New York-based supermarket operators The Golub Corp., which owns the Price Chopper chain, and Tops Market Corp. have agreed to divest 12 Tops supermarkets to C&S Wholesale Grocers to settle Federal Trade Commission charges that their proposed merger would likely be anticompetitive in 11 local markets across upstate New York and Vermont. The order also requires the parties to obtain the prior approval of the FTC before selling or acquiring supermarkets in the affected markets.
According to the FTC’s complaint, the parties’ proposed merger is likely to substantially lessen competition for the sale of grocery products in the New York communities of Cooperstown, Cortland, Oneida, Owego, Norwich, Warrensburg, Lake Placid, Rome, Watertown, and Plattsburgh; and in Rutland, Vermont. In these 11 local areas, the FTC complaint noted, the proposed merger would result in highly concentrated markets. According to the FTC complaint, without the divestitures ordered, the merger is likely to allow the newly merged company to increase prices above competitive levels, unilaterally or by coordinating with competitors.
The proposed Decision and Order requires Price Chopper and Tops to divest the 12 Tops stores and related assets to C&S on a rolling basis, beginning by Jan. 17, 2022, at a rate of two stores per week for six weeks. The settlement agreement also includes an Order to Maintain Assets, which requires the companies to operate and adequately maintain the stores to be sold until they are divested. If the Commission determines that C&S is not an acceptable buyer before the Commission issues the Decision and Order, the companies must divest the assets to another Commission-approved buyer. The order also requires Price Chopper to obtain the prior approval of the Commission before acquiring any supermarkets in the affected markets.
The proposed Decision and Order also contains a prior approval provision prohibiting C&S from selling acquired stores for a period of three years after the order is issued, except to an acquirer that receives the prior approval of the Commission. For an additional seven-year period, C&S is required to obtain prior approval from the Commission to sell an acquired store to a buyer that operates one or more supermarkets in the same county.
Further details about the consent agreement are set forth in the analysis to aid public comment for this matter. Appendix C of the Decision and Order lists the addresses of all the stores to be divested.
The FTC appreciates the collaboration of the New York Attorney General’s Office in investigating this case.
The Commission vote to accept the proposed consent order for public comment was 4-0. The FTC will publish the consent agreement package in the Federal Register shortly. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register. Once processed, comments will be posted on Regulations.gov.
NOTE: 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 $43,792.