Advisory opinion letter to Mr. Sura: a contemplated acquisition by Maule Industries, Inc.

SEPTEMBER 30, 1970 Dear Mr. Sura:

We are seeking an opinion regarding a contemplated acquisition by Maule Industries, Inc.

As of April, 1970, Maule Industries is a cement producer with a new mill at Miami, Florida, producing ata rated capacity of 2.4 million barrels per year. This mill was primarily constructed to supply Maule Industries’ operations in ready-mix and other concrete products which the Company has been selling since 1920.

All of the cement production at this time is going into Maule or Maule-associated operations, primarily in the ready-mix and block producing plants.

Prior to the construction of the mill, Maule had been attempting to establish itself in concrete producing markets further North in Florida as well as in the Orlando area. We had, to that extent, been negotiating with a company called Burnup & Aims in Brevard County, Florida, with plants at Melbourne and City Point in that county. Since 194K 470-536—73——105

1648 FEDERAL. TRADE COMMISSION DECISIONS we have been negotiating on and off with the Burnup & Sims corporation but had never concluded an agreement due to differences in our opinions as to valuation of the operations. Burnup & Sims has in the last two years become a public corporation, over the counter, and has specialized in construction work and diversified into CATV, during which time they have been in contact with us to sell to us their last remaining concerte operation, 1.e., the Brevard County plant.

To the best of our knowledge, Brevard County is serviced by three concrete-producing firms: Rinker Materials, considered the largest producer of concrete in Florida, and operates four plants in Brevard County; Dixie Concrete, a small producer operating in Cocoa, and Burnup & Sims operating only in Melbourne with a dormant plant at City Point, Florida. Consequently, the main plant that we are interested in, the Melbourne plant, is in an area serviced by only one other producer, Rinker Materials. Were Burnup & Sims to close the Melbourne plant, there would be only one remaining plant. Burnup & Sims purchases 100% of their cement requirements from the Florida Portland Cement Company and has purchased at least 95% of their cement requirements from the Florida Portland Cement Company since 1963. The cement purchases by Burnup & Sims runs about 50,000-80,000 barrels per year.

Maule is now in serious negotiation with the Burnup & Sims Company wherein we would expect to acquire their Brevard plants, i.e., the Melbourne plant and the inactive City Point plant. We would, of course, then use our own cement in producing ready-mix and block in this new operation, and the operation will continue to use the Mauleproduced aggregate which we have been selling to them for many years.

_ Maule is a Florida-based corporation, manufacturing and selling its products only in the State of Florida and specifically the southeastern portion of the State. We wish to acquire this Brevard County operation which is as I have related above, one that we have been negotiating for since 1965. We would very much appreciate your opinion as to whether we would be within the confines of the Federal Trade Commission rulings

in acquisitions such as this.
Very truly yours,
Mave Invvstriss, Inc.,
(S) A. L. Sarrer,
Executive Vice President, General Manager.

ADVISORY OPINIONS WITH REQUESTS THEREFOR 1649 Proposal To Provide Packages of Food and Grocery Products With Slide Projection Advertising of Their Products in Retail

Outlets (File No. 713 7022)
Opinion Letter
Marcw 12, 191
Drar Mr. Casu:

This is in further response to your request, of October 28, and December 19, 1970, for an advisory opinion on behalf of your client, Projected ’Adver tising Network, Inc., concerning its proposal to provide packagers of food and erocery products with slide projection advertising of their products in retail outlets. As the Commission understands your submittal, your client proposes to install display devices capable of exposing 140 photographic slide advertising messages at fixed intervals in retail outlets. Supplieradvertisers w ily purchase advertising space on a slide package and, in turn, your client will reimburse participating retailers on the basis of “the number of transactions and dollar volume per store during a specified period as that volume is determined by the industry standards.” The plan contemplates utilization of projection equipment of.a type useable in various retail outlets and an appropriate alternative for those outlets, which for practical business reasons, are unable to participate in the primary program. The Commission has given careful consideration to your request and has concluded that implementation of the promotional program by your client in the manner described by your correspondence would not warrant a proceeding under the laws it administers, providing the following conditions and caveats are observed : 7 1. Since the proposed promotional assistance plan calls for your client’s performance of certain obligations which are normally performed by suppliers, Guide 13 of the “Guides for Advertising Allowances” (see enclosed copy) must be complied with by your client and by all participating suppliers.

2. Since some products sold by retailers of food are also sold by non-grocery store outlets, the proposed promotional assistance plan must be made available to all retail outlets, whether grocery or nongrocery in nature, which may be competitive in the resale of a participating supplier” S products. 3. Since it is unlikely that all retail outlets in 4 any trading area will sell the products of all participating suppliers, participating retailers

must be given the prior opportunity to prohibit the advertising of a product not offered for sale in their stores. 4. Since the Commission cannot now know how the proposed plan will operate in fact, your client is directed to submit a written report to the Commission within six months after institution of the program, indicating the manner and extent to which it is being implemented. You are further advised it is the Commission’s view that your client, as the promoter of the subject promotional assistance plan, must make it clear to each supplier and each retailer that even though Projected Advertising Network, Inc., has been employed to implement the plan, it remains the supplier’s responsibility to take all reasonable steps so that each of his customers who competes with another in reselling his products is offered either an opportunity to participate in your client’s plan on proportionally equal terms or the appropriate alternative if the customer is unable, as a practical matter, to participate in the primary plan; if not, the supplier, the favored retailer and your client may be acting in violation of Sections 2(d) or 2(e) of the amended Clayton Act and/or Section 5 of the Federal Trade Commission Act.

By direction of the Commission.
Supplemental Letier of Request
December 19, 1970