Heinz said it would reevaluate its U.S. baby food strategy because of the decision. The decision, which overturned a lower court ruling, was a major victory for the FTC, which sued to block the deal, arguing that the acquisition (giving Heinz 32.8% of the baby food industry, compared to industry leader Gerber Products Co.'s 65%) would reduce competition. The suit was widely viewed as an important test case of the FTC's antitrust policies.
Heinz argued that because most stores carry Gerber and one other baby food brand, a combination would strengthen rather than lessen category competition. Suissa Miller, Los Angeles, handles Beech-Nut, while Heinz has no agency of record for its baby foods. -- Ira TeinowitzCopyright April 2001, Crain Communications Inc.