• U.S.

Business: This Is Business!

3 minute read

Last October, four months after the Robinson-Patman Act went into effect, the Baltimore purchasing agent for Great Atlantic & Pacific Tea Co. received a letter from A. & P. headquarters: “Go through your records carefully and see if there has not been some entry or some correspondence which might come in for criticism or complaint. You are buying large quantities of merchandise from many shippers for a large organization and must realize that everything you do is certain to be subject to review, or even investigation, and we urge you to handle your dealings accordingly.”

No more than might be expected from a chainstore with 15,000 outlets and annual sales of nearly $1,000,000,000 was this shrewd bit of foresight. Outlawing price discrimination and many another favor long demanded by the country’s big buyers, the Robinson-Patman Act is fundamentally anti-chainstore legislation. Sure enough, in its efforts to retain at least a measure of the advantages of large-scale buying, A. & P. was soon enmeshed in Federal Trade Commission proceedings, dragging in a number of ifs suppliers, who are equally liable under the new law.

By last week the Commission had burrowed down to A. & P.’s “unsatisfactory list,” a file of suppliers who got no orders because they refused to yield to A. & P.’s economic bludgeoning. In previous hearings the Commission had learned how A. & P. bought Fleischmann’s Yeast at 14 ¢per lb., whereas little bakers paid as much as 25¢ how A. & P. had extracted a 4% discount on canned soups and vegetables from Maryland’s Colonel Albanus Phillips; how A. & P. got 3% off on sardines from R. J. Peacock Canning Co. in Lubec, Me.; how it got a 3% allowance on canned cherries from an Alton, N. Y. packer. Not only did the Commission suspect discrimination: it looked as if A. & P. had merely substituted a 3% or 4% discount for the old 3% or 4% brokerage allowance it used to ask and receive. Under the new law a seller may not pay a buyer a commission in any form whatever.

In Manhattan last week, while A. & P.’s General Counsel Caruthers Ewing paced the floor of the hearing room for three impatient hours, waiting to lay the legal foundation of a constitutional test, the Federal Trade Commission tried to find out why A. & P. thought there was any difference between asking the old 4% brokerage allowance and insisting on a 4% discount. “Perhaps it’s a fine distinction,” explained A. & P.’s Charles W. Parr, “but it is an important one.”

One company that also failed to see the distinction was big California Packing Corp. There had been talk of relegating California Packing to the “unsatisfactory list” but since A. & P. could not very well refuse to handle nationally-advertised Del Monte brands, it merely resorted to what was referred to in an A. & P. general order as “putting on the heat.” Although California Packing was only trying to stay within the law with a policy of one-price-to-all, A. & P. clerks made strenuous efforts to substitute other brands for Del Monte, buying was cut to a hand-to-mouth basis to annoy California Packing as much as possible, and orders were placed through brokers so that California Packing had to pay a 4% commission anyway. ‘This is not spite,” said Grocer Parr. “This is business!”

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