Mccormick & Company, Inc.

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF l\fcCORMTCI\: & COl\IP ANY, INC.

CONSENT ORDER, ETC., IN REGAPJ) TO THE ALLEGED VIOLATION OF SEC. 2 (d) OF THE CLAYTON ACT Docket 61,70. Complaint, Nov. 1955-Decision, Sept. , 1957 Consent order requiring a seller in Baltimore, Md. of spices, extracts, teas, coffees, and condiments 011 a nation-wide basis, with sales for 1954 approaching $44 000,000, to cease violating Sec. 2 (d) of the Clayton Act through such practices as payment of a sum of money to a Philadelphia chain of food stores as compensation for advertising respondent' s products while not offering proportionally equal allowances to all competitors of the favored customer.

Before 1/1 r. FTan.7~ H ier hearing examiner. Mr. Andre1v O. Good/lope and 1/ir. F'I'ed'lic T. Suss for the Commission.

Anderson, Barnes Doe by 111'1'. G. O. A. Anderson of Baltimore :Md. , and 111'1'. Ja'ln~s TV. Cassedy, of ,Vashington, D. , for respondent.

COMPLAINT The Federal Trade Commission, having reason to believe that the party respondent named in the caption hereof, and hereinafter more particularly described, has violated the provisions of subsection (d) of Section 2 of the Clayton Act (V. C. Title 15, Sec. 13), as amended by the Hobinson-Patman Act, hereby issues its complaint stating its charges with respect thereto as follows: P ARAGHAPI-I 1. R.respondent, l\lcCormick & Company, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of :Maryland, with its principal office and place of business located in Baltimore, l\laryland. PAR. 2. Respondent is now and has been engaged in the business of producing and selling food products. R.respondent's principal products are spices, extracts, teas, coffees and condiments. Respondent sells such products to the retail grocery trade through grocery wholesalers, and, in addition, respondent sells direct to retail chain store organizations. Respondent sells spices and extracts in the eastern part of the United States under the trade name ":M:cCormick and sells spices, extracts and coffees in the western part of the United States under the trade name "Schilling. Sales made by respondent of its products are substantial, amounting in the fiscal year ended November 30 , 1954 , to $43 764 725.

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336 FEjDEjRAL TRADE COMMISSION DECISIONS Decision 54 F. T. C. PAl'.. 3. In the course and conduct of its business, respondent has engaged in commerce., as "commerce" is defined in the Clayton l\..ct as amended. Respondent ships its products, or causes them to transported, from its principal place of business in the State of :Mary land to customers located in the same and in other States of the United States and the District of Columbia. m. 4. In the course and conduct of its business in commerce respondent has paid, or contracted for the payment of something vf value to or for the benefit of some of its customers as compensation or in consideration for services or facilities furnished bv through such customers in connection with their ofiering 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 distribution of respondent's products. PAR. 5. For example, during the year 1955, respondent contracted to pay and did pay the sum of $3 750.00 to the Food Fair Stores Inc., of Philadelphia, Pennsylvania, as compensation or as an allowance for advertising or other service or facility furnished by or through such customer in connection with its o:fie~'ing for sale or sale of products sold to it by the respondent. Such compensation or allowance was not oflerec1 or otherwise made available. by respondent on proportionally equal terms to all other customers competing in the sale and distribution of respondent's products with Food Fair Stores, Inc.

P..\H. 6. The acts and practices of the respondent, as alleged above violate subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

INITIAL DECISION BY THANK HIER HEARING EXAl\IINEH Pursuant to the provisions of subsection (d) of Section 2 of the Clayton Act (U. C. Title 15, Sec. 13), as amended by the Robinson- Patman Act, the Federal Trade Commission on November 21 , 1955 issued and subsequently served its complaint in this proceeding against respondent :McCormick & Company, Inc., a corporation existing and doing business under and by virtue of the laws of the State of l\faryland, with its office and principal place of business located at Baltimore, :Maryland.

One hearing was held after which there was, on August 2, 1957 submitted to the undersigned hearing examiner an agreement between respondent and counsel supporting the complaint providing for the entry of a consent order. By the terms of said agreement respondent admits all the jurisdictional facts alleged in the eom- McCORMICK & CO. , INC. 337 335 Order plaint and agrees that the record may be taken as if findings of jurisdictional facts had been duly m~de in accordance with such allegations. By such agreement, respondent waives any further pro~ cedural steps before the hearing examiner and the Commission; waives the making of findings of fact and conclusions of law; and waives all of the rights it may have to challenge or contest the validity of the order to cease and desist entered in aeeordance with this agreement. Such agreement further provides that it disposes of all of this proceeding as to all parties; that the record on which this initial decision and the decision of the Commission shall be based shall consist solely of the complaint and this agreement; that the latter shall not become a part of the ofllcial record unless and until it becomes a part of the decision of the Commission; that the agreement is for settlement purposes only and does not constitute an admission by respondent that it has violated the law as alleged in the complaint; and that the following order to cease and desist may be entered in this proceeding by the Commission without fur':' ther notice to respondent, and, when so entered, it shall have the same force and effect as if entered after a full hearing, and may be altered, modified, or set aside in the manner provided for other orders; and that the complaint may be used in construing the terms of the order.

The hearing examiner having considered the agreement and proposed order, and being of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the agreement is hereby accepted, the following judsdictional findings made, and the following order issued.

Respondent J\1cCormick & Company, Inc., is a corporation existing and doing business under the laws of the State of l\iary land with its ofi-ice and principal place of business located at Baltimore ~Maryland.

The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent. ORDEI~ It is o?'de1' That respondent J\1cCormiek & Company, Inc. , a corporation, its officers, employees, agents, and representatives, dire,ctly or through any corporate or other device, in or in connection with the sale of spices, extracts, teas, coffees, condiments and other products in commerce, as "commerce is defined in the aforesaid Clayton Act, as amended, do forthwith cease and desist from: l\laking or contracting to make, to or for the benefit of any customer, any payment of anything of value as compensation or in Decision 54 F. T. C.

consideration for any advertising or other services or facilities furnished by or through such customer, in connection with the handling, offering for resale, or resale of spices, extracts, teas, coffees condiments and other products sold to him by respondent, unless such payment is affirmatively offered or otherwise made available on proportionally equal terms to all other customers competing in the distribution or resale of such spices, extracts, teas, coffees, concements and" other products.

DECISION OF THE COl\Il\IISSION AND ORDER TO FILE HE PORT OF OOl\IPLIANCE . Pursuant to Section 3.21 of the Commission s Rules of Practice the initial decision of the hearing examiner shall~ on the 17th day of September, 1957 become the decision of the Commission; and accordingly:

1 t i.s O?yle1' That the respondent herein shall, wi thin sixty (60) days after service upon it of this order, file ,,'ith the Commission a report in writing setting forth in detail the manner and form in which it has complied with the order to cease and desist. KRASNOW BELT CO. , INC., ET AL. 339 Decision