[Federal Register Volume 65, Number 50 (Tuesday, March 14, 2000)]
[Notices]
[Pages 13766-13770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-6231]


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FEDERAL TRADE COMMISSION

[File No. 961 0050]


McCormick & Company Incorporated; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before April 7, 2000.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 600 Pennsylvania Ave., NW, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Willard Tom, FTC/H-374, 600 
Pennsylvania Ave., NW, Washington, DC 20580. (202) 326-2786.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 2.34 of the 
Commission's Rules of Practice (16 CFR 2.34), notice is hereby given 
that the above-captioned consent agreement containing a consent order 
to cease and desist, have been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for March 8, 2000), on the World Wide Web, at ``http://www.ftc.gov/
ftc/formal.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, 600 Pennsylvania Avenue, NW, Washington, DC 
20580, either in person or by calling (202) 326-3627.
    Public comment is invited. Comments should be directed to: FTC/
Office of the Secretary, Room 159, 600 Pennsylvania Ave., NW, 
Washington, DC 20580. Two paper copies of each comment should be filed, 
and should be accompanied, if possible, by a 3\1/2\ inch diskette 
containing an electronic copy of the comment. Such comments on views 
will be considered by the Commission and will be available for 
inspection and copying at its principal office in accordance with 
section 4.9(b)(6)(ii) of the Commission's Rules of Practice (16 CFR 
4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, an agreement containing a proposed Consent Order from 
McCormick & Company, Incorporated (``McCormick''), the world's largest 
spice company, that is designed to resolve claims, set forth in the 
accompanying Complaint, that McCormick discriminated in the pricing of 
its products to certain competing supermarket purchasers in violation 
of Section 2(a) of the Robinson-Patman Act amendments to the Clayton 
Act, 15 U.S.C. 13(a). The Consent Order requires McCormick to refrain 
from unlawfully discriminating in the prices at which it sells its 
products to competing purchasers in the

[[Page 13767]]

supermarket channel. In addition, in those instances in which McCormick 
believes that its pricing is lawful because its prices were offered to 
meet competition from a competing supplier, the Consent Order requires 
McCormick, for a period of ten years, to contemporaneously document the 
information on which it bases its entitlement to the statutory meeting 
competition'' defense.
    The proposed Consent has been placed on the public record for 30 
days so that the Commission may receive comments from interested 
persons. Comments received during this period will become part of the 
public record. After 30 days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement and the comments received, and will decide 
whether it should withdraw from the agreement or make final the 
agreement's proposed Consent Order.
    McCormick's Business. McCormick, with its principal office and 
place of business in Sparks, Maryland, has been engaged for many years 
in the production, distribution and sale of spice and seasoning 
products for resale. Its products sold through supermarkets include 
core and gourmet spice lines, dry seasoning mixes, and so-called 
``competitive seasonings'' such as meat tenderizers, monosodium 
glutamate (MSG), and garlic and other spice blends. Respondent sells 
these products under the brand names McCormick, Schilling, Fifth 
Seasons, Spice Classics, Select Seasons, Mojave, Spice Trend, Royal 
Trading, Crescent, McCormick Schilling, La Cochina De McCormick, 
McCormick Collection and Old Bay, among others. With 1998 retail sales 
of $623.7 million in the Americas, McCormick is the largest supplier of 
spice and seasoning products in the United States, and claims to be 
``the world's largest spice company.''
    Among those firms that supply core or gourmet spice lines for sale 
in supermarkets in the United States, McCormick is by far the leading 
firm, accounting for the majority of such sales nationally. Since the 
early 1990's, McCormick has faced competition in such sales from only 
one other national firm, Burns Philp Food Incorporated, and several 
much smaller independent regional or local firms. These circumstances, 
combined with the superior brand recognition of McCormick products, 
mean that supermarkets that purchase McCormick products have relatively 
few alternative sources for equivalent products from other suppliers at 
comparable prices and terms.
    McCormick's Pricing. During the period pertinent to the Complaint, 
McCormick had a single national price list for its products sold to 
direct customers, whether retail supermarkets or wholesalers reselling 
to independent supermarkets. McCormick modified this price list from 
time to time, to reflect changes in McCormick's costs to manufacture 
particular products, among other reasons. However, relatively few 
McCormick customers paid the list price. Instead, McCormick commonly 
entered into written or unwritten supply agreements with customers that 
provided substantial discounts off the list prices. These discounts 
took a variety of forms, including cash payments at the commencement of 
the supply agreement, free goods, off-invoice discounts, cash rebates, 
performance funds and other financial benefits that effectively reduced 
the net price of McCormick's products. Typically, McCormick 
individually negotiated with particular customers the amount of 
discounts and payments; the aggregate percentage of discounts and 
benefits provided to a particular customer was commonly known as the 
``allowance offer'' or the ``deal rate.'' McCormick's aggregate 
discounts and financial benefits to some customers were substantially 
greater than to some other competing customers.
    Frequently the McCormick discounts included up-front cash payments 
that resembled the payments sometimes called ``slotting allowances'' in 
the supermarket industry. However, the McCormick discounts and payments 
typically were for all or a substantial part of the existing McCormick 
product line and typically were not incentives to accept new McCormick 
products. McCormick's supply agreements with customers commonly include 
provisions that, as is sometimes seen with slotting allowances, 
restrict supermarket customers' ability to deal in the products of 
competing spice suppliers. Such provisions commonly require that the 
customer allocate to McCormick the large majority (as much as 90%) of 
the shelf space devoted to spice products.
    Price Discrimination. The complaint alleges that in the period from 
at least 1994 to the present, McCormick has on no fewer than five 
instances discriminated in price by providing different deal rates 
consisting of preferential up-front ``slotting''-type payments or 
allowances, discounts, rebates, deductions, free goods, or other 
financial benefits. Through such discriminatory terms of sale, 
McCormick sold its products to the favored purchasers at a lower net 
price than to the disfavored purchasers, in violation of section 2(a) 
of the Robinson-Patman Act amendments to the Clayton Act, 15 U.S.C. 
13(a).
    The Complaint alleges that, in each instance of discrimination, 
McCormick made contemporaneous sales of McCormick products of like 
grade and quality to a favored and a disfavored purchaser; the 
disfavored purchaser competed with the favored purchaser which resold 
respondent's products at the same level of distribution; and at least 
one of the discriminatory sales by McCormick involved commodities that 
crossed state lines. The Complaint also alleges that each of the spice 
and seasoning products that make up McCormick's product line is a 
commodity within the meaning of the statute.
    The Complaint alleges that McCormick's price discrimination 
threatened injury at the ``secondary line'' level of competition, that 
is, at the level of the favored and disfavored purchasers. It alleges 
that each instance of discrimination involved a substantial price 
difference over a substantial period of time between competing 
purchasers in markets where profit margins are low and competition is 
keen. These circumstances give rise to an inference of competitive harm 
within the meaning of the statute, pursuant to the reasoning of the 
Supreme Court in Federal Trade Commission v. Morton Salt Co., 334 U.S. 
37, 50-51 (1948), and subsequent cases. While that inference may not be 
sufficient by itself in some circumstances to warrant bringing a case, 
in this instance the inference is strengthened by McCormick's position 
as the largest supplier of spice and seasoning products in the United 
States and by the fact that McCormick typically demanded that customers 
allocate to McCormick the large majority of the space devoted to spice 
products--in some cases 90% of all shelf space devoted to packaged 
spices, herbs, seasonings and flavorings of the kinds offered by 
McCormick. As alleged in the Complaint, disfavored purchasers 
consequently had few, if any, alternative sources from which to 
purchase comparable goods at prices and terms equivalent to those which 
McCormick provided to the favored purchasers.
    The Complaint also alleges that the favorable prices and terms 
McCormick provided to the favored purchasers were not justified by good 
faith attempts to meet the equally low price of a competitor; nor were 
the favorable prices justified by cost savings associated with doing 
business with the

[[Page 13768]]

favored retailer. The instances of price discrimination were therefore 
not within the scope of either the statutory ``meeting competition'' or 
``cost justification'' defenses established by sections 2(a) and (b) of 
the Robinson-Patman Act amendments to the Clayton Act, 15 U.S.C. 13(a) 
and (b).
    The Order Provisions. The Consent Order provides relief for the 
violations alleged in the Complaint. The Order applies to McCormick's 
sale of products, broadly defined to include spices, seasonings and 
other products used to season or flavor foods, packaged for sale to 
consumers. The Consent Order does not apply to products packaged for 
sale to food service or industrial customers, which are beyond the 
scope of the conduct at issue in the Complaint. Order, para. I.B. The 
Order applies to McCormick's sales to persons or entities that purchase 
McCormick products for resale. Order, para. I.C.
    The principal relief is contained in Paragraph II of the Consent 
Order, which requires that McCormick cease and desist from price-
discriminating, within the meaning of section 2(a) of the Robinson-
Patman Act, by selling its products to any purchaser at a net price 
higher than that charged to any competing purchaser, where the 
discrimination may cause competitive harm as contemplated by the 
statutory language. ``Net Price'' is defined as the list price of 
McCormick Products less advances, allowances, discounts, rebates, 
deductions, free goods and other financial benefits provided by 
McCormick and related to such products. Order, para. I.D.
    The inclusion of competitive harm language in Paragraph II ensures 
that the remedy established by the Consent Order is not over-broad and 
does not enjoin instances of price discrimination otherwise lawful 
under the statute. This paragraph also includes a proviso that makes 
applicable under the Order the statutory defenses set forth in sections 
2(a) and (b) of the Robinson-Patman act, thus accomplishing explicitly 
what otherwise would be implicit pursuant to the Supreme Court's 
decision in Federal Trade Commission v. Ruberoid Co., 343 U.S. 470, 
475-478 (1952).
    As further relief, Paragraph III orders that for each instance in 
which McCormick wishes to avail itself of the ``meeting competition'' 
defense of section 2(b) of the Robinson Patman Act, \1\ McCormick is 
required to contemporaneously document all information on which it 
bases its entitlement to the defense, and to retain such documentation 
in its files for five years after the lower price made to meet 
competition is no longer effective. This provision is ``fencing-in'' 
relief \2\ that should ensure the existence of a reliable evidentiary 
basis in future instances where McCormick invokes the defense.
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    \1\ Section 2(b) of the Robinson-Patman Act permits a seller to 
rebut a prima-facie case 2f price discrimination by showing that his 
lower price ``was made in good faith to meet an equally low price of 
a competitor.'' 15 U.S.C. 13(b).
    \2\ See Federal Trade Commission v. National Lead Co., 352 U.S. 
419, 430 (1957).
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    In addition to these principal relief provisions, the Consent Order 
requires that McCormick distribute a copy of the Order to all officers, 
employees, brokers, and agents of its operating divisions involved in 
the sale of products covered by the order, and in the future to new 
employees, brokers, and agents. Order, para. IV. McCormick is required 
to inform the Commission of corporate changes that may affect its 
compliance obligations under the Order (Order, para. V), and to file 
reports concerning its compliance under the Order (id., para. VI.) The 
term of the Order is twenty years (id., para. VII); the obligations 
under para. III to document the ``meeting competition'' defense and 
under para. VI to file annual compliance reports extend for ten and 
five years, respectively.
    The purpose of this analysis is to facilitate public comment on the 
proposed Consent Order, and it is not intended to constitute an 
official interpretation of the agreement and proposed Consent Order or 
to modify in any way their terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.

Statement of Chairman Robert Pitofsky and Commissioners Sheila F. 
Anthony and Mozelle W. Thompson

    The Analysis to Aid Public Comment fully describes the Commission 
action in this matter. Some comments by our dissenting colleagues, 
however, require a brief response.
    The Commission has accepted for public comment a consent order from 
McCormick & Company Inc. (``McCormick'') in which the company has 
agreed to cease and desist granting discounts (partly in the form of 
up-front shelf-allocation payments) to large chains without making 
comparable payments available to other chains and independents that 
compete with the favored chains. Under the Supreme Court's controlling 
decision in FTC v. Morton Salt Co., \1\ injury to competition at the 
retailer (i.e., ``secondary'') level can be inferred where substantial 
and durable price discrimination exists between competing purchasers 
who operate in a market with low profit margins and keen competition.
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    \1\ 334 U.S. 37 (1948) (Morton Salt).
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    McCormick is far and away the largest manufacturer and supplier of 
full lines of spices to grocery stores in the United States. In the 
early 1990s, it found itself in a price war with Burns-Philp Food Inc. 
(``Burns-Philp''), it only full-line competitor. Substantial 
discriminatory discounts were granted to favored chains, often 
accounting for many individual stores, and not to competing retailers.
    In examining McCormick's discounts, the Commission did not simply 
apply the Morton Salt presumption in finding injury to competition, but 
examined other factors, including the market power of McCormick and the 
fact that discounts to favored chains were conditioned on an agreement 
to devote all or a substantial portion of shelf space to the McCormick 
line of products. Our dissenting colleagues applaud the fact that the 
Commission is willing to examine injury to competition by looking at 
factors beyond those narrowly described in the Morton Salt approach, 
but conclude that those factors do not justify a secondary-line price 
discrimination case here. We do not find their arguments persuasive.
    1. The dissenting Commissioners observe that the discriminatory 
discounts were granted in the midst of, and possibly because of, a 
price war. But the Robinson-Patman Act limits on discriminatory 
pricing--including the rule that a seller can meet but not exceed 
prices offered by a competitor \2\--are not suspended during price 
wars.
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    \2\ See Falls City Indus. v. Vanco Beverage, Inc., 460 U.S. 428, 
446 (1983) (``a seller's response must be defensive, in the sense 
that the lower price must be calculated and offered in good faith to 
`meet not beat' the competitor's low price.'')
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    2. Our colleagues suggest that this is a primary-line case (i.e., 
injury at the producer level) masquerading as a secondary line (injury 
at the retailer level) enforcement action. But that kind of distinction 
between primary-line and secondary-line anti-competitive effects is 
unduly rigid and mechanical--particularly in light of the facts of this 
matter. It is true that part of the injury at the secondary level 
occurred because McCormick's behavior injured its only full-line 
competitor. But that is just one part of the secondary-line case. The 
fact remains that favored chain store buyers received from a dominant 
seller substantially better discounts than disfavored buyers, and they 
were injured, and competition at the secondary line was injured, as a 
result. Moreover, with Burns-Philp out of the picture as an aggressive 
competitor,

[[Page 13769]]

chain stores and other retailers at the secondary level will be denied 
benefits of future competition.
    3. The Commission was influenced in the decision to enforce the 
Robinson-Patman Act here because McCormick is a dominant seller. Our 
colleagues' conclusion--that market dominance by the discriminating 
seller should be irrelevant to secondary-line price discrimination--
flies in the face of commentary by leading scholars such as Herbert 
Hovenkamp suggesting that the dominance of the seller is exactly the 
factor that should be examined in the exercise of prosecutorial 
discretion. \3\
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    \3\ See, e.g., Herbert Hovenkamp, Market Power and Secondary-
Line Differential Pricing, 71 Geo. L.J. 1157, 1170 (1983) 
(``Systematic, long-term price discrimination can be achieved only 
by a seller with market power. If the seller does not have market 
power, purchasers asked to pay the higher price will purchase from 
another seller willing to sell at a more competitive price.'')
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    The essential feature of Commission action here should not be lost 
in a quarrel over particular facts. As the Analysis to Aid Public 
Comment points out, there will be circumstances in which the Morton 
Salt presumption is appropriate and dispositive. There may be other 
market settings in which it makes sense for the Commission, as a matter 
of prosecutorial discretion, or the Commission and Courts, in the 
process of considering whether there has been a violation, to look past 
the Morton Salt factors to a broader range of market conditions to 
determine whether there has been real injury to competition. Taking 
those additional factors into account, the majority concluded that 
there was injury not just to the disfavored buyers, but to secondary-
line competition generally.

Dissenting Statement of Commissioners Orson Swindle and Thomas B. 
Leary

    We respectfully dissent from the Commission's decision to accept a 
consent agreement with McCormick & Company, Inc. (``McCormick'') to 
resolve allegations that the company violated the Robinson-Patman Act. 
We recognize that the majority sincerely believes that this case will 
clarify a controversial statute and property circumscribe its 
application. We are concerned, however, that this case will have 
precisely the opposite effect.
    McCormick is the largest American supplier of species to grocery 
stores, with more than 2,000 contracts \1\ that account for a majority 
of spice sales in the United States. (Complaint para.-1A5). During the 
past decade, McCormick's main competitor has been Burns Philp Food 
Incorporated (``Burns Philp''). In the early 1990s, Burns Philp 
commenced a price war in which both it and McCormick offered increased 
discounts and other payments to try to win the business of grocery 
stores.\2\ When the price war ended, McCormick remained the dominant 
spice supplier in the United States, and Burns Philp's ability to 
compete may have been impaired.\3\
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    \1\ See McCormick & Company, Inc., Press Release, McCormick 
Signs Settlement Agreement with the Federal Trade Commission at 2 
(Feb. 3, 2000), (McCormick has ``more than 2,200 customer 
contracts'').
    \2\ Anthony Hughes, Burns Philp Was Inept, Says ASIC, The Age at 
2 (Mar. 11, 1999).
    \3\ Id. ``Inadequate financial reporting to the board of 
directors and its failure to question overstated valuations were 
largely behind the near-collapse of the food group Burns Philp & 
Co., a report by the Australian Securities and Investments 
Commission has found.'').
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    A supplier may violate section 2(a) of the Robinson-Patman Act 
amendments to the Clayton Act, 15 U.S.C. 13(a), if it engages in price 
discrimination that causes so-called ``primary-line'' injury. Primary-
line injury under the statute occurs when a difference in price causes 
harm to competition between suppliers. A case predicated on primary-
line injury to Burns Philp or other suppliers of spices would require 
proof that the discriminatory prices that McCormick charged grocery 
stores were below cost and that McCormick had a reasonable prospect of 
recouping its losses. See Brooke Group Ltd. v. Brown & Williamson 
Tobacco Corp, 509 U.S. 209 (1993). In other words, primary-line injury 
to suppliers is actionable only when there is a threat of ultimate 
injury to buyers. The Commission's complaint does not allege that 
McCormick engaged in price discrimination that caused primary-line 
injury to suppliers such as Burns Philp.
    Instead, after more than three years of investigation and the 
commitment of substantial resources, the majority of the Commission has 
alleged that McCormick engaged in price discrimination that caused 
``secondary-line'' injury, i.e., harm to competition between buyers. 
Specifically, out of McCormick's more than 2,000 contracts, the 
complaint alleges that in five instances McCormick charged higher 
prices to certain grocery stores than it charged to their competitors. 
(Complaint para. 12). The higher prices that the disfavored grocery 
stores paid McCormick for spices allegedly harmed their ability to 
compete against other grocery stores for customers. (Id. para. 19).
    The majority statement conveys the impression that there was actual 
secondary-line injury in this case. But the Commission does not rely on 
direct evidence of secondary-line injury to the disfavored grocery 
stores. Rather, the Commission relies on the so-called ``Morton Salt 
inference'' of competitive harm. (Id. para. 17). for more than 50 
years, courts have used the Morton Salt inference that ``injury to 
competition is established prima facie by proof of a substantial price 
discrimination between competing purchasers over time.'' \4\ In 
essence, the Morton Salt inference permits a court to infer injury to a 
disfavored purchaser from a persistent and substantial discriminatory 
price in a market where profit margins are low and competition is keen, 
and then to infer injury to competition from the injury to the 
disfavored purchaser.
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    \4\ Falls City Indus., Inc. v. Vanco Beverage, Inc., 460 U.S. 
428, 435 (1983) (citing Federal Trade Commission v. 
Morton Salt Co., 334 U.S. 37, 46, 50-51 (1948)).
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    We question whether the facts in this case support the application 
of the Morton Salt inference. The Robinson-Patman Act was primarily 
intended to prevent price discrimination in favor of large buyers at 
the expense of small buyers.\5\ When a small buyers pay more than a 
large buyer for an item in an industry with low profit margins and keen 
competition, the Morton Salt inference may make sense. In such 
circumstances, it is reasonable to infer that the purchasing power of 
the large buyer will cause the price discrimination to be repeated 
across many items, with consequent competitive injury to the small 
buyer.
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    \5\ In enacting the Robinson-Patman amendments, the Congress 
addressed the concern that large buyers could secure a competitive 
advantage over small buyers solely because of the large buyers' 
quantity purchasing ability. H.R. Rep. No. 2287, 74th Cong., 2d 
Sess. 7 (1936); S. Rep. No. 1502, 74th Cong., 2d Sess. 4-6 (1936).
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    The complaint does not allege that the favored grocery stores were 
larger than the disfavored grocery stores \6\ or that they purchased 
more spices from McCormick. Since the favored stores here were not 
necessarily purchasing larger quantities of spices than the disfavored 
stores, it is unlikely that McCormick granted lower prices to the 
favored grocery stores because of their buying power. In fact, the most 
plausible explanation for the lower prices granted in the five 
instances alleged in the complaint is that they were the almost 
fortuitous and incidental result of McCormick's responses during its 
price war with Burns Philp. If the favored stores were not accorded 
lower spice prices because

[[Page 13770]]

of their buying power, there is little reason to believe that the 
favored stores generally would receive lower prices from the suppliers 
of the thousands of products sold in the typical grocery store. It 
follows that it is unlikely that the ability of the disfavored grocery 
stores to compete with favored stores would be harmed--the underlying 
rationale for use of the Morton Salt inference.
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    \6\ To the extent that the majority tries to suggest that the 
disfavored stores are ``mom-and-pop'' operations, in fact only one 
of the disfavored stores could be so characterized; the rest of the 
disfavored stores are all large or relatively large grocery store 
chains.
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    The Analysis to Aid Public Comment emphasizes that the Commission 
is not relying on the Morton Salt inference by itself to support 
bringing a case. Analysis of Proposed Consent Order to Aid Public 
Comment at 4. The Analysis explains that the use of the Morton Salt 
inference in this case is particularly appropriate because McCormick is 
the largest supplier of spices in the United States and because the 
company typically demanded that grocery stores allocate to McCormick a 
large majority of the shelf space they devoted to spices. Id; see 
Complaint Paras. 6, 10, 18. Although we share the majority's apparent 
view that the public interest generally would be better served if the 
Commission did not bring Robinson-Patman cases based only on the Morton 
Salt inference, the majority has not identified additional facts that 
warranted bringing this case.
    McCormick's alleged market power as a supplier and its alleged 
discriminatory prices may have harmed the ability of Burns Philp and 
other suppliers to compete with McCormick. But this does not make it 
any more plausible that McCormick's alleged discriminatory prices 
harmed the ability of the disfavored grocery stores to compete with the 
favored grocery stores. In the long run, if McCormick's pricing has 
harmed the ability of Burns Philp or other suppliers to compete, the 
loss of alternative suppliers would harm both the disfavored grocery 
stores and the favored grocery stores (once their present contracts 
with McCormick expire). A loss of alternative suppliers is a classic 
consequence of primary-line injury, but such a loss does not 
necessarily have a differential impact on buyers that will cause 
secondary-line injury--the relevant level of commerce in this case.\7\
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    \7\ We do not suggest that market power of the supplier is 
irrelevant in a Robinson-Patman Act case--in fact, it is likely to 
be present in all cases of economic price discrimination. However, 
supplier market power is not dispositive of whether secondary-line 
injury is likely to have occurred. Our agreement with the majority 
that McCormick is the dominant spice seller does not overcome the 
lack of proof of secondary-line injury in this case.
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    We recognize that there has been much controversy over the years 
concerning the use of the Morton Salt inference and that the inference 
has not been uniformly applied.\8\ Overall, the concern has been that 
the inference makes violations too easy to prove.\9\ It is laudable 
that the majority has tried to limit the use of the Morton Salt 
inference. We do not believe, however, that evidence of supplier market 
power justifies bringing cases in which the Morton Salt inference is 
used as the basis to prove competitive harm among buyers.\10\ Because 
the majority has no other basis on which to show secondary-line 
competitive injury in this case, we dissent.\11\

    \8\ See ABA Section of Antitrust Law, Antitrust Law Developments 
450-51 (4th ed. 1997).
    \9\ See, e.g., LaRue, Robinson-Patman Act in the Twenty-First 
Century: Will the Morton Salt Rule Be Retired?, 48 S.M.U.L. Rev. 
1917 (1995).
    \10\ As noted above, McCormick's alleged discriminatory prices 
were offered during a price war with its main competitor. We assume 
without deciding that a ``meeting competition'' defense under the 
Robinson-Patman Act would not have insulated McCormick from 
liability.
    \11\ We do recognize that the proposed narrowly circumscribed 
order would be appropriate in a proper secondary-line case.
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[FR Doc. 00-6231 Filed 3-13-00; 8:45 am]
BILLING CODE 6750-01-M