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U.S. Supreme Court

FTC v. Consolidated Foods Corp., 380 U.S. 592 (1965)

Federal Trade Commission v. Consolidated Foods Corp.

No. 422

Argued March 10-11, 1965

Decided April 28, 1965

380 U.S. 592


Respondent, a large, diversified company, which owns food processing plants and a network of wholesale and retail food stores, in 1951 acquired Gentry, Inc., a manufacturer of dehydrated onion and garlic. Gentry, before the merger, had about 32% of the sales of those products, and, with its chief competitor, accounted for about 90% of the total industry sales. By 1958, in an expanding market, Gentry had 35% of the sales, and the combined share with its principal competitor remained about 90%. After the merger, respondent attempted to induce reciprocal buying of Gentry's products by respondent's suppliers. The Federal Trade Commission held that the acquisition violated § 7 of the Clayton Act, as the opportunity for reciprocal buying in this oligopolistic industry created a probability of a substantial lessening of competition and ordered divestiture. The Court of Appeals reversed, finding no substantial impact on the market in the light of ten years of post-acquisition experience.


1. Post-acquisition evidence of the effect of the merger upon competition is entitled to consideration in determining whether a merger violates § 7, but it must not be given conclusive weight or allowed to override all probabilities. P. 380 U. S. 598.

2. The finding by the Commission of the probability of reciprocal buying's leading to a lessening of competition in the instant case was supported by substantial evidence. P. 380 U. S. 600.

3. Reciprocal buying is an anticompetitive device condemned by § 7 of the Clayton Act. Pp. 380 U. S. 594-595.

329 F.2d 623 reversed. chanroblesvirtualawlibrary

Page 380 U. S. 593

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