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The Federal Trade Commission today announced a settlement agreement with Tops Markets LLC that protects consumers from the potential anticompetitive effects of Tops’ recent acquisition of the bankrupt Penn Traffic Company supermarket chain. To settle FTC charges that the acquisition was anticompetitive in several areas of New York and Pennsylvania, Tops has agreed to sell seven Penn Traffic supermarkets to FTC-approved buyers. Because the FTC adopted a flexible process for reviewing the potential anticompetitive effects of the acquisition, none of the 79 Penn Traffic stores was liquidated in the bankruptcy proceeding.

In November 2009, Penn Traffic filed for Chapter 11 bankruptcy. Through an expedited bankruptcy proceeding, Tops bought all of Penn Traffic’s assets, including 79 supermarkets in New York, Pennsylvania, Vermont, and New Hampshire, for approximately $85 million. The acquisition, however, raised competition issues in several areas of New York and Pennsylvania.

Because a full FTC investigation before the deal was completed could have led the bankruptcy court to liquidate the Penn Traffic supermarket assets, the FTC staff reached an agreement with Tops that allowed the transaction to close immediately, while allowing staff to complete its review after the deal was completed. At the same time, Tops agreed to keep all the newly acquired Penn Traffic stores open and subsequently to sell any stores that posed competitive concerns for the FTC.

Tops is a New York-based company, with its principal place of business in Williamsville, New York. Before the acquisition, it owned and operated 71 supermarkets in New York and Pennsylvania, all under the Tops name. Penn Traffic is a Delaware company headquartered in Syracuse, New York. Before the acquisition, it operated 70 supermarkets in New York, Pennsylvania, Vermont, and New Hampshire under the Bi-Lo, P&C Foods, and Quality Markets banners.

Through its investigation, the FTC staff found five local areas where competition was an issue: Bath, Cortland, Ithaca, and Lockport, New York; and Sayre, Pennsylvania. In these markets, absent a remedy, staff found that Tops’ acquisition of Penn Traffic would be anticompetitive and likely would lead to higher grocery prices for consumers. In each market there are no more than three supermarkets within a 10- to 15-mile area. Consistent with past investigations, staff concluded that other chains such as Aldi’s, buying clubs, and other food stores would not constrain prices after the merger was completed.

Further, in many of these geographic areas, staff found that new competitors were unlikely to enter the market quickly enough to prevent the acquisition’s anticompetitive effects. And, in those markets where entry might occur in the future, staff found that despite the new competition, the markets would still be highly concentrated and the transaction, therefore, anticompetitive.

The settlement order announced today requires Tops to sell seven Penn Traffic supermarkets to an FTC-approved buyer within three months. It also requires Tops and its parent company Holdco LLC to do everything necessary to facilitate the sale and operation of the seven supermarkets in Bath, Cortland, Ithaca (two stores), and Lockport, New York; and Sayre, Pennsylvania (two stores).

The FTC vote approving the complaint and proposed settlement order was 5-0. The order will be subject to public comment for 30 days, until September 7, 2010, after which the Commission will decide whether to make it final. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. To submit a comment electronically, please click on:

NOTE: The Commission issues a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of a complaint is not a finding or ruling that the respondent has violated the law. 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 up to $16,000.

Copies of the complaint, consent order, and an analysis to aid in public comment can be found on the FTC’s website at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to, or write to the Office of Policy and Coordination, Room 383, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at

(FTC File No. 101-0074)

Contact Information

Mitchell J. Katz
Office of Public Affairs
Jeffrey Perry
Bureau of Competition