Chun King Sales, Inc.

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

IN THE MATTER OF CHUN KING SALES, INC.

GOSSENT ORDER , ETC. , IN JU GARD TO THE ALLEGED VIOLATIOS OF SEC. 2 (D) OF THE CLAYTON ACT Docket 8093. Complrrlnt, Aug. 84, 1960-Decisiun, JUl!. , 1961 Consent order requiring a Duluth, Minn., manufacturer of American and Oriental food products, to cease "violating Sec. 2(d) of the Clayton Act by making payments for advertising or other services in connection with the sale of its products to some customers but not on proportionally equal terms to their competitors. such as an allowance of $450 made to the Brenner Tea Company, a retail grocery chain with headquarters in Burlington, Iowa.

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 ((1) of Section g of the Clayto," Act, as amended hy the Robinson-Patman Act (D. C. Title , Sect.ion 13), he.reby issue,s its complaint, stating its cha.rges with respect I, hereto as follows:

PARAGRAPH 1. Respondent Clnm King Sales, Inc., is a corporation organized, existing and doing business under and by virtue of the Jaws of the State of :Minnesota, with its offce and principal (;.31- 7 - !3'3 FEDERAL TRADE COMMISSIOK DECISIOXS Decision 58 F. l'.

place of business located at 200 Korth 50th Avenue ,Vest, Duluth .Minnesota.

PAR. 2. Respondent is now and has been engaged in the m,mufacture, saJe and distribution of food products, both American and Oriental. Respondent seUs its products to wholesalers and retailers including retail chain store organizations. Respondent's sales of its products arc substantial, exceeding $12 000 000 "nnua1ly. PAR. 3. Respondent sells and causes its products to be transported from its principal place of business in the State of Minnesota to customers located in other States of the United States. There has been at aU 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 compensation or in consideration for services or facilities furnished by or through such customers in c.OIlnection with their offering for sa,le or sale of products sold to them by respondent, and such payments were not made available on proportionally equal terms to an other customers competing in the sale and distribution of respondcues products.

PAR. 5. For example, in the year 1950, respondent contracted to pay and did pa,y to Benner Tea Company, a retail grocery chain with headquarters in Burlington, Iowa, the amount of $450.00 as compensation or as an allowance for advertising or other services or facilities furnished by or through Benner Tea, Company in connection with jts offering for sale or sale of products sold to it by respondent. Such compensation or allowance was not made available on proportionally equal terms to all other customers competing with Benner Tea Company in the saJe and distribution of products of like grade and quality purchased from respondent. PAIL 6. The acts and practices of respondent, as alleged, are in violation of subsection (d) of Section 2 of the Clayton Act, as amended by the Robinson-Patman Act.

Mr. John PerecMnslcy for the Commission. Mr. Jolcn D. Jen8word of Duluth finn., for respondent. INITIAL DECISION BY LOREX H. LA"CGHLIN, HEARING EXA)UXER The Federal Trade Commission (sometimes also hereinafter referred to as the Commssion) on August 24, 1960, issued its complaint herein, charging the respondent, The Chun King Corporation (named in the complaint and formerly known as Chun King , CIIL'X KI G SALES , INC.

Decision Sales, Inc.)' with having violated the provisions of 92 (d) of the Clayton Act, as amended by the Robinson-Patman Act (D. C. Title , (13), and respondent was duly served with process. On Kovember 18 , 1960, there was submitted to the undersigned hea.ring examiner of the Commission for his consideration and approval an ' Agreement Conta.ining COTlsent Order To Cease and Desist': , which had been entered into by and bet.ween respondent its counsel, and counsel supporting t.he complaint, under date of October 24, 1960, subject to the approval of the Dureau 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 with ;).25 of t.he. Commission s Hules of Practice for Adjudicat.ive Proce dinasb, and that b"7 said aareement the art.ies have S ecifically agreed to the following matters:

1. Respondent The Chill King Corporation (named in the complaint and formerly knoi\-n as Clull King Sales, Inc. ) is a corporation existing and doing business under and by virtue of the laws of the State of :\Iinnesota, with its office and principal place of business located at 200 Korth 50th Avenue ,Yest, Duluth, Thiinnesota. 2. Respondent admits all the jurisdictional facts alleged in the complaint and agrees that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such 1legations.

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

4. Respondent waives:

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

b. The making of findings of fact or conclusions of law; and e. All of the rights it may have to challenge or contest the validity of the order to c.ease 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 comphlint and this agreement.

6. This agreement shall not become a part of the offcial record unless and until it becomes a part of the decision of the Commission. 1 The complaint was amended on motion of counf:e1 supporting the complaint to accord to the true name of the respondent corporation, both 1113 to caption llnd In Paragraph ONE. The caption, howcyer, has not been physlcallr changed In accordance with the Commission s practice in such regard.

), Decision 58 F.

7. This agreement is for settlement pnrposcs only and does not lawconstitute an admission by respondent that it has violated the 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. When so entered it shall have the same force and effect as if entered after a full hearing. It may be altered, modified or set aside in the manner provided for other orders. The complaint may be used in construing the terms of the order.

Upon due consideration of the complaint filed herein and the said the"Agreement Containing Consent Order To Cease And Desist", latter is hereby approved, accepted and ordered filed. 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 Act, as amended by the Robinson- Patman Act, against the respondent, both generally and in each of the particulars alleged 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 proceeding as to all of the parties hereto; and that said order therefore should be, and hereby is, entered as follows: 1 t i8 ordered That respondent The Chun King Corporation (named in the complaint and formerly known as Chun King Sales Inc. corporation, and its OffCBl'S\ 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 defined 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 distribution of respondent' s products, 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 THE CO::IlIlSSIOX AXD ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rule of Practice the initial decision of the hearing examiner shall, on the 12th day of January, 1961 , become the decision of the Commission; and accordingly:

WELLS ELECTRONICS CO. , INC. , ET AL.

Complaint It is ordered That respondent Chun King Sales, Inc., a corporation, shan, within sixty (60) days after service upon it of this order fie with the Commission a report in writing, sett.ing forth in detail complied with the order tothe manner and form in which it has cease and desist.