FTC Staff Expresses Support for Proposed Modification to New Jersey Gasoline Pricing Law
The staff of the Federal Trade Commission’s Office of Policy Planning, Bureau of Economics, and Bureau of Competition has submitted comments to the New Jersey State Senate expressing support for Senate Bill 484, which would modify current law to allow gasoline retailers to set their prices below cost in certain circumstances. Current New Jersey law prohibits a “retail dealer” from selling motor fuel “at a price which is below the net cost of such motor fuel to the retail dealer plus all selling expenses.”
The proposed legislation would change New Jersey law to allow below-cost pricing to meet competition, so long as such prices are not set “with intent to injure competition or destroy or substantially lessen competition.” The FTC staff explained that because below-cost pricing can benefit consumers, and because the proposed legislation would allow New Jersey gasoline retailers to compete more aggressively on price, New Jersey consumers will likely benefit from the proposed legislation.
The Commission vote approving the staff letter to the New Jersey State Senate was 5-0. It is available on the FTC’s website and as a link to this press release at http://www.ftc.gov/os/2010/09/100928gasolineretailers.pdf. (FTC File No. V100011; the staff contact is Gustav P. Chiarello, Office of Policy Planning, 202-326-2633.)
FTC Approves Modified Final Order Settling Charges that PepsiCo’s Acquisition of Pepsi Bottling Group and PepsiAmericas was Anticompetitive
Following a public comment period, the Federal Trade Commission has approved a modified final order settling charges that PepsiCo, Inc.’s, acquisition of bottler-distributors Pepsi Bottling Group, Inc. and PepsiAmericas, Inc., was anticompetitive. The order requires PepsiCo to restrict its access to confidential commercially sensitive business information of rival Dr Pepper Snapple Group as a condition for proceeding with the $7.8 billion acquisition of its two largest bottlers. In its February 2010 complaint, the FTC charged that PepsiCo’s unrestricted access to this information would have harmed competition in concentrate and carbonated soft drink markets throughout the United States.
The modified final order includes a new provision that requires PepsiCo – for bottler acquisitions that do not require premerger notification – to give the FTC 45 days advance notice of proposed acquisitions of bottlers that have been distributing both PepsiCo and Dr Pepper Snapple brands. As long as PepsiCo complies with this notice provision, and unless the Commission takes action to enjoin any such acquisition, PepsiCo will be allowed to complete the acquisition as well as use confidential commercially sensitive Dr Pepper Snapple information, consistent with the limitations of the consent order. Without the modified language of the final order, PepsiCo would have been required to seek Commission modification of the original consent order for each new bottler deal. The FTC also has approved a monitor agreement and appointed Eric A. Croson, as the monitor, to ensure PepsiCo complies with the terms of the final order.
The Commission vote approving the modified final order, monitor agreement, and monitor appointment was 4-0-1, with Commissioner Edith Ramirez recused. (FTC File No. 091-0133; the staff contact is Joseph S. Brownman, Bureau of Competition, 202-326-2605. See press release dated February 26, 2010 at http://www.ftc.gov/opa/2010/02/pepsi.shtm.)
(FYI 38.2010.wpd)