Midwest Biscuit Company

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IN THE ~IA TTER OF J\IIDvVEST BISCUIT CO~IP ANY CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF SEC. 2 ( d) OF Tile CL\ 1:""TO~ ACT Docket 7868. Complaint, Ap1- 1960-Decision, Sept. 1960 Consent order requiring a manufacturer of bakery products. including biscuits and crackers, in Burlington, Iowa, with annual1 sales exceeding $4,000,000. to cease violating Sec. 2 (d) of the Cla~'ton Act by paying certain of its customers but not their competitors for services or facilities, such as pa~Tments of $650 for advertising made in each of the years 1958 and 1959 to a retail grocery chain with headquarters in Burlington. MIDWEST BISCUIT COMPANY 541 540 Complaint 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, has violated and is now violating the provisions of subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act (V. C. Title 15 Section 13), hereby issues its complaint, stating its charges with respect thereto as follows:

PAILi\GRAPH 1. Respondent :Midwest Biscuit Company is a corporation organized, existing and doing business under and by virtue of the laws of the. State of Iowa, with its office and principal place of business located at 3000 ~It.. Pleasant Street, Burlington, Iowa. PAR. 2. Respondent is now and has been engaged in the manufacture, sale and distribution of bakery products: including biscuits and crackers. Respondent sells its products to wholesalers and retailers, including retail chain store organizations, and to hotels restaurants, and the institutional trade. Respondent's sales of its products are substantial, exceeding $4 000 000 annually. PAR. 3. Respondent sells and causes its products to be transported from its principal place of business in the State of Iowa to customers located 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 commerce. and particularly since 1958, respondent paid or contracted for the payment of something of value to or for the benefit of some of its customers as compen&'1.tion 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 ",ere not made available on proportionally equal terms to all other c.customers competing in the sale and distribution of respondentis products.

PAR. 5. For example, in the years 1958 and 1959, respondent contracted to pay and did pay to Benner Tea Company, a retail grocery chain with headquarters in Burlington, Iowa, the amount of $650.00 in each of said years as compensation or as allowances for advertising or other services or facilities furnished by or through Benner Tea Company in connection with its offering for sale or sale of products sold to it by respondent. Such compensation or allowances were not made available on proportionally equal terms to all Decision 57 F.

other customers compe.ting with Benner Tea Company in the sale and distribution of products like grade and quality purchased from respondent.

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

111'1'. John Perechin.sky for the Commission, 31'1'. E. G. He in.ing, of L1Jayer, Frif;dlich, Spiess, Tierney, Brown Platt of Chicago, lB. for respondent. INITIAL DECISION BY LOREN H. LAUGHLIN, HEARING EXAMINER The Federal Trade Commission (sometimes also hereinafter refen' ed to as the Commission) on April 19, 1960, issued its complaint herein, charging the above-named respondent with having violated , asthe provisions of subsection (d) of S 2 of the Clayton Act amended (D. C" Title 15 , S 13), and the respondent was dulyserved with process. On July 12, 1960, there was submitted to the undersigned hearfor his consideration and approvaling examiner of the Commission an "Agre,ement Containing Consent Order To Cease And Desist which had been e:i1tered into by and between respondent, its counsel, and counsel supporting the complaint, under date of July 11 1960, subject to the approval of the Bureau of Litigation of the Commission, which had subsequently duly approved the same. On due consideration of such agreement, the hearing examiner finds that said agreement., both in form and in content, is in accord of Practice for Adjudicative with 9 3.25 of the Commission s Rules Proceedings, and that by said agreeme.nt the parties have specifically agreed to the following Ji1matters: 1. Respondent ~'lidwest Biscuit Company is a corporation existing and doing business under and by virtue of the laws of the State of Iowa, with its office and principal place of business located at 3000 ~It. Pleasant Street, Burlington, Iowa. facts alleged in the 2. Respondent admits an the jurisdictional complaint and agrees that the. record may be taken as if findings of jurisdictional facts had been duly made in aecordance with such aD ega ti ons.

this proceeding as to all 3, This agreement disposes of all of parties.

4. Respondent waives:

a. Any further procedural steps before the hean11g examiner and the Commission;

conclusions of law; and b. The making of findings of fact or MIDWEST BISCUIT COMPANY 543 540 Order c. All of the rights it may have to challenge or contest the validity of the order to cease and desist entered in accordance with this agreement.

5. The record on 'which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and this agreement.

6. This agreement shall not become a part of the official record unless and until it bec.omes a part of the, decision of the Commission. 7. This 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.

8. The following order to cease and desist may be entered in this proceeding by the Commission without further notice to respondent. ,Vhen so entered it shall have the same force and effect as if ente,re,c1 after a full heating. It may be altered, modified or set aside. in the manner provided for other orders. The complaint may be used in c.onstruing the terms of the order. Upon clue consideration of the complaint filed herein and the said Agreement. Containing Consent Order To Cease And Desist " the latter is hereby approved, accepted and ordered filed, the same not to become a part of the record herein, however, unless and until it becomes a part of the decision of the Commission. The hearing examiner finds from the complaint and the said "Agreement Containing Consent Order To Cease And Desist" that the Commission has jurisdiction of the subject matter of this proceeding and of the respondent herein; that the complaint states a legal cause for complaint under the Clayton Ac.t as amended (D. , Title 15 , S 13) against the responderit both generally and in each of the particulars a llegec1 therein; that this proceeding is in the interest of the public; that the following order as proposed in said agreement is appropriate for the just disposition of all of the issues in this proc.eecling as to all of the parties hereto; and that said order therefore should be and hereby is, entered as follows:

1 t is ordered That respondent :l\fidwest Biscuit Company, a corporation, and its officers, 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 de.:fined 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 connection with the offering for sale, sale or distributlOn of respondent's products, unless such payment or Complaint 57 F.

consideration is made available on proportionally equal terms to other customers competing in the distribution of such products. DECISION OF THE COl\DIISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice the initial dec.ision of the hearing examiner shall, on the 3d day of September 1960 become the decision of the Commission; and accordingly:

It is ordered That respondent l\Iidwest Biscuit Company, a corporation, 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 the order to cease and desist.