The Federal Trade Commission has reached a settlement agreement in connection with the merger of Jitney-Jungle Stores of America, Inc. and Delchamps, Inc. that the agency says will keep supermarket prices competitive in the Gulfport-Biloxi, Hattiesburg and Vicksburg areas of Mississippi, and in the Pensacola area of Florida. The settlement would resolve the FTC charges that Jitney-Jungle's $228 million acquisition of outstanding Delchamps shares would violate antitrust laws by substantially reducing competition among supermarket operators in those areas. To restore competition, the settlement would require Jitney-Jungle to divest a total of 10 supermarkets to Supervalu Inc. Supervalu may in turn divest the stores to R & M Foods, Inc. and Southeast Foods, Inc., under the settlement.
Jitney-Jungle, a majority of which is owned by Bruckmann, Rosser, Sherrill & Co., L.P. of Greenwich, Connecticut, is based in Jackson, Mississippi, and shares an address with Delta Acquisition Corporation, which was formed to acquire the outstanding Delchamps shares. Jitney-Jungle operates 105 supermarkets in the states of Alabama, Arkansas, Louisiana, Mississippi, Florida and Tennessee, and is the largest supermarket operator in Mississippi with 72 stores. Jitney-Jungle operates these stores under the names "Jitney-Jungle," "Sack and Save," "Mega Market," "Mega Pantry," and "Jitney Premier." Delchamps, based in Mobile, Alabama, operates 118 supermarkets under the "Delchamps" name. Supervalu, a large wholesaler of supermarket products and which is not named as a respondent in this case, is based in Eden Prairie, Minnesota.
According to the FTC complaint detailing the charges in this case, Jitney-Jungle and Delchamps are direct competitors in the markets at issue, which are highly concentrated. New entry into these markets would not be timely, likely or sufficient to prevent price increases, reduced quality and selection, or other anticompetitive effects in these areas, the FTC alleged.
The proposed consent agreement that the FTC has negotiated with the respondents would permit the parties to complete the acquisition so long as Jitney-Jungle divests five of its own stores and five Delchamps stores to Supervalu within the later of five months from now or one month after the consent agreement becomes final. (FTC consent agreements are announced for a period of public comments before the Commission determines whether to make them final.) If Supervalu acquires the to-be-divested supermarkets within three months after the order is final, it would be permitted to divest the stores to either R & M Foods, Inc. of Hattiesburg, Mississippi, or Southeast Foods, Inc., of Monroe, Louisiana, so long as the divestiture agreement meets with Commission approval. Divestiture of these assets by Supervalu to any other entity within three years thereafter also would require the Commission's prior approval.
The respondents also have signed an accompanying agreement requiring them to maintain the marketability and viability of the stores to be sold pending divestiture.
The stores to be divested are the Delchamps stores at:
and the Jitney-Jungle stores at:
The proposed consent order also would require the respondents, for 10 years, to notify the Commission before acquiring any supermarket in Hancock, Harrison, Jackson, Lamar, Forrest and Warren Counties in Mississippi, and Escambia County in Florida. Further, they would be prohibited from attempting to restrict the ability of others to operate any supermarket they formerly owned in those counties.
The Commission vote to announce this agreement for public comments was 4-0, with Commissioner Mary L. Azcuenaga concurring with respect to the Vicksburg market and dissenting with respect to the other markets. A summary of the agreement will be published in the Federal Register shortly, and the Commission will accept public comments for 60 days. Comments should be addressed to the FTC, Office of the Secretary, 600 Pennsylvania Avenue N.W., Washington, D.C. 20580.
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 $11,000.
Copies of the documents associated with this case are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. Consent agreements subject to public comment also are available by calling 202-326-3627. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. 971 0093)