[Federal Register Volume 65, Number 58 (Friday, March 24, 2000)]
[Notices]
[Pages 15911-15912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7268]


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FEDERAL TRADE COMMISSION


Public Workshop; Slotting Allowances and Other Grocery Marketing 
Practices: When Should They Raise Antitrust Concerns?

AGENCY: Federal Trade Commission.

ACTION: Notice announcing workshop.

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SUMMARY: The Federal Trade Commission has set May 31 and June 1 as the 
dates for its public workshop examining the appropriate antitrust 
assessment of slotting allowances, category management, and other 
grocery marketing practices.

DATES: The workshop will be held on May 31 and June 1 in the Commission 
Meeting Room (Room 432), 600 Pennsylvania Avenue, NW., Washington, DC 
20580.

FOR PANEL PARTICIPATION OR FURTHER INFORMATION CONTACT:  To obtain 
information about possible panel participation or for questions about 
the workshop, please contact: David Balto, Bureau of Competition, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 
20580, telephone 202-326-2881, e-mail [email protected]; or William Cohen, 
Office of Policy Planning, Federal Trade Commission, 600 Pennsylvania 
Avenue, NW., Washington, DC 20580, telephone 202-326-2110, e-mail 
[email protected].

SUPPLEMENTARY INFORMATION:

Public Workshop: Slotting Allowances and Other Grocery Marketing 
Practices: When Should They Raise Antitrust Concerns?

Overview

    In recent years, debate has continued about when slotting 
allowances and other grocery marketing practices appropriately raise 
antitrust concerns and thus pose potential matters for antitrust 
enforcement. The Commission last held hearings in this area in 
November, 1995, and this past fall, both the Senate Small Business 
Committee and the House Judiciary Committee held hearings that 
addressed several issues, including antitrust issues, in connection 
with slotting allowances.
    The term ``slotting allowance'' typically refers to a lump-sum, up-
front payment that a food manufacturer must pay to a supermarket for 
access to its shelves. Very often, debates over slotting allowances 
have assumed that all slotting allowances, and all of the market 
conditions in which they are used, are the same. In fact, the term 
``slotting allowance'' has been used to cover an extremely broad range 
of conduct, some of it clearly unlawful as commercial bribery, some 
clearly lawful, and a great deal of it in the gray area in between, the 
antitrust legality of which can be determined only in light of all the 
surrounding facts and circumstances. At the same time, the legal and 
economic literature on the appropriate antitrust analysis of these 
practices has not been as well developed as would be desirable.
    The FTC plans to convene a workshop that will focus on the 
antitrust implications of slotting allowances and other grocery 
marketing practices, such as category management, in which retailers 
engage particular manufacturers to provide advisory or decisionmaking 
functions in determining how best to market certain products of a type 
produced by those manufacturers. The workshop is intended to facilitate 
a discussion among manufacturers and retailers (both small and large 
businesses), consumer groups, marketing experts, economists, and 
lawyers that will increase factual knowledge and illuminate the 
relevant antitrust issues with respect to these and other grocery 
marketing practices. The format will consist of panel presentations and 
discussions, which will include participation by attendees.
    The goal of the workshop is to gain a better understanding of the 
types of slotting allowances and other grocery marketing practices that 
are used, the reasons for which they are used, and the criteria for 
assessing whether slotting allowances or other grocery marketing 
practices raise antitrust concerns. Interested parties are invited to 
participate or attend.

Specific Question To Be Addressed

    The workshop will address the following questions, among others:
     What are the different types of slotting allowances, and 
what prompts the use of one type rather than another?
     Are slotting allowances used for both new and established 
products? In what proportion?
     How do slotting allowances vary from other types of 
product promotion, and what circumstances lead to the use of slotting 
allowances rather than other types of product promotion?
     How do slotting allowances vary from market to market?
     What is the impact of slotting allowances on new product 
development and innovation?
     Do slotting allowances significantly increase the capital 
costs of entry or doing business in particular markets? If so, how do 
capital markets respond?
     How do supermarkets ultimately use the fees they receive 
as slotting allowances?
     Under what circumstances do slotting allowances have an 
impact on prices to consumers and consumer demand? What is the impact?
     Are slotting allowances sometimes paid in order to obtain 
substantial exclusivity and, arguably, market power?
     If slotting allowances were prohibited, would that lead to 
material differences in the bargaining relationship between 
manufacturers and retailers--or would discounts to retailers simply 
take a different form?

[[Page 15912]]

     What other types of grocery marketing practices--such as 
category management--may raise antitrust concern? What are those 
marketing practices, and under what circumstances might they pose 
antitrust issues?
    The Commission welcomes suggestions for other questions that should 
be addressed as well.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 00-7268 Filed 3-23-00; 8:45 am]
BILLING CODE 6750-01-M