar Bakery, Inc.

\R. 9. Respondent has violated Section 7 of the amended Clayton Act in thftt the acquisition of Omar, Inc., as well as the other acquisitions listed in paragraph 6, either individually or collectively, may have the cffeet of substantially lessening competition or tending to create a monopoly in the respondent in the following ways, among others:

1. Respondent has become, actually or potentially, the leading and dominant supplier of bread and bread-type rolls within the "section of the country': of the Omaha, Nebraska, marketing or distributing area; 2, Respondent has become, actually or potentially the leading and -dominant supplier of bread and bread -type rolls in the other "sections of the country" in which Omar, Inc., had bakery plants, and in which respondent competed with Omar, Inc., in the sale and distribution of these products;

3. Respondent has become, actually or potentially, the leading and dominant supplier of bread and bread-type rolls in the "section of the country" considering the entire distributional area of the bakeries of Omar, Inc., as one " section of the country 4. Respondent has eliminated actual or potential competition by and between it and Omar, Inc., and between it and tl1c other bakeries acquired as described in paragraph 6, in each of the "section(s) of the country" or market areas described;

5. Respondent ha.s substantially lessened actual and potential com- -petition throughout the country in the manufacture, S'ale and distribution of bread and bread-type rolls;

COXTDmNTAT BAKING CO. 1189 1183 Complaint 6. Respondent has eliminated Omar, Inc., and the bakeries it has acquired as alleged in paragraph 6 as independent competitive factors in thc manufacture, sale and distribution of bread and bread-type rolls in the "section (s) of the country" described; 7. Respondent has enhanced its competitive advantage in the manufacture, sale and distribution of bread and bread-type rolls to the detriment of actual and potential competition throughout the country. 8. Hespondcnt has significantly increased the t.rend to industry-wide concentration of the manufacture and sale of bread and bread-type rolls;

9. Respondent has precluded and prevented suppliers of various items tnd products used in the manufacture, sale and distribution of bread and bread-type rolls from. selling same to Omar Bakery, Inc. as they did to Omar, Inc. , and to the other bakeries described in paragraph 6;

10. Respondent has cnJmnced its power and ability to preclude or foreclose new entrants into the bread and bread-type rolls industry in the sections of the country described.

PAR. 10. The foregoing acquisitions and the acts and practices of respondents, as herein tllege, constitute violations of Section 7 of the Clayton Act (U. C. Title 15, Sec. 18) a3 amended and approved December 29, 1950.

COUNT II PAI'- 11. An of the allegations of paragraphs 1 through 9 hereof are hereby realleged and incorporated herein by reference, and made a part of this Count II as though each were set forth in full herein. P AH. 12. By its policies and practices of acquiring bakeries throughout the United States, respondent has acquired the power and ability to achieve an actual or potential monopoly in the manufacture, sale and distribution of bread and bread-type rolls in the United States. By virtue of its position in the bakery industry and its continuous growth by acquisitions, respondent has acquired an actual or potential monopoly power to ilnpede and prevent the growth and business opportunities oT it.s competitors, as well as their ability to survive in the manufacture, sale and distribution of bread and bread-type rons in the United States.

In the course and conduct of its business in commerce, respondent has used its increasingly dominant position and economic power to engage in, and is now engaged in, performing or effectuating various policies, acts and practices in the business of manufacture, distribution and sale of bread and bread-type rolls in the United States. Among such Rcts, methods and practices are:

1190 FBDERAL TRADE COMMISSIOI\ DECISIONS Complaint 60 F.

1. Direct payments of cash to grocers for preferred space for the display of respondent' s products;

2. Reductions in prices or charges to some grocers or retailerswithout relation to any savings on respondent's costs in the ma,nufacture, distribution, or sale of its products-for the purpose, or with the effect, of gaining entry into the stores of such grocers or retailers thereby enhancing the potential resale of these products at the expense of competitive products; and 3. Giving discriminatory rebates, discounts a.nd al1mvances, by various methods, in order to enable the purchasers of respondent' bread, as wen as its other bakery products, to reduce the consumer prices therefor, or in lieu thereof, to enjoy a greater net profit on retail sales of respondent's products.

PAR. 13. The effect of the acquisitions alleged and the consequent and effectuating policies\ methods, acts and practices of respondent as alleged, has been or may be:

1. To divert to respondent, from its competitors, who are not in the economic position to successfully engage in such policies, methods acts and practices, a substantial share of the sales of hread and breadtype rolls;

2. To discourage or tend to foreclose the entry of any new competitors in the manufacture, distribution and sale of bread and bread-type roJJs;

3. To lessen, hinder, restrain and suppress competition in the manufacture, sale and distribution of bread and bread-type roJJs. 4. To actually or potentially enable respondent to dominate the manufacture, sale and distribution of its products, in various sections of the country; and 5. To tend to create a monopoly in respondent in the manllfacture sale and distribution of bread and bread-type roJJs in those sections of the country where respondent sells and distributes such products. PAR. 14. The foregoing policies, methods, acts, practices and acquisitions of respondent, as herein alleged, arc a11 to the prejudice of respondent' s competitors and to the public; have a tendency or capacity to hinder and prevent, and have hindered and prevented, actual or potential competition in the manufacture, sale and distribution of bread and bread-type rolls in commerce and constitute unfair methods of competition and unfa,iI' acts and prfletices in commerce within the intent and meaning of Section 5 of the Federal Trade Commission Act (D. C. Title 15, Sec. 45) a.nd constitute a violation thereot. , CONTINE TAL BAKI: G co. 1191 1183 Initial Decision h. Edwa1d H. MeOra'il and Mr. V. Rock O,-undman, Jr. for the 'Commission.

Oovington'& Bnrling, oflVashington, D. , by Mr. Paula. Wa,'1!ke and Mr. Johns. Schafer for respondent.

INITIAL DECISION BY "\VILMER L. TINLEY, HEARING EXAMINER On l\Iay 5 , 1960, the Commission issued its complaint against respondent, Continental Baking Company, a producer of bread and other bakery products, charging violation of Section 7 of the amended Clayton Act in connection with its acquisition of Oroar, Inc., and Rochester Bread Company, in ovember 1958, Braun Baking Company, in December 1958, and certain other companies during the period 1952 through 1958; and with violation of Section 5 of the Federal Trade Commission Act by its continuous practice of acquiring various baking Conc81'l1S throughout the lTnited States.

Hearings have been held in support of the complaint in Columbus Ohio, 1Iilwaukee, 'Visconsin, Indianapolis, Indiana, and Omaha Nebraska, as well as in the District of Colmnbia. Further hearings which wero scheduled, were cancelled because of submission by counsel of the agreement hereinafter referred to.

By its order of February 28, 1962, the Comnlission ,waived in this case the provision of its Xotice of July 14, 1961 , requiring the filing prior to September 1 , 1961, of a notice of intent to dispose of any pencling proceeding by con ent agreement. j and referred to the hearing examiner for appropriate consideration under the applicable ll11les of Practice the request of February 2G, 19G2, by counsel support.ing the complaint on behalf of all parties to the proceeding, which was considered as f1 not.ice, timely filed, or intent t,o dispose of the proceeding by consent agreement.

Thereafter, on larch28, 1962, there ,,,as submit.ted to the hearing examiner an " grcement Containing Consent Order to Divest and t.o Cease and Desist, which agreement vms entered into by and between Continental Baking Company, by its duly authorized offcers and attorneys, and by counsel supporting the complaint, with the approval of the Chief, Division of l\Iergers and the Director, Bureau ()f H.estraint 01' Trade, in accordance with Section 8.25 of the Commission s Rule.'J or Pnlctice in effect prior to truly 21 , 1961. By the terms of said agreement, t.he parties agree that: 1. Respondent is a corporation doing business 1U1c1er and by virtue of the laws of the Stale of Delaware with its principle place of busines located at IIalsteac1 Avenue, Rye., N. 1192 FEDERAL 'rhode CO:vVIISSION DECISIOKS Initial Decision 60 F.

2. Pursuant to the provisions of Section 7 of the amended Clayton Act, and Section 5 of the Federal Trade Conn11ission Act, the Federal Trade C0l111lission on i\Iay 5 , 1960, issued its complaint in this proceeding against respondent and a true copy was thereafter duly served all respondent.

3. Respondent admits 0.11 the jurisdictional facts alleged in the COffplajnt and agrees that the record may be taken 118 if fmdings of jurisdictional facts had been duly made in accordance with such allegations.

+. The agreement disposes of all of this proceeding as to a11 parties; and that the orde.r contained therein is in the public interest for the reasons set fOli-h in appendix A which is attached to the agreement and by refercllee is made a part thereof. 5. Respondent waives:

(a) Any further procedural steps;

(b) The requirement that the Commission s decision contain a statement of findings of fact and conclusions of 1a w; and (c) All rights to seek judicial review or otherwise to challenge or contest the validity of the order entered pursuant to this agreement. 6. The record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the agreement.

7. The agrcement shall not become a part of the offcial record of the proceeding unless and until it is accepted by the Commission. 8. The agreement is for settlement purposes only and does not con, stitute an aclnlission by respondent that it has violated the la,y as alleged in the complaint.

9. For the purposes of the agreement, the definition of bread and bread-type rolls shall be that used by the Bureau of the Census as set forth in the Census of Manufactures category S.LC. 20511. 10. The order incorporated in the agreement may be entered in this proceeding by the Commission without further notice to respondent. When so entered it shall have the same force and effect as if entered after a full hearing. It may be altered, modified or set aside in the manner provided for other orders. The complaint may be used construing the terms of the Dreier.

The hearing examiner has considered the agreement and the order conbtined therein, together with the representations made in appendix A attached thereto, and is of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding in the public interest. The content of the agreement meets all of the requirements of Section 3.25 (b) of the Commission s Rules of Practice in COKTl.'mNTAL BAKING CO. 1193 1183 Initial Decision effect prior to July 21, 1961. The agreement is, accordingly, hereby accepted, and the following order is issued. ORDER * It is ordered That respondent, Continental Baking Company, a corporation, through its offcers, directors, agents, representatives and employees shall on or before Febl1ary 15 , 1963 , divest itself absolutely and in good faith, subject to the approval of the Commission of all assets, properties, leases, right. and privileges, tangible and intangiblc, including but not limited to all contract rights, plants machinery, equipment, trade nalnes, trade-marks and goodwill, acquired by respondent as a result of its acquisition of all af the assets af Groat Incarparated, together with all a,dditians and impravements made by respondent ta such plants, lnachinery buildings, equipment and any other praperty of whatever descriptian, as may be necessary substantially to reestablish the competition that was previously affordcd by Omar Incorporated.

It is fu,1'ther ordered That respondent shall not seIl 0'1' transfer the aforesaid assets, tangible or intangible, directly or indirectly, to anyane wha at the time of divestiture is a stockholder, offcer, director emplayee, 0'1' agent af, 0'1' otherwise directly 0'1' indirectly cannected with Dr under the cantrol 0'1' ill11ucn, of the responden t. III It is f1lrther O1'dered That for a period of ten (10) years from the date of issuance of this ordcr by the Federal Trade Commission respondent shall cease and desist from acquiring, directly or indirectly, through subsidiaries or otherwise, the whole or any part of the stock share capital, 0'1' assets of any can cern, carparate or non -corporate engaged in any state of the United States in the production and sale af bread and bread-type rails unless the Canm1issian, on petition for modification of this Section III of this order, permits such an acquisition by respondent, said modification t.o be within the sole and ilnal discretion of the Federal Trade Commission. It is fwtheT ordered That respondent shall submit to the Federal Trade Commission bi-monthly reports deseribing the action that has .. As modifed November 13, 1962.

1194 FEDERAL TRADE CO:r..IMISSION DECISIOKS Syllabus 60 F.

been taken and the efforts that have been made to sell the subject assets. Such reports shall indicate the methods and means employed to effectuate a sale, the result of such actions and effort and shall set forth the name and address of each person or company contacted, or who has indicated interest in acquiring said assets, together with copies of all correspondence and summaries of all oral conuunications with such persons or companies.

It i8 further O1'dered That respondent shall, within sixty (60) days after divestiture of the subject assets, file with the Federal Trade Commission a report in \writing setting fOli,h in detail the manner and form in which it has complied with this order. It is further mde' That, except as provided in Paragraphs I II and III of this order, the allegations of the complaint herein are dismissed.

DECISION OF THE co nfISSlO AXD ORDER TO FILE REPORT OF co rl'LIANCE Pursuant to Section 8.21 of the Commission s Hules of Practice published May 6, 1955, as 'amended, the initial decision of the hearing examiner slmll, on the 11th day of May 1962, become the decision of the Commission; and, accordingly:

It is orrlel' Tlu,t the responde.nt shall file with the COlnmission such reports in writing as are required by the initial decisioll. C0ll1nissione.r I\IacIntyre llot concurring. Ix THE L\TTER OF THE HOWAHD ZINK CORPORATION ET AL.

CONSENT ORDER, ETC. , IN REGARD TO THE ALLEGED YIOLATIO OF THE FEDERAL TRADE CO DIISSlOX ACT Docket 0-1.35. Complaint, Ma!lll, ID62-Deeision, JIay 1962, ,Consent order requiring Frellout, Ohio, manufacturers of automobile seat covers and their sales manager at Long Beach, Calif., who sold to indeppndently owned retail stores, some of ,which were franchised by them and operated under the trade name " Sure Fit Store, to cease representing falsely in catalogs. adverth:ing mats and proofs. and display cards furnished to dealers, and in advertisements inserted in newspapers for their franchised , , ; , , ; THE HOWARD ZINK CORP. ET AL. 1195 1194 Complaint dealers, that excessive "Suggested Retail" Regular reg. , and "were prices ,ycre the usual retail pl'kes; through use of the ,yards " Sale Prices Special" Save Save to $4.95" , etc. , that usual prices were reduced; and through use of the word "customized", that seat covers so described were made to order, C01\IPLATXT Pursuant to the. provisions of the Federa.l Trade Commission Act, and by virtue of the authority Y8sted in it by s"id Ad, the Federal Trade Commission, having reason to believe t.hat The Howard Zink Corporation, a eorporaticJ1, and Jack D. Zink, Clarence:.1. 1Ve.ruling, \11 arren A. Zink, and Norbert. S. flonse, indivichml1y and as offcers of said corporation, and Norbert Zink, an individual, hereinafter referred to as respondents, have violated the provisions of said Act and it appea.ring to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint st.ating its charges in that respect as follows: PARAGRAPH 1. Respondent The HO\vard Zink Corporation is a corporation organized, existing and doing business under and by virtue of the laws of the State of Ohio, with its principal offce and place of business located at Jackson and Napoleon Streets, in the cit.y of Fremont, State of Ohio.

Respondents Jack D. Zink, Clarence M. Werling, 'WalTcn A. Zink and Norbert S. 11011se are offcers of the corporate respondent. They formulate, direct and cont.rol the policies, acts and practices of the corporate respondent, including the acts and practices hereinafter.r set forth. Their address is t.he same as that of the corporate respondent. Respondent K orbert Zink is an individual and sales manager of respondents' Sure Fit Division with his business address at 5550 Paramowlt Boulevard, Long Bea.ch, Calif., and participates in and aids in carrying out the acts and practices of the corporation including the acts and practices hereinafter set forth.

PAR. 2, Hespondents atc no\v and for some time last paEt have been, engaged in the manufacturing, advertising, offering for sale sale and dist.ribution o.f automobile aecessory equipment consisting mainly of seat covers. R.esponde,nts: products are sold to independent.1y O\vnedand operated retail stores for resale to the public. Cer tain of these stores are franchised by respondents and they operate unc1erthe trade name " Sure Fit Store PAH, 3. In the course llld conduct of their business, respondents now cause" a.nd for some time last. pa t ha'ie caused, their said a.utomobile seat eoyers, when sold, to be shipped from their pla.ce of business in the BUttcs of California and Ohio to purchasers thereof located in various other stutes of the 'Cniied States, a,Dd ma.intain, a.nd at 1196 FEDERAL TRADE COMMISSION DECISIO Complaint 60 F.

aJl times mentioned herein have maintained, a substantial course of trade in sa.id product. in commerce, as "commerce ' is defined in the Federal Trade Commission Act.

PAR. 4. In t.he course and conduct of their business as aforesaid relating to automobile seat covers, respondents have made numerous st.atements in catalogs, in advertising mats and proofs, and in display cards furnished to retailers, and in advertisements inserted in newspapers for their franchised dealers, respecting certain manufactnring features or said seat covers, their retail prices and the savings aiIorded to purchasers of said products. Typical, but not all inclusive, of such staterncnts are the following: In the cntalog lurni8hed to Tetaile1':

SUlrg-esterl Retail fModel Number and Prices Customized In mats and proof.. furnished to retailers a.nd h adve?'t'senwnts inserted by Tespondents:

Plastic Reg. $24.95-$19.

100% CLEAR PLASTIC.

SA VE ! SAVE! $21.

$19.95 Full set reg. $24.

Fell SET $21.88 reg. $24.

SAVE 20% to 40% 15.00 FULL SET SAVE $4.

$22.00 FULL SET SA VE TO 84.

SA VINGS 20% to 40% off FVLL SE'l' 81G.

OUR BETTER CLEAR PLASTIC $21.

OUR BEST CLEAR PLASTIC 824.

WERE $24.

KOW 16.

WERE $19.

NOW 14.

YOUR CHA:"CE TO SAVE UP TO 40% REGULAR PRICE $19. SALE PRICE $14.

REGULAR PRIC1J $29. SALE PRICE 819.

HEGULAR PRICE $34. SALE PRICE $24.

On display canis:

SPECIAL Tills MONTH:

ULL SE ' 816.

SPECIAL THIS IONTH:

FULL SET 29.

SARAN PLASCl' SALE PRICF $28.

, , , , , , , , THE HOWARD ZINK CORP. ET AL. 1197 1194 Complaint PAR. 5. Through the use of the aforesaid statements respondents :represented, directly or indirectly:

1. That the designated "Suggested Retail" price was the price at which the merchandise referred to was usually and customarily sold in the trade area where such representation was made and that a saving ,of the difference between said designated "Suggested Retail" price and the actual selling price of said merchandise was auorded to purchasers. 2. That the higher prices designated "Regular reg.:' and ' were were the advert.isel' s usual and customary retail prices in the recent regular course of business of t.he merchandise referred to and that savings amounting to the differences between such prices and the lower offering prices \were afforded to purchasers. 3. Through the use of the words "Sale -Prices Special" and "Save that t.he advertiser s nSllal and customary retail price of the adve.rtised merchandise in the recent, regular course of business had been reduced. 4. Through the use of the statements such as " Sa;ve Save 2. to 40%" Save $4.95" Save to 84.95" Your chance to saxe up to 40%:' , that the advertiser s usual and customary retail price of the lnerchandise in the recent, regular course of business had been reduced the amount or percentage stated, thus afl'orc1ing savings to that extent to purchasers.

5. Through the use of the \yord "cue3tomizecF that the seat covers so described are made to order for the automobile of each purchaser. PAR. 6. Said statements were false, misleading and deceptive. truth and in fact:

1. The designated "Suggested Retail" price ,vas not the price at which the merchandise was usually and cu:-tomarily sold in the trade area where such repre.sentation 'vas Inade but "as in exe-ess of the actual rehlil sening price of said rnerchanclisc and a saving of the difference between the designated " Suggested R.etail: price and the tlctual sell ing price was not afforded to purchasers. 2. The higher prices designated "Regular Reg." and "were" were not the advertiser s usual and customary retail prices in the recent regula.r course of business of the merchandise referred to but were in excess of the. advertiser s actual retail prices, and savings amount.ing to the differences bet\veen stl1d designated prices and the lower selling prices were not afforded to purdwsers.

3. The ad vertiscl"s usual and cust.omary prices in the recent, regula.r course of business of the merchandise advertised "sale price special" or "save" had not been reduced.

4. The advertiser s usual and customary prices of the ad\Vertised merc.handisc jn the recent, regular course of business had not been 1198 FEDERAL TRADE COMMISSIO DECISIONS Decision and Order 60 F.

reduced in the amount or percentage stated and savings to that extent were not afforded to purchasers.

5. The seat covers described as "customized" were not made to order for the automobile of each purchaser but were ready-made. PAR. 7. Respondents, by furnishing retailers with catalogs and advertising material containing the statements and representations as aforesaid, have thereby placed in the hands of retailers the means and instrurnentali ties through and by w hieh the purchasing publ ic Ina.y be misled as to the prices and manufacture of said seat covers and the savings afforded to purchasers of said merchandise. PAR. 8. In the conduct of their business, at an times mentioned herein, respondents have been in substantial competition ill commerce with corporations, firms and individuals in the sale of automobile seat covers of the same general kind and nature as those sold by respondents.

PAR. 9. The use by respondents of the aforesaid false, misleading and deceptive sta,tements, representations and practices has had, and now has, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase of substantia.1 quantities of respondents' products by reason of said erroneous a.nd mistaken belief.

PAR. 10. The aforesaid acts and prac6ces of respondents, as herein alleged, were, and are, all to the prejudice and injury of the public and of respondents' competit.ors and constituted, and now constitute unfair methods of conlpetition in C01111nerce and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Tracie Commission Act.

DECISION AND ORDER The Commission having heretofore determined to issue its complaint charging the respondents named in the caption hereof with violation of the Federal Trade Commission Act, and the respondents having been served with notice of said determination ,md with a copy of the complaint the Commission intended to issn, log-Piher with 8- prop() ecl form of order; and The respondents and counsel for the Commission lhl\ ing thereafter executed an agreement conta.inillg a consent order, an admission by the respondents of a.11 the jurjsdictional facts set forth jn the cOJnp1a.int to issue herein, a stateme,nt that the signing of said agreement is for settlement purposes only and docs not constitute an a.admission by re- THE HOWARD ZINK CORP. ET AL. 1199 1194 Decision and Order spondents that the law has been violated as set forth in such complaint and waivers and provisions as required by the Counrussion s rules; and The Commiss\on, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes the following jurisdictional fmdings, and enters the following order:

1. Respondent, The Howard Zink Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of Ohio, with its offcealld principal place of business located at Jackson 'and N apolcon Streets in the city of Fremont, State of Ohio.

Respondents Jack D. Zink, Clarence M. 1Verling, Warren A. Zink and K orbert S. IIouse ate offcers of said corporation and their address is the same as that of said corporation.

Respondent Norbert Zink is an individual and sales manager of respondents' Sure Fit Division with his business address at 5550 Paramount Boulevard, Long Beach, Calif.

2. T'he Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER It is ordered That respondents The Howard Zink Corporation, a corporation, its offcers, and Jack D. Zink, Clarence ::1. Werling, W arren A. Zink, and Norbert S. House, individually and as offcers of f3aid corporation, and Norbert Zink, an individual, and respondents agents, representatives and employees directly or through any corporate or other device, in connection with the offering for sale, sale and distribution of automobile seat covers or other products, in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from:

1. Representing, directly or by implication that any amount is the usual and customa.ry retail price of merchandise in a trade area areas when such amount is in exce of the price at which sa.id merchandise is usually 'and customarily sold at retail in the trade area or areas where the representa60n is ma;de.

2. Using the words " suggested retail" to describe or refer to the retail price of merchandise when the ' amoil1t so designated is in excess sold at retail in of the price at which said merchandise is customarily the tra-de area, or areas, where the representation is made. 3. Representing directly or by implication that any amount is any , 1200 FEDERAL TRADE CO nSSION DECISIO:\S Decision and Order 60 F.

dealer s usual and customary. retail price of merchandise when it is in excess of the price at which such merchandise has been usually and customarily sold by such dealer in the recent, regular course of business.

4. Using the words "regular, "Reg. " or "were" to describe or refer to any dealer s retail price of merchandise when the amount 80 described is in excess of the price at which the merchandise has been usually and customarily sold by such dealer in the recent, regular course of business.

5. Using the words "sale price special" or "save" to designate or describe the price at which merch"ndise is being offered for sale by a dealer unless such price constitutes a reduction from such dealer usual and customary price in the recent regular course of his business. 6. Representing, directly or by implication, that any savings are afforded from any dealer s usual and customary retail prices unless the price at which the merchandise is offered constitutes 11 reduction from the price at which it has been sold by such retailer at retail in the recent, regular course of business.

7. Representing directly or by implication, that any saving is afforded in the purchase of merchandise from the price at which said merchandise is usually and customarily sold at retail in the trade area or areas, where the representation is made unless the price at which it is offered constitutes a reduction from such price. 8. using percentage savings claims or amounts to represent that merchandise is offered at a reduction from any dealer s usual and customary ret.ail price unless the price of such merchandise has been reduced in the percentage or amount stated from such retailer s usual and customary price in the recent, regular course of business. 9. Jlisrepresenting in any Jnalll1er the amount of savings avrdlable to purchasers buying respondents' merchandise from any dealer, or the amount by which the price of said merchandise is reduced frOlTI the price at which it is usually and customarily sold by such dealer in the recent, regular course of his business, or from the price at which said merchandise is usually and customarily sold in the tntde area or areas where the representation is made.

10. Furnishing or otherwise placing in the hands of retailer.rs of said products, or others, any means or instrmnentality by or through which they may mislead and deceive the public in the 11anncr or as t.o the things hereinbefore prohibited.

11. Using the word "customize.cF or any other word or words of the same import to refer to or describe products which are re.ady-lnac1e, or , , ..

CALIFORNIA FRUIT EXCHA1 1201 1194 Complaint respresenting in any other manner that suell products ate made to order for the automobile of each purchaser. 1 tis furthe' ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in data-il the manner and form in which they have complied with this order. Ix THE :.JATTER OF CALIFOImIA FRUIT EXCHANGE CONSENT ORDER, ETC., IX REGARD TO 'rue ALLEGED VIOLATION OF SEC. 2 (c) OF Tile CLAYTON ,\CT Docket C-136. Comp/'aint, J/ay 19G.'- Dcci8i.on lJaJj, 1962 COIl sent order requiring a Sacramento, Calif. . l1acker of fresh fruit to cease granting uulawful commissions or discounts on substantial .sales to some of its brokers and direct buyers purchasing for their own account for resale. COl\IPLA TNT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly described, has been and is now violating the provisions of subsection (c) of Section 2 of the Clayton Act, as amended (U. Title 15, Sec. 13), hereby issues its complaint., stating its charges with respe,ct thereto as follmvs :

\RAGRAl'H 1. Hespondcnt California Fruit Exchange is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its offce and principal place of business located at Sacramento, California with mailing address as Post Offce Box 2038, Sacramento, Calif.

PAn. 2. Respondent is now and for the past several years has been engaged in the business of packing, selling and distributing fresh fruit, such as peaches, plums, pears, apricots, grapes, apples, necta, rines, cherries and strawberries, all of ,,,which ate hereinafter sometimes referred to as fresh fruit and related products. Hesponc1cnt sells aud distributes its fresh fruit through brokers, ,Whole3alers, jobbers ancl commission merchants, as well as direct, to customers located in many sections of the United States. ,Vhen brokers are utilized in ma.king sales for it, respondent pays them for their services a brokerage 01' commission, usually at a. varying rate of i5 cents to 20 cent.s per , , ..

CALIFORNIA FRUIT EXCHA1 1201 1194 Complaint respresenting in any other manner that suell products ate made to order for the automobile of each purchaser. 1 tis furthe' ordered That the respondents herein shall, within sixty (60) days after service upon them of this order, file with the Commission a report in writing setting forth in data-il the manner and form in which they have complied with this order. Ix THE :.JATTER OF CALIFOImIA FRUIT EXCHANGE CONSENT ORDER, ETC., IX REGARD TO 'rue ALLEGED VIOLATION OF SEC. 2 (c) OF Tile CLAYTON ,\CT Docket C-136. Comp/'aint, J/ay 19G.'- Dcci8i.on lJaJj, 1962 COIl sent order requiring a Sacramento, Calif. . l1acker of fresh fruit to cease granting uulawful commissions or discounts on substantial .sales to some of its brokers and direct buyers purchasing for their own account for resale. COl\IPLA TNT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly described, has been and is now violating the provisions of subsection (c) of Section 2 of the Clayton Act, as amended (U. Title 15, Sec. 13), hereby issues its complaint., stating its charges with respe,ct thereto as follmvs :

\RAGRAl'H 1. Hespondcnt California Fruit Exchange is a corporation organized, existing and doing business under and by virtue of the laws of the State of California, with its offce and principal place of business located at Sacramento, California with mailing address as Post Offce Box 2038, Sacramento, Calif.

PAn. 2. Respondent is now and for the past several years has been engaged in the business of packing, selling and distributing fresh fruit, such as peaches, plums, pears, apricots, grapes, apples, necta, rines, cherries and strawberries, all of ,,,which ate hereinafter sometimes referred to as fresh fruit and related products. Hesponc1cnt sells aud distributes its fresh fruit through brokers, ,Whole3alers, jobbers ancl commission merchants, as well as direct, to customers located in many sections of the United States. ,Vhen brokers are utilized in ma.king sales for it, respondent pays them for their services a brokerage 01' commission, usually at a. varying rate of i5 cents to 20 cent.s per 1202 FEDERAL TRADE COlYDIISSION DECISIONS Decision and Order 60 F. package, depending on size and value, or from $40.00 to $60.00 per ca.rload. Respondent's annual volume of business in the sale and dist.ribution of fresh fruit is substantial. P AU. 3. In the course and conduct of its business over the past several years, respondent has sold and distributed and is now selling and distributing its fresh fruit in commerce, as "commerce" is defined in the aforesaid Clayton Act, as amended, to buyers located in the several states of the United Stat.es other than the St.ate of California in which TE'kJponrlent is located. Respondent transports, or causes such fresh fruit., when sold, to he transported from it.s place of business or packing plant in the State of Ca.lifornia, or from other places within the State, to such buyers or to the buyers' cust.omers located in various other states of the Unit.ed States. Thus there has been, at all times mentioned herein, a continuous course of trade in commerce in :mch fresh fruit across state lines between stlid respondent and the respective buyers of such fresh fruit.

PAR. 4. In the course and conduct of its busjness as aforesaid, respondent has been and is now making substantial sales of fresh fruit to some, but not all, of its brokers and direct buyers purchasing in their own name a.nd for their own account for resale, and on a large llumber of these sales respondent paid, granted or allowed, and is now paying, granting or allowing to these brokers and direct buyers on their o-.vn purchases, a commission, brokerage, or other compensation, or an allowance or discount in lieu thereof, in connection therewith.

PAH. 5. The acts and practices of respondent in paying, granting or allowing to brokers and direct buyers a. commission, brokerage, or other compensation, or an allowance or discount in lieu thereof, on t.their own purchase,s as above alleged and described are in violation of subsection (c) of Section 2 of the Clayton Act, RS amended (U. Title 15, Sec. 13).

DEOISION A D ORDER The Commission having heretofore determined to issue its complaint charging the respondent named in the caption hereof with violation of subsection (e) of Section 2 of the Clayton Act, as amended, and the respondent having been served with notice of said determination and with a copy of the complaint the Commission intended to issue, together with a proposed form of order; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional fact.s set forth in the complaint CALIFORNIA FRUIT EXCHk"GE 1203 1201 Decision and Order to issue herein, a stateluent that the signing of said agremnent is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as set forth in such complaint, a.nd waivers and provisions as required by the Commission rules; and The Commission, having considered the agreement, hereby accepts same, issues its complaint in the form contemplated by said agreement makes the following jurisdictional findings, and enters the following order:

1. Respondent California Fruit Exchange is 'a corporation organized, existing and doing business under and by virtue of the la "\vs of the State of California, with its offce and principal place of business located at Sacramento, Calif., with mailing address as Post Offce Box Z038 Sacramento, Calif.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It is ordered That the respondent California Fruit Exchange, a corporation, and its offcers, agents, representatives and employees, directly or through any corporate or other device, in connection with the sale of fresh fruit or related products, ill c01111ne1'c8 , as "commerce is defined in the Clayton Act, as amended, do forthwith cease and desist from:

Paying, granting, or allowing, directly or indirectly to any buyer 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 as a commission brokerclge, or other compensation, or any allowance or discolmt in lieu thereof, upon or in COl1l1ection with any sale of fresh fruit or related products to such buyer for his own aCcOlmt. It is further ordered That the respondent herein shall, within sixty (60) days after service upon it of this order, file with the Commission a report in writing setting forth in detail themmmer and fonn in which it has complied with this order.

719-603--54-- , , 1204 FEDERAL TRADE CO:\:\ISSION DECISIONS Complaint 60 F.