SENATOR SLAMS FTC OVER SLOTTING FEES

Says Small Marketers Kept Off Store Shelves By Big Companies

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WASHINGTON (AdAge.com) -- A decision by the Federal Trade Commission to reject a petition that it examine slotting fees in the grocery industry is drawing fire from a key senator.

Sen. Kit Bond, R-Mo., the former chairman of the Senate Small Business and Entrepreneurship Committee, held hearings on the grocery fee slotting and added money to the FTC budget to study slotting last year. He said today he was "disappointed" by the FTC's decision.

"This response sends

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a chill up the spine of small manufacturers whose ability to bring their products to consumers is being whittled away by companies controlling dominant shares of the marketplace," he said.

Paying for shelf space
Packaged good companies pay slotting fees to retailers such as grocers, convenience store owners, drug stores and even gas stations to get shelf space for their products.

Sen. Bond, now the ranking Republican on the committee, is concerned that slotting fees hinder competition as smaller companies unable to pay the fees -- which can include a number of financial inducements paid to store owners to place or keep products on grocery shelves -- cannot compete with larger marketers even if they have better products.

In 2001 the FTC held hearings into the slotting deals, but a week ago the FTC turned back a petition filed by three groups representing independent bakers, tortilla makers and chewing gum manufacturers requesting increased enforcement of slotting fees in the grocery industry.

Studying the issue
The FTC said it is still studying the effect of slotting fees and has requested information from marketers and groceries on its effect.

In a statement, Sen. Bond condemned the decision.

"The FTC's unqualified and open-ended denial of the petition offers no inducement to discourage big manufacturers and retailers who are effectively gaming the system to limit competition and exclude small manufacturers from grocery store shelves," he said.

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