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The Federal Trade Commission has given final approval to a consent agreement with Schnuck Markets, Inc., settling charges that its acquisition of the U.S. supermarkets owned by National Holdings, Inc. would violate antitrust laws by substantially reducing supermarket competition in St. Louis, Missouri. The FTC had alleged that, by combining direct supermarket competitors in St. Louis, the acquisition could lead to higher prices for food and other grocery products and a decrease in quality and selec- tion. The Commission's action makes the consent order provisions binding on Schnucks.

Schnucks is based in St. Louis as is National, which is owned by W. Galen Weston of Canada. In the transaction at issue, Schnucks is to acquire all of National's U.S. supermarkets, and transfer the 28 National supermarkets in Louisiana, Mississippi, and Alabama to Schwegmann Giant Supermarkets, Inc. A related consent order with Schwegmann in this matter was issued in final form on June 2.

Under the final FTC order, Schnucks must divest the follow- ing 24 stores in the St. Louis area:

  • National, 2700 S. Grand Avenue, St. Louis, MO

  • National, 5433 Southwest Avenue, St. Louis, MO

  • National, 1605 S. Jefferson, St. Louis, MO

  • National, 8823 Ladue Road, Ladue, MO

  • National, 850 Jungerman, St. Peters, MO

  • National, 1716 Vandalia Road, Collinsville, IL

  • National, 6 S. Old Orchard, Webster, MO

  • National, 10431 St. Charles, St. Ann, MO

  • National, 13041 New Halls Ferry, Florissant, MO

  • National, 8945 Riverview Drive, St. Louis, MO

  • National, 421 Kirkwood Road, Kirkwood, MO

  • National, 1290 Camp Jackson Road, Cahokia, IL

  • National, 4432 Lemay Ferry Road, Mehlville, MO

  • National, 14855 Clayton Road, Chesterfield, MO

  • National, 7434 Olive St. Road, University City, MO

  • National, 4 Market Place, Fairview Heights, IL

  • National, 1200 Sugar Creek Square, Fenton, MO

  • National, 215 Arnold Cross Road, Arnold, MO

  • Schnucks, 1435 Vaughn Road, Wood River, IL

  • Schnucks, 3661 Reavis Barracks, St. Louis, MO

  • Schnucks, 1355 South 5th Street, St. Charles, MO

  • Schnucks, 10223 Lewis & Clark, Bellefontaine, MO

  • Schnucks, 9719 Crestwood Road, Crestwood, MO

  • Schnucks, 6965 Parker Road, St. Louis, MO

Pending divestiture, Schnucks must keep the stores to be divested in marketable and viable condition. The divestitures must be made within 12 months to entities that will operate the stores as supermarkets in competition with Schnucks.

The consent order also requires Schnucks, for 10 years, to obtain FTC approval before acquiring an interest in a supermar- ket, or another entity that operates a supermarket, in the St. Louis area. In addition, for 10 years, if Schnucks leases or sells a supermarket to another entity, it would be prohibited from restricting the ability of that person to operate the facility as a supermarket.

The consent agreement was announced for a public-comment period on March 8. The Commission vote to issue it in final form occurred on June 8, and was 5-0. Commissioner Mary L. Azcuenaga issued a concurring statement in which she said she questioned the broad St. Louis MSA geographic market alleged for analyzing whether the transaction violates the antitrust laws, but observed that the remedy appeared to address competitive problems in narrower markets also alleged in the complaint. She also stated that "[a] serious argument can be made that the [product] market should include sales of food and groceries in certain stores other than traditional supermarkets." She noted that she voted to accept the consent order, however, because the evidence suggests that the broader product market also is highly concentrated.

NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions by the respon- dents. Each violation of such an order may result in a civil penalty of up to $10,000.

A news release summarizing the complaint and consent agree- ment was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release and of the complaint and final order are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

 

(FTC File No. 941 0130)

(Docket No. C-3585)

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