Minute Maid Corporation

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

I" THE l\'LATTER OP MINUTE MAID COHPORATION ET AL.

SENT ORDBR ETC. IX nEGARD TO THE ALLEGED VIOLA non OF SEC. 2 (C) Ol' THE CLAYTON ACT Docket 7517. Complaint, June 1959-Decision Ma1' , 1962 Consent order requiring The Coca-Cola Company, legal successor through merger to Minute Maid Corp., processors and packers of citrus fruit, to cease violating Sec. 2(c) of the Clayton Act by paying a brokerage or commission to brokers and other buyers on purchases for their own accounts for resale usually at the rate of 10 cents per 1 % bushel box and ;' cents per half box of fresh fruit and 3% of the net selling price of frozen citrus concentrates and frozen foods.

COI'fPLAINT The FBde.ral Tra.de Commission, having reason to believe that the parties respondent named in the caption hereof, and hereinafter more particularly described, have been and are nenv violating t.he provisions of subsection (c) of Section 2 of the Clayton Act, as amended (U. Titlo 15, Sec. 13), hereby issues .its complaint, stating its charges with respect thereto as follows:

PARAGRAPn 1. Iiesponclent :Minute Ja.id Corporation is a corporation organized, existing and doing business under and by yirtne of the Jaws of the State of Florida, with its offce and principal place of business located 1200 ,Vest Colonial Drive, Orlando, Fla. Hesponclent l\finute Jla.id Groves Corp. is 11 corporation organized existing and doing business under and by virtue of the la,"\s of the State of Florida, with its oilee and principal place of business also located at 1200 ,Vest Colonial Drive, Orlando, Fla. Hesponclent l\iinute )Iaid Groves Corporation is a wholly owned subsidiary of respondent :Minnte faicl Corporation and both responde,nts operate from the same principal offce.

?dinute I\Ia.id Groves Corporation is pre,sently considered and operates as the Fresh Fruit Division of the Pare,nt Company, ),1inutB Iaicl Corporation; and for t.he past few years has been doing business for all intents and purposes, in the same manner as, and in many im tal1ces in the name of, the parent corporation. No particular efiart is made by the two corporate.ions in t.he course of doing business to dist.inguish the subsidiary from the parent corporation. R, respondent :Vfinut.e Iaid Corporation exercises authority 1tnd control over respondent :.Uinute laid Groves Corporation, including its sales and distributi(Jn policies. Therefore both respondents will hereinafter be referred to jointly jn this complaint as seller respondents 01' as respondents. 476 FEDERAL TRADE CO:\ISSION DECISION" Complaint 60 F.

PAR. 2. Respondents, and each of them, ate now, and for the past seveml years have been, engaged in the business of growing, packing, selling and distributing fresh citrus fruit, such as oranges, tangcrines and grapefruit, as well as frozen citrus fruit concentrates and frozen foods, all of which arc hereinafter sometimes referred to as food products. They sell and distribute these food products both through brokers and direct to customers 10mted throughout the United States and in Canada.

Respondents operate refrigerated warehouses and processing plants as well as fresh fruit packig plants in the various cities or other places in the State of Florida. They also operate a plant at Lewiston Idaho, for processing frozen food products. Respondents also maintain refrigerated warehouses throughout the country from which local deliveries are made to distributors. Respondents are substantial factors in the sale and distribution of fresh citrus fruits, frozen citrus concentrates and frozen foods, with gross sales well in excess of $100 000 000 annually.

PAR. 3. Respondents sell and distribute their food products through brokers, commission merchants, on consignment, and to some customers direct. In the sale of fresh fruit through brokers, the brokers are paid for their service at the rate of 10 cents per box for a full 1% bushel Bruce box and 5 cents for a % bushel Bruce box, or half box. In the sale of frozen citrus concentrates and frozen foods through brokers, the brokers are paid for their services usually at the rate of 3% of the net selling price of the particular product. PAR. 4. In the course and conduct of their business over the past several years, respondents, and each of them, have sold and distributed and are now selling and distributing their food products in commerce as " C0I11nerce" is defliled in the aforesaid Clayton Act, as amended to buyers for resale located in the several states of thc United States other than the State of Florida in which respondents are located. Respondents, and each of them, transport or cause such food products when sold, to be transported from their place of business warehouses or packing plants in the State of Florida, or elsewhere, to such buyers located in various other states of the United States. There has been at all times mentioned herein a continuous course of trade in comnlerce in said food products across state lines betlveen said respondents and the respective buyers of such food products. PAn. 5. In the course and conduct of theit business as aforesaid respondents, and each of them, have made substantial sales to some, but by no means all, of their brokers, a,s well as other buyers, who were and are purchasing for their own account for resale, and on a large &;

:MIKUTE MAID CORP. ET AL. 477 475 Initial Decision number of these sales respondents paid, granted or allowed, and are now paying, granting or allowing to these brokers and other buyers on said purchases, a commission, brokerage, or other compensation or an allownace or discolmt in lieu thereof, in connection therewith. PAR. 6. Tho acts and practices of respondents as above alleged and described are in viohltion of subsection (c) of Section 2 of the Clayton Act, as amended (U.S. C., Title 15, Sec. 13). Mr. Cecil G. Miles for the Commission. Gurney, GUJ'ney Handley, by L1f1'. J. Thomas Gurney, of Orlando Fla., for the respondents.

INITIAL DECISION BY LOREN H. LAUGHLIX, IIEARING EXAMINER The Federal Trade Commission (sometimes also hereinafter referred to as the Commission) on June 11, 1959, issued its complaint herein, charging the above-named respondents with having violated the provisions of g 2 (c) of the Clayton Act, as amended (U. , Title , g 13), in certain particulars, and respondents were duly served with process.

On January 22, 1962, there was submitted to the undersigned hearing examiner of the Commission, for his consideration and approval an "Agreement Containing Consent Order To Cease And Desist" which had been entered into by and between respondents and counsel for both parties, under date of January 22, 1962, subject to the approval of the Bureau of Hestraint of Trade of the Commission, which had duly approved the same.

On due consideration of such agreement, the heating examiner finds that said agreement, both in form and in content, is in accord with 25 of the Commission s Rules of Practice for Adjudicative Proceedings, dated March, 1960, and that by said agreement the parties have specifically agreed to the following matters: 1. Respondent ~linute Maid Corporation, at the time complaint was issued by the COl11nission on J nne 11 , 1959, was a corporation existing and doing business under and by virtue of the laws of the State of Florida, wit.h its offce and principal.1 place of business located at 1200 Colonial Drive, in the city of Orlando, State of Florida. On December 30, 1960, respondent -vlinute Maid Corporation merged with The Coca Cola Company, a Delaware corporation \with its principal offce locat.ed at 515 )laclison Avenue, :New York, N. , and since that time Minute laid Corporation has ceased to be a corporation and has been operating as Minute Maid Company, a division of The Coca-Cola Company. However, its place of business for the sale and distribution of fresh citrus fruit remained at 1200 1Vest Colonial Drive 478 FEDERAL TRADE CO:IMISSIO:\ DECTSIONS Initial Decision GO F. Orlando, Fla. The Coca-Cola Company, as the legal successor of Minute Maid Corporation, herewith and hereby assumes all of the obligations and duties of Minute Maid Corporation, including compliance with the order to cease and desist contained herein. 2. Respondent Minute Maid Groves Corporation is a corporation existing and doing business under and by virtue of the laws of the State of Florida, with its offce and principal place of business located at 1200 "IV cst Colonial Drive, in the city of Orlando, State of Florida. Since December 30, 1960, respondent '\linute Maid Groves Corporation has been operating as a wholly-owned corporate subsidiary of The Coca-Cola Company, with address and principal offce remaining at 1200 "IV est Colonial Drive, Orlando, Fla. 3. The Coca-Cola Company, as legal successor of Minute Maid Corporation, hereby waives amendment or the complaint and service or process and agrees that the service or the complaint on l\Iinute )'Iaid Corporation shall have the same legal force and effect as though it \"were served upon The Coca-Cola Company.

4. Hcspondcnts admit all the jurisdictional facts alleged in the complaint and agree that the record m"y be t"ken as if findings of jnrisdictional facts had been duly made in accordance with such allegat.ions. 5. This agreement disposes of all or this proceeding as to all parties. 6. Respondents waive:

(0) Any further procedural steps before the hearing examiner and the Commission;

(b) The making of fu1dings or fact or conclusions of law; and (e) All of the rights they may have to challenge or contest the validity or the order to cease and desist entered in accordance with this a,grcement.

7. The Tecord on which the initial decision and the decision of the Commission shall be based shan consist solely of the complaint, this agreement, and the fittached stipulation which is made a part of this agreement by reference the same as if quoted he.rein verbatim. 8. This agreement shall not become a part of the offcial record unless and unbl it becomes a part of the decision of the Commission. 9. This agTecmcnt is for settlement purposes only and does not constitute an admission by respondents that they have violated the la,,, as a.llegec1 in the complaint.

10. The following order to cease and desist may be entered in this proceerling by the Commission without furthe.r notice to respondents. "lVhen so entered it shall have the same force and effect as jf entered after 0 full hearing. It may be altered, modified or set aside in the UTE MAID CORP. ET AL. 479 475 Decision and Order manner provided for other orders. The complaint may be used in construing the terms of the order.

11. For the purpose of this proceeding, it is agreed that the allegation of paragraph 3 of the complaint relating to the sale of frozen citrus concentrates and frozen foods cannot be supported by substantial evidence and is not included in or covered by the order contained herein.

Upon due consideration of the complaint filed herein and the said Agremnent Containing Consent Order To Cease And Desist", the hearing examiner approves and accepts this agreement, and finds that tho Commission has jurisdiction of the subject mauer of this proceeding and of the respondents herein; that the complaint states a leg,d cause for complaint under 2 (c) of the Clayton Act, as amended (L;. , Title 15 13), against thc respondents, both generally and in each of the particulars alleged therein, except the allegation contained in paragraph 3 of tho complaint; that this proceeding is in the interest of the public; that the order proposed in said agreement is appropriate for the just disposition of all 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:

It is ordered That respondents Thc Coca-Cola Company (successor through merger to J\.finute i\Iaid Corporation, and operating through Minute ~faicl Company, a division of The Coca-Cola Company) and :Tlinllte l\falcl Groves Corporation, it corporation, ancl respondents offcer " agpnts, l'epreselltllt1Y8S and employers, directly or through any corporate or other device ill connection with the sale of citrus :fruit or fruit products in commorce, as ':col1lnerce" is defined in the Clayton Act, as amended, do forth\\"ith cease and desist from: Paying, granting or allowing, directly or indirectly, to any buyer, or to flnyone 1.tillg for or in behalf of, or who is subject to the direct or indirect control of such buyer, anything of value as a c011mission brokerage, or other compensation, or any allowance or discount in lieu thereof, upon or ill connection with any sale of citrus fruit or fruit products to such buyer for his own account. DECISION OF TIm COJDIISSIQX \.XD orWEH TO FILE HEPOnT OF COJHPLIASCE Pursuant to Section 3.21 of the Commission s Rules of Practice published )'Iay 6, 1055, as amended, the initial decision of the hearing examiner sl1f. , on the 7th day of :March 1062, become the decision of the Commission; and, accordingly:

It i8 OlyleTecl That respondents The Coca-Cola Company, a. corporation, successor to respondent IHinute :Maicl Corporntlon, and :l\minute , .

480 FEDERAL TRADE CO IISSIOX DECISIONS Complaint 60 F.

Maid Groves Corporation, a corporation, shall, within sixty (60) days after service upon them of this order, file with the Commission a report, in writing, setting forth in detail the manner and form in which they have complied with the order to cease and desist.