FTC Order Preserves Competition for Road Salt Sales to Local Governments in Maine and Connecticut

The Federal Trade Commission today announced a consent order that will maintain competition in the market for bulk de-icing road salt in Maine and Connecticut that otherwise would have been lost as a result of K+S Aktiengesellschaft’s (K+S) $1.68 billion proposed acquisition of Morton International, Inc. To protect state and local governments from higher prices, the order requires K+S’s U.S. subsidiary, International Salt Company LLC (ISCO), to sell its bulk de-icing salt assets in Maine to Eastern Salt Company, Inc., and to sell a similar set of assets in Connecticut to Granite State Minerals, Inc.

According to the Commission’s complaint, K+S’s proposed acquisition of Morton would violate federal antitrust laws by substantially lessening competition in the markets for de-icing salt in Maine and Connecticut. Morton and ISCO are the two primary bidders for the sale and delivery of bulk de-icing salt in Maine and Connecticut, and the combined company would have enjoyed a market share of greater than 70 percent in each state. There is no practical substitute for bulk de-icing salt that can be used to melt ice and snow, and it would be difficult for any other salt providers to enter the affected markets, the FTC’s complaint stated.

The Commission’s complaint further alleges that the proposed acquisition would eliminate the direct and substantial competition between ISCO and Morton and enable the merged company to raise prices in Maine and Connecticut. Because state and local governments are the primary purchasers of bulk de-icing salt, the FTC’s action ensures that governments, and ultimately taxpayers, will not bear the burden of anticompetitive price increases.

The proposed consent order is designed to preserve the competition that would have been eliminated by the acquisition. In Maine, ISCO will sell de-icing salt stockpile space, associated handling and trucking contracts, and contracts for de-icing salt businesses for the 2009-2010 winter season to Eastern Salt. In Connecticut, ISCO will divest stockpile space, associated handling and trucking contracts, and contracts for de-icing salt businesses for the 2009-2010 winter season, and will also provide a three-year supply of de-icing salt to Granite State at a price no higher than ISCO’s costs. The divestitures will enable Eastern Salt and Granite State to become viable competitors in the de-icing salt business in the two states beginning with the 2010-2011 bidding cycle, replacing the competition previously provided by Morton, according to the FTC.

The Commission vote approving the consent order was 4-0. The order will be subject to public comment for 30 days, until October 26, 2009, after which the Commission will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. To file a public comment, please click on the following link: http://www.ftc.gov/os/2009/09/0910086publiccomment.pdf and follow the instructions at that site.

NOTE: A consent agreement is for settlement purposes only and does not constitute an 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. Each violation of such an order may result in a civil penalty of $16,000.

Copies of the complaint, consent order, and an analysis to aid in public comment can be found on the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.