FMI Urges Changes in FTC Merger Policies To Help Independents Purchase Divested Stores

Washington, DC — June 18, 2002 — The Food Marketing Institute (FMI) today urged the Federal Trade Commission (FTC) to reevaluate its divestiture policies — especially those that limit the ability of independents and small family companies to buy divested stores. FMI made this recommendation in comments submitted to the FTC at a workshop on merger investigations and remedies.

In particular, FMI asked the FTC not to require divestitures of an entire package of stores to a single buyer. “This policy makes it almost impossible for smaller companies to purchase divested stores,” said FMI President and CEO Tim Hammonds. “Independents or small chains are often interested in buying a portion of such stores, but a single-buyer policy prevents them from doing so.”

FMI told the agency that its traditional approach has resulted in a widely held perception of bias against smaller operators.

In addition, FMI encouraged the commission to be more open to allowing companies to buy divested stores in the markets where they operate. Such smaller food retailers often know more about local market conditions, increasing the likelihood that the stores they purchase will succeed.

FMI noted that independents are supported by grocery wholesalers, bringing them services and resources that enable them to compete effectively with larger companies.

Added Michael Sansolo, president of FMI’s Independent Operator Division, “Changes in these policies would help to level the playing field, giving independents and smaller chains realistic opportunities for become even stronger competitors to the benefit of consumers."