FTC attacks slotting fees

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The Federal Trade Commission, in its first-ever action against slotting fees in the grocery industry, March 7 announced settlement of a complaint that accused McCormick & Co. of offering discriminatory discounts to several grocers that the spice marketer didn't give to others. The action could have major repercussions on package-goods marketers. In an unusual 3-2 vote that had commission members arguing over how far the agency should step, the FTC majority found McCormick's offer of preferential discounts in return for shelf space in several instances violated terms of the Robinson-Patman Act. Two dissenting commissioners, Thomas Leary and Orson Swindle, however, suggested the discounts came during a price war and warned the decision would cause confusion for package-goods marketers. The settlement drew praise from U.S. Sen. Kit Bond (R., Mo.), whose Senate Committee on Small Business held hearings last year on slotting fees. "I'm glad to see that the FTC has finally taken the bull by the horns, and hope this marks the beginning of vigorous enforcement of antitrust laws,'' Sen. Bond said. In a little-noted news release, Sparks, Md.-based McCormick on Feb. 3 announced it was settling the case. The company today noted that the release said McCormick admitted no wrongdoing and the settlement has no financial impact.

Copyright March 2000, Crain Communications Inc.

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