Shriver Co., B. F

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IN THE MATTER OF B. F. SHRIVER COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2(C) OF AN ACT OF CONGRESS APPROVED OCT. 15, 1914, AS AMENDED BY AN ACT APPROVED JUNE 19, 1936 Docket 6217. Complaint, Sept. 18, 19,#-Decision, Oct. 23, 1944 Where a corporation engaged in packing and canning corn, peas, beans, lima beans, succotash, tomatoes, asparagus, beets, and other vegetable products, and in the interstate sale and distribution thereof- Paid or granted, directly or indirectly, brokerage or commissions, compensation, allowances, or discounts in lieu thereof, to buyers of such products upon purchases made in their own names and for their own accounts: Held, That such practice was in violation of subsection (c) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act Mr. Edwards. Ragsdale for the Commission.

Complaint The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof and hereinafter more particularly designated and described, since June 19, 1936, has violated and is now violating the provisions of subsection (c) of Section 2 of the Clayton Act (U.S.C. Title 15, Sec. 13) as amended by the Robinson-Patman Act, approved June 19, 1936, hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH I. Respondent, B. F. Shriver Co., is a corporation, organized and existing under the laws of the State of Maryland, with its principal office and place of business located at Westminster, Md. The respondent also operates plants located at Westminster and New Windsor, Md., and Littlestown, Pa.

PAR. 2. Respondent, B. F. Shriver Co., is now engaged, and for many years prior hereto, has engaged in the business of packing, canning, distributing and selling canned corn, peas, beans, lima beans, succotash, tomatoes, asparagus, beets, and other vegetable products (all of which are hereinafter called vegetable products), in its own name and for its own account for resale, directly to buyers located in States other than the State in which respondent is established. As a result of respondent's instructions, such vegetable products are shipped and transported across State lines to such buyers, who are located in various States of the United States other than the State where the respondent is established. The respondent, to distinguish its vegetable products from the vegetable products sold by competitors and to facilitate sales, utilizes registered trade-marks and brands for the various types and grades of vegetable products it sells. Among and representative of respondent's brands are:

Complaint 39 F. T. C.

Blue Ridge New Windsor A No. I World's Favorite Lady Host Shriver PAR. 3. The respondent, since June 19, 1936, in connection with the interstate sale and distribution of vegetable products has been and is now paying or granting or has paid or granted, directly or indirectly, commissions, brokerage or other compensation or allowances or discounts in lieu thereof to buyers of said vegetable products sold under its own labels, unlabeled and under buyers' labels.

PAR. 4. The respondent, since June 19, 1936, has distributed and sold and distributes and sells vegetable products directly to certain buyers in interstate transactions as aforesaid and has paid to such buyers commission or brokerage fees on purchases made by them in their respective names and for their respective accounts. The respondent's method of distribution and sale, as hereinafter described, is representative of the sales methods of a number of East Coast distributors. The buyers above referred to customarily designate themselves as "brokers," "merchandise brokers," or as "primary distributors," although they are known to the trade as "buying brokers" or "speculative brokers." Such "buying brokers" or "speculative brokers" customarily operate by placing orders for merchandise with those sellers, and only with those sellers, who will grant and pay them commissions or brokerage fees on their own purchases. Some such buyers are large scale buyers and sellers of vegetable products distributed under their own private brands, which brands·usually show the name and address of the buyer, but not of the packer, and identify the merchandise as being the product of the particular buyer who owns the label. · Some such buyers customarily purchase their private brand vegetable products from respondent and many other sellers and often during a given season, after shopping the market, will purchase such commodities under the same private brands from several competing sellers, placing their orders where they are able to secure the most favorable prices and terms. Such buyers place their orders for merchandise with respondent and other sellers, who, on receiving and accepting such orders, deliver the merchandise to a common carrier for delivery, but require that the buyer pay the purchase price as a condition precedent ot the delivery of the merchandise. If such merchandise is lost or damaged in transit, such buyers file claims in their own names and collect damages from the carrier for their own account.

On receipt of the merchandise, such buyers insure such merchandise and warehouse it in their own warehouses or in public warehouses, and thereafter generally utilize the warehouse receipts covering the merchandise, together with the insurance contract, as collateral or security to obtain bank loans.

Such buyers mask these buying operations under the fictionalized desig· nation of "brokers," "merchandise brokers," or "primary distributors," for the sole purpose of coloring the name and method of their buying operations in order to collect commissions or brokerage fees from respondent and from other sellers who will pay such buyers commissions or brokerage fees on their own purchases. notwithstanding the fact that it is well known B. F. SHRIVER CO, 399 397 Findings to be the custom of such buyers to invoice and sell such merchandise in their own names, for their own accounts, at their own prices, and on their own terms, and to assume full and complete credit risks. PAR. 5. The acts and practices of the respondent in promoting sales of vegetable products by paying to buyers, directly or indirectly, commissions, brokerage or other compensation and allowances or discounts in lieu thereof, as set forth above, are in violation of subsection (c) of Section 2 of the Clayton Act, as amended.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress, entitled ~~An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914 (the Clayton Act), as amended by an Act of Congress approved June 19, 1936 (the Robinson- Patman Act) (U.S.C. Title 15, Sec. 13), the Federal Trade Commission on September 18, 1944, issued and subsequently served its complaint in this proceeding upon the party respondent named in the caption hereof, charging said respondent with violation of the provisions of subsection (c) of Section 2 of said Clayton Act, as amended. After the issuance of said complaint the respondent filed its answer in due course, which answer admitted all the material allegations of fact set forth in said complaint and waived all intervening procedure and further hearing as to said facts. Thereafter; this proceeding regularly came on for final hearing before the Commission on said complaint and answer, and the Commission, having duly considered the same and being now fully advised in the premises, makes this its findings as to the facts and its conclusion drawn therefrom. FINDINGS AS TO THE FACTS PARAGRAPH 1. The respondent, B. F. Shriver Co., is a corporation, organized and existing under the laws of the State of Maryland, with its principal office and place of business located at Westminster, Md. Respondent also operates plants located at Westminster and New Windsor, Md., and Littlestown, Pa.

PAR. 2. Respondent is now, and for many years prior hereto, has been engaged in the business of packing and canning corn, peas, beans, lima beans, succotash, tomatoes, asparagus, beets, and other vegetable products, and selling and distributing such products to buyers located in various States of the United States other than the States in which respondent maintains places of business, such products being shipped and transported across State lines to such buyers.

PAR. 3. Respondents since June 19, 1936, in connection with the interstate sale and distribution of its products, has paid or granted, directly or indirectly, brokerage, or commissions, compensation, allowances, or discounts in lieu thereof, to buyers of such products upon purchases made by such buyers in their own respective names and for their own respective accounts. · The record indicates that this practice has now been discontinued by respondent.

Order 39 F. T. C.

CONCLUSION The practice of the respondent, as herein found, was in violation of sub· section (c) of Section 2 of the Clayton Act, as amended. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commission and the answer of the respondent, which answer admits all of the material allegations of fact set forth in said complaint and waives all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to' the facts and its conclusion that said respondent has violated the provisions of subsection (c) of Section 2 of the Act of Congress entitled," An Act to supplement existing laws against unlawful restraints and monopolies, and for other purposes," approved October 15, 1914 (the Clayton Act), as amended by an Act of Congress approved June 19, 1936 (the Robinson-Patman Act) (U.S.C. Title 15, Sec. 13).

It is ordered, That the respondent, B. F. Shriver Co., a corporation, and its officers, agents, representatives, and employees, directly or through any corporate or other device, in connection with the sale and distribution of vegetable products or other commodities in commerce, as "commerce" is defined in the Clayton Act, do forthwith cease and desist from: Paying or granting to any buyer, directly or indirectly, anything of value as brokerage, or any commission, compensation, allowance, or discount in lieu thereof, upon purchases made for such buyer's own account. It is further ordered, That the respondent shall, within 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.

ARTHUR VON SENDEN CO., INC. 401 Syllabus