Ward Baking Company

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IN Tile J\A TTER OF WARD BAKING CQ;IPANY CONSi' NT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2(d) OF 'IIIi' CLAYTON ACT Dockct 6833. Complain!. , July 1957-lJeci s1:0?l FelJ. , 1959 Cement order requiring a baking corporation in New York City, with net sales in 1956 exceeding $100 000 000, to cease discriminating in price in violation of Section 2(cl) of the Clayton Act by granting promotional allowances to some customers but not to their competitors and not on proportionally equal terms, such as payment of 5 (X-, of the wholesale price on purchases in excess of $50 a week to retailers in the Xcw Haven, Conn. and Philadelphia, Pa' trading areas.

COMPLAINT The Federal Trade Commission, having reafion to believe that ward Baking Company, hereinafter designated as respondent has violated and is now violating- the provisions of subsection (d) of Section 2 of the Clayton Act, as amended by the Robinsoll- Patman Act, approved June 19 , 1936 (U. , Title 15, Sec. 13), hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH 1. ward Baldng Company is a corporation organized and doing business under and by virtue of the Jaws of the State of Nevv York, with its notice and principal place of business Jocated at475 Fifth Avenue, Xew York City, N. PAR. 2. Respondent is now and for several years last past has been engaged in the business of baking- and selling bakery products including bread, cakes, rolls and pies. Said products arc sold to customers with places of business located in the several States of the United States and in the District of Columbia, for resale to t.he purchasing public. Respondent is an interstate enterprise conducting its bllsiness :from 23 baking facilities. located throughout the l;united State::.. Its net sales in 1956 exceeded $100 000,000.

PAR. 3. 1n the course and conduct oJ its business, respondent has engaged in commerce, as "commerce" is defmed in the Clayton Act, as amended, having 8hippec1 its products from the plac:e \vhere such products are manufactured in various States of the United States to its customers having places of business Jocated in other States of the United States and in the District of Colum- WARD BAKING COMPANY 1143 1142 Complaint bia. There is and has been a constant stream of trade in commerce in respondent's products among the various States and the District of Columbia.

PAR. 4. In the course and conduct of its business in commerce as aforesaid, respondent has paid or contracted to pay, money, goods, or other things of value to or for the benefit of some of its customers as compensation in consideration for services and facilities furnished, or contracted to be furnished, by or through such customers in connection with the processing, handling, sale or offering for sale of the products which respondent bakes, sells or offers for sale; and respondent has not made or contracted to make such payments or considerations available on proportionally equal terms to aU its other customers competing in the sale and distribution of such products.

PAR. 5. Specifically, respondent during the past two years: 1. Paid allowances to some customers, but did not do so or offer to do so in any amount, to other competing customers. 2. When paying such allowances to competing customers, required some of ihem to comply with certain terms and to furnish reciprocal services, but did not require others to do so in any manner or required them to do su in a less burdensome manner or in lesser amounts, and not proportionally equal by any test. 3. In determining allowances to be paid competing customers did so on the basis of promotional agreements ",ith each such customer, allowing a 5 ; allowance of the regular wholesale price to customers who purchased in excess of $50 weekly of respondent' s products, which resulted in proportionally unequal, different and arbitrary terms.

PAR. 6. Allowances, paid by respondent as aforedescribed, include those offered and granted to certain favored customers, but not to other competing customers, in consideration for newspaper and handbill advertising and placement in such favored customers retail outlets of posters, signs, window and counter displays and other like items arlvertising respondent' s various products. Said allowances have been granted and are being granted by respondent in several trading areas, including the trading areas of Ncvv Haven, Conn. and Philadelphia, Fa.

A great majority of respondent' s customers, located in these mme trade areas and in competition with the favored customers do not rcecivc and have not receiycd any such allowances from respondent.

Decision 55 F.

PAR. 7. The acts and practices of respondent, as above alleged violate subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act. (D. C. Title 15 , Sec. 13.

MT. Wiliam W, Rogal and M,' , Fmnklin A. Snyde,' for the Commission.

S1dlivan C,' omwell by M,' . John F. Dooling, h. of New York, N. , for respondent.

INITIAL DECISION BY ABNER E. LIPSCOMB, HEARING EXAMINER The complaint herein was issued on July 8 , 1957 , charging respondent with making payments, during the two preceding years, to certain favored customers, \which payments were not made available on proportionally equal terms to other competing customers, in violation of 2 (d) of the Clayton Act as amended by the Hobin son-Patman Act (D. C. Title 15 13). Thereafter, on December 1 , 1958, respondent, its counsel, and counsel supporting the complaint entered into an Agreement Containing Consent Order to Cease and Desist, which was approved by the director and an assistant director of the Commission s Bureau of Litigation, and thereafter submitled to the hearing examiner for consideration.

The agreement identifies respondent Ward Baking Company as a New York corporation, with its offce and principal place of business located at475 Fifth Avenue, New York, N. Respondent admits all the jurisdictional facts alleged in the complaint, and agrees that the record may be taken as if findings of jurisdictional1 facts had been duly ma(lc in accordance vlith such allegations.

Respondent waives any further procedure before the hearing examiner and the Commission; the making of findings of fact and conclusions of law; and all of the rights it may have to challenge or contest the validity of the order to cease and desist entered in accordance with the agreement. All parties agree that 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; that the order to cease and desist, as c.contained in the agreement, when it shall have hecome a part of the decision of the Commission, 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; that the complaint herein may he used in construing the terms of said WARD BAKING COMPANY 1145 1142 Decision order; and 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. After consideration of the allegations of the complaint and the provisions of the agreement and the proposed order, the hearing examiner is of the opinion that such order constitutes a satisfactory disposition of this proceeding. Accordingly, in consonance with the terms of the aforesaid agreement, the hearing examiner accepts the Agreement Containing Consent Order to Cease and Desist; finds that the Commission has jurisdiction over the respondent and over its acts and practices as alleged in the complaint; and tinds that this proceeding is in the public interest. Therefore It is ordel'd That respondent Ward Baking Company, a corcorporate or other c1evic( poration, directly or through any or in connection with the sale of bread and bakery products in commerce, as "commerce" -is defined in the amended Clayton Act do forthwith cease and desist from:

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

DECISION OF Tile COMMISSIOK AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 10th day of February 1959 , become the decision of the Commissian; and, accordingly;

It is ordered That respondent Ward Baking Company, a corporation, shah, wiihin sixty (GO) days after service upon it of this order, file with the Commission a report in writing, setting which it has complied forth in detail the manner and form in with the order to cease and desist.

1146 FEDERAL TRADE COMYIISSION DECISIONS Decision 55 F.