Ideal Macaroki Company

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IN TH MATIR OF IDEAL MACAROKI COMPANY COXSEKT Order, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2 (d) OF TI-IE CLAYTON ACT Docket 0-'/'66. Complaint, June 80, 1.rJ- Decision, June 30. 1.961, Consent order requiring a Bedford Heights, Ohio, manufnctnrer ()f macaroni macaroni product, egg products. sauces and other food products--selling to wholesalers, independent and chain retailers, restaurants, institutions and food processors in Ohio and Pennsylvania-to cease discriminating in price in violation of Sec. 2 (d) of the Clayton Act by such practices as making ilyailable to tbe Solon, Ohio Diyision of a national grocery chain operating 70 retail stores in Ohio and Pennsylvania, payments and allowances amounting to approximately $8 000 including (1) free merchandise for store openings and other promotional purposes, (2) a "stamp promotion" among other promotional discounts and allowances, (3) payments and allowances for newspaper and television advertising, and (4) payments for coupon sales unless nch pa:vments and allowances are available on proportionally equal tCI'm,. to all other customers of l'espolHlcnt competing in the sale of sucb proclncts.

COMPLAINT The Federal Tnsc1e Commission, having reason to believe that the party respondent name.d in the caption hereof, and hereinafter more particularly designated and desc.ribed, has violated, anc11s now violating the provisions of subsection (d) of Section 2 of the Clayton Act as amended (V. C. Title 15 , Sec. 13), hereby issues its complaint E-tating its charges with respect thereto as follows: PARAGRAPH 1. Respondent Ic1cnJ :Macaroni Company is a. corporation organized, existing, and doing business under and by virtue of the 1236 FEDERAIJ TRADE COMMISSION DECISIONS Complaint 65 F.

laws of the State of Ohio, with its office and principal place of business located at 26001 Richmond Road, Bedford Heights, Ohio. PAR. 2. R.respondent has been and is now engaged in the manufacture, sale and distribution of macaroni, macaroni products, egg products, sauces and other food products. Respondent sells its products to a large number of customers located principally in the states of Ohio and Pennsylvania, purchasing such products for use, consumption. or resale. Respondent's customers include wholesalers, independent retailers, retail chain stores, restaurants, institutions and food processors. Hesponclent:s sales of its products are substantial, exceeding 000 000 in 1962.

PAll. 3. Respondent sells and causes its proch10ts to be transported from its manufacturing plant and principal place of business in the, State of Ohio to purchasers located in other States of the 17united States. There has been at all times mentioned herein a continuous course of trade in said products in commerce, as "commerce" is defined in the Clayton Act, as amended.

PAR. 4. In the course and conduct of its business in commerce, rcspondent sens its products of like grade and quality t.o purchasers who are in substantia.l competition with each other in the resale and distribution of such products \yjt11in t.he trading are.as where said purchasers are located.

PAn. 5. In the course and conduct of Hs business in commerce and part icularly since 1959, respondent has paid or contracted for t.he payment of something of value to or for the benefit of some of its customers as compensation or in considerH,tion for services or faciJit.ics furnished by or through such customers in connection with their offering for sale or sale of products sold to them by respondent, anrl sllch payments have not been made available 011 proportionally equal terms to all other customers competing in the sa.le and distribution of respondent' s products.

For example, during 1962 respondent made availab1c to the Solon Ohio Division of a national retail grocery chain, operating seventynine retail grocery stores in Ohio and Pennsylvania through the a.foresaid Division, various payments and allmvances amounting to approximately eight thousand dollars ($8 000). These payments and allowances included, but were not limited to: (1) free merchandise for store openings and other promotional purposes; (2) discounts or allowances for vflrious promotional purposes including a "stamp p1'o- 1110tion; (3) payments and allowances for 118\VSpaper and television advert.ising; and (4) payments and allo\vances for coupon sales. Respondent has not offered to pay, or paid, or otherwise made such payments or allowances available on proportionally equal terms to IDEAL :\IACARONI CO. 1237 1235 Decision and Order all customers competing with said favored national retail grocery chain customer.

PAR. 6. The acts and practices of respondent, as alleged hemin, are in violation of subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigatiou of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Restmint of Trade proposed to present to the Commission for its consideration and which, if issued by the COll11nissioll, would charge respondent with via. lation of subsection (d) of Seotion 2 of the Clayton Act, as amended; and The respondent and counsel for the Commission having thereafter executed an agreement conta.ining a consent order, an admission by the respondent of a11 the jurisdictional facts S0t forth in the aforcsaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated as alleged in such complaint, and waivers and provisions as required by the Commission rules; and The Commission having reason to believe that the respondent has violated subsection (d) of Section 2 of the Clayton Act, as amended; and having determined that complaint should issue stating its charges in that respect; and having determined that the agreement would afford an adequate basis for appropriate disposition of the proceeding; aud The Commission, subsequent to the foregoing determinat.ions, having issued on March 12, 1964, its order accepting the aforesaid agreement but deferring service on the respondent of the decision and order of the Commission in this proceeding until issuance by the Commission of its decision and order in a related Commission proceeding in which Notice of Detcnnination to issue complaint was directed by the Commission on such date; and the Commission having now determined tllat such condition is met inasmuch as the decision and order in disposition of such related proceeding, namely, In the Matter oj Procino-Rossi GOTpol'ation Docket No. C-765 (p. 1230 hereina, is issuing simultaneously with the COJ1nission s action herein; , therefore, the Commission hereby issues its complaint :in this proceeding in the form contemplated by the aforesaid agreement makes the following jurisdictional findings, and enters the following order:

, ,, 1238 FEDERAL TRADE COJ\Tl\lISSIO:\T DECISIOKS Syllabus 65 F.

1. Ideal 1facaroni Campa,ny is a corporation organized, existing and doing business under and by virtue of the laws of the State of Ohio ith its offce and principal place of business located at 26001 Richmond Road, Bedford Heights, Ohio.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDER It i8 ordered That respondent Ideal Macaroni Company, a corporation, and its offcers, employees, agents and representatives, directly or through any corporate or other device, in or in connection with the offering for sale, sale or distribution of any of its products in commerce, as "commerce" is defined in the Clayton Act, as amended, do forthwith cease and desist from:

Paying or contracting for the payment of anything of value to or for the benefit of, any customer of respondent as compensation or in consideration for any services or facilities furnished by or through such customer in cOlmection with the offering for sale, sale or distribution of respondent's products, unless such payment or consideration is made available on proportionally equal terms to aU other cllstomers competing in the distribution of such products.

It i8 further ordered That the respondent hereiu 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 it has complied with this order.

Ix THE I\L-\T'TEH OF GIOIA :lL\.CARONI COMPANY, INC.

CONSENT ORDER , ETC. , IX REGARD TO 'rife AU.EGED VIOLATION OF SEGS. 2(a), (d) AND (e) 01- THE CUYTON ACT Docket 0-767. Oomplaint, June 30, 1964-Decision, June 30 , 1964 Consent order requiring a Rufalo, N. , manufacturer of macaroni, macaroni products, sauces and prepared foods-sellng to a large number of wholesalers, independent retailers and chain stores in ew York, Pennsylvarua Ohio, Illinois, and Vermont-to cease discriminating in price between different purchasers by, for example, granting discount to a retail food chain but not to the chain s competitors, in violation of Sec. 2(a) of the Clayton Act; by paying a substantial amount to the operator of a radio station to install 1(;\'1 radio receivers in the stores of some of its retail food chain cu tomeI'S which transmitted music and from time to time adverti ed its prod- GIOIA MACARONI CO, ) IKC. 1239 1238 Complaint nets, and employing female "mercbandisers " to a:5 i."t tbe stores receiving the Heam Cast" service, wl1ile not offering proportionally equal serdces and payments to competiton of favored chain, in violation of Sec. 2(d): and by furnisbing demonstrators in business places of certain customers while not furnishing such senices to all competing purchasers on proportionally equal terms, in violation of Sec. 2(e).

C01\PL.UXT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly designated and described, has violated, and is now violating the provisions of subsections (a), (d) and (e) of Section 2 of the Clayton Act, as amended (U. C. Title 15, Sec. 13), hereby issues its complaint, stating its charges with respect thereto as follows: COUNT I PARAGRAH 1. Respondent Gioia Macaroni Company, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of N ew York, with its offce and principal place of business located at 1700 Elmwood Avenue, Buffalo, New York. PAR. 2. Respondent has been and is now engaged in the manll facture, sale and distribution of macaroni macaroni products, sauces and prepared foods. Respondent sells these products toa large number of customers located in the States of New York, Pennsy Jyania, Ohio Illinois and Vermont. Respondent' s customers include wholesalers retailers and retail chain stores who purchase these products for resale. Respondent's sales of its products are substantial, exceeding 000 000 annually.

PAn. 3. Respondent manufactures these products in Buffalo, New York and Odessa, DehLware and ships them to purchasers in other states of the United States. There has been at all times mentioned herein a continuous course of trade in said products in commerce, as commerce" is defined in the Clayton Act, as amended. PAR. 4. In the course and conduct of its business in COIDnerce, and particularly since 1958, respondent has been, and is now, discriminating in price between different pure-hasers of its products of like grade and quality by selling said products to some purchasers at higher and less favorable prices t.han the same products are- sold to other purchasers who are in competition with the purchasers paying the higher pl'ces.

PAIL 5. For exa,mple, in one trading area in the State of Ohio, re sponclent granted a discoWlt on its macaroni and macaroni products to a retail food chain and did not grant said discount to other purchasers of products of like grade And quality who compete with the , \\ 1240 FEDERAL TRADE CO:\IISSIQX DECISIONS Complaint 65 F. T.

favoreel retail food chain in the sale and distribution of respondent' products. The purchasers not receiving said discount therefore paid higher net prices for respondent's products than the favored retail food chain receiving the aforesaid discount. PAR. 6. The effect of sllch discriminations in price made by respondent in the sale of its products, as hereinbefore set forth, may be substantially to lessen competition or tend to create a monopoly in the lines of comnlerce in which the favored purchasers from respondent are engaged, or to injure, destroy or prevent competition with the favored purchasers from respondent who receive the discriminatory lower prices.

AR. 7. The discriminations in price Inade by respondent in the sale of its products, -as hereinbefore alleged, are in violation of subsection (a) of Section 2 of the Clayton Act, as amended by the Robinson- Patman Act.

COUNT II PAIL 8. Paragraphs One through Three of Count I hereof are hereby set forth by reference and made a part of this Count II as fully and with the same effect as if quoted here verbatim. PAR. 9. In the course and conduct of its business in con1111e1'ce, and particularly since 1958, respondent paid or contracted for the. paynlcnt of something of value to or for the benefit of SOlne of its customers as cOlllpensation or in consideration for services or facilities furnished by or through such customers in connection with their offering for sale or sale of products sold to them by respondent, and such payments were not made available on proportionally equal terms to all other customers competing in the sale and distribution of respondent' products.

PAR. 10. For example, respondent has provided some of its retail food chain customers with a promotional service known as "Beam Cast". Respondent pays a substantial amount of nloney to a company known as Beam Cast, Inc. which owns an FJf radio station. F:\f radio receivers are installed by Bea,m Cast, Inc. in the stores owned and operated by the said retail food chain cust.omers. The FM: radio station then transmits music into the stores of the said retail food chain customers Ilnd from time to time advertises respondent:s products which are available for sale in the stores.

Beam Cast, Inc., also employs female "merchandisers" who go into the stores of the said retail food chains which are given the "Beam Cast" service at vl11'ious time intervals and check respondent' s stock on the shelves, rearrange the stock, check inventory, and provide the stores with advice on how to move respondent:s products. GIOIA :.rACAHONI CO, ) INC. 1241 1238 Decision and .order H.respondent has not ofi'el'cd the "Beam Cast:) service to other cus tomeI'S whom compete with the retail food chains which receive "Beam Cast", nor has it made Rya.ilable any other proportionally equal promotional service or facility to other customers who compete with the s"id retail food chains in the sale andclistribution of products of like grade and quality purchased from respondent. PAR. 11. The a,cts a.nd practices of respondent, as alleged herein, are in violation of subsection (d) of Section :2 of the Clayton Act, as lme,nc1ed by the Robinson-Patman Act.

CO"GXT III PAR. 12. Paragraphs One through Three of Count I hereof are hereby set forth by reference and made a part of this Count III as fully and with the same effect as if quoted here 'Ferbatim. PAIL 13. In the course and conduct of its business in commerce, and IJetrticula,rly since 1058 respondent has discriminated in favor of certain of its purchasers buying its products by contracting to furnish or furnishing, or by contributing to the furnishing of, such f l\COred purchasers services or facilities c0ll1cetecl with the handling sale, or offering for sale of such products so purchased while not acc.ording such services or facility.ies to all other competing purchasers on proportionally equal terms.

PAR. 14. As illustrative of such practices, respondent has furnished certain of its purchasers the services and :facilities of special personnel known as "demonstrators ,\"while not according such services and facilities to ll other competing purchasers on proportionally equal terms. Such personnel, compensated and furnished by respondent a re installed in the places of business of fa voreel purchasers to assist 1n promoting the sale of respondent' s products to customers of sa.id favored purchasers.

PAR. 15. The acts and practices of respondent, as alleged herein are in violation of subsection (e) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

DECISION DW ORDER The Federal Trado Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and t.he respondent having been furnished thereafter with a copy of a draft of complaint which the Bureau of Restraint of Trade proposed to present to the Commission for its consideration and \which if issued by the Commission, would charge respondent with violation of subsections (a), (d) and (e) of Section 2 of the Clayton Act, as amended; and 313-121--70-- FEDERAL TRADE I:\ISSION DECISIO1242 Decision and Order 65 F.

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 facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute any admission by the respondent that the law has been violated as alleged in such complaint and waivers and provisions as required by the Commission rules; and The Commission having reason to believe that the respondent has violated subsections (a), (d) and (e) of Section 2 of the Clayton Act as amended; and having determined that complaint should issue stating its charges in that respect; and having determined that the agreement would afford an adequate basis for appropriate disposition of the proceeding; and The Commission, subsequent to the foregoing determinations, having issued on :March 12, 1964, its order accepting the aforesaid agreement but deferring service on the respondent of the decisiou and order or the Commission in this proceeding until issuance by the Commission or its decision and order in a rela.ted Commission proceeding in which Notice of Determina.tion to issue complaint was directed by the Commission on such date; and the Commission having 11mv determined that such condition is met inasmuch as the decision and order in disposition of such related proceeding, uamely, In the Matter of P,' ocino-Rossi C01'l'oratio71 Docket No. C--65lp. 1230 hereina, is issuing simultaneously with the Commission s action herein; Now, therefore, the Commission hereby issues its complaint in this proceeding in the form contemplated by the aforesaid agreement, makes the following jurisdictional findings, and enters the following order:

1. Gioia Iacaroni Con1pany, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its offce and principal place of business located at 1700 EJmwGod Avenue, Buffalo, New York.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding lmd of the respondent. ORDER lacaroni Company, Inc., a cor- It is ordered That respondent Gioia di- poration, and its offcers, employees, -agents and representatives, rectly or t.through any corporate or other device, in or in connection with the offering for sale, sale or distribution of any of its products in commerce, a,s "commerce" is defined in the Clayton Act, as amended PRI)/CE MACARONI MANUFACTURING CO. 1243 1238 Syllabus c1iscdminating, directly or in-do forthwith cease and desist from directly, in the price of such products of like grade and quality: By selling such products to any purchaser at net prices higher than the net prices charged any other purchaser \"ho C0111petes in the resale or distribution of Sl1eh products with the purchaser paying the higher price.

It i8 That respondont Gioia lacaroni Company, f"TtheT ordered Inc., a corporation, and its offcel's, employees, agents and representatives, directly or through any corporate or other device, in or in connection with the -:ffering for sale, sale or distribution of any of its products in comnlerce, as ': C01111181'Ce :' is defined in the Clayton Act as amended, do forthwith cease and desist from: 1. Paying or contracting for the payment of anything of value , 01' for the benefit ally customer of respondent as compensation or in consideration fat any services or facility.ies furnished by or through such customer in connection with the offering for sale sale or distribution of respondents products, unless such payment or consideration is made available on proportionally equal terms to all other customers compet.ing in the dist.ribution of such products; 2. Furnishing, contracting to fUTlllsl1 , or contributing to the furnishing of services or facilities in conne.ction with the lutndlillg processing, sale or offering for sale of respondent' s products to any purchaser frolll respondent of such products bought for resale when such sen jces or facilities ate not accorded on proportionally equal terms to all other purchasers from respondent who resen such products in competition with such purchasers who receive such services or facilities.

It is flll'that' ordel'ed That the respondent herein shall, within sixty (60) days after service upon it of this order, fie with the Commission a report in Iyriting setting forth in detail the manner and form in which