UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION
In the Matter of
THE KROGER CO., a corporation, and
FRED MEYER, INC.,a corporation.
File No. 991-0024
AGREEMENT CONTAINING CONSENT ORDER
The Federal Trade Commission ("Commission"), having
initiated an investigation of the proposed acquisition by The Kroger Co.
("Kroger") of Fred Meyer, Inc. ("Fred
Meyer"), and it now appearing that Kroger and Fred Meyer,
hereinafter sometimes referred to as "Proposed Respondents," are willing to
enter into an agreement containing a consent order ("Agreement") to divest
certain assets and to cease and desist from certain acts, and providing for other relief,
and that Fleming Companies, Inc. ("Fleming"), intends to purchase for resale to
another purchaser some of the assets to be divested pursuant to this Agreement and is,
accordingly, a party to the Agreement necessary for effective relief:
IT IS HEREBY AGREED by and among Proposed
Respondents and Fleming, by their duly authorized officers and attorneys, and counsel for
the Commission that:
1. Proposed Respondent Kroger is a corporation organized, existing,
and doing business under and by virtue of the laws of the State of Ohio, with its office
and principal place of business located at 1014 Vine Street, Cincinnati, Ohio 45202.
2. Proposed Respondent Fred Meyer is a corporation organized,
existing, and doing business under and by virtue of the laws of the State of Delaware,
with its office and principal place of business located at 3800 Southeast 22nd Avenue,
Portland, Oregon 97202.
3. Fleming is a corporation organized, existing and doing business
under and by virtue of the laws of the State of Oklahoma, with its principal place of
business located at 6301 Waterford Boulevard, Oklahoma City, Oklahoma 73126.
4. Proposed Respondents admit all the jurisdictional facts set forth
in the draft of complaint here attached.
5. Proposed Respondents and Fleming waive:
a. any further procedural steps;
b. the requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law;
c. all rights to seek judicial review or otherwise to challenge or
contest the validity of the Order entered pursuant to this Agreement; and
d. any claim under the Equal Access to Justice Act.
6. This Agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this Agreement is
accepted by the Commission it, together with the draft of complaint contemplated thereby,
will be placed on the public record for a period of sixty (60) days and information in
respect thereto publicly released. The Commission thereafter may either withdraw its
acceptance of this Agreement and so notify the Proposed Respondents and Fleming, in which
event it will take such action as it may consider appropriate, or issue and serve its
complaint (in such form as the circumstances may require) and decision, in disposition of
the proceeding.
7. This Agreement is for settlement purposes only and does not
constitute an admission by Proposed Respondents or Fleming that the law has been violated
as alleged in the draft of complaint here attached, or that the facts as alleged in the
draft complaint, other than jurisdictional facts, are true.
8. This Agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the Commission
pursuant to the provisions of Section 2.34 of the Commission's Rules, the Commission may,
without further notice to the Proposed Respondents or Fleming, (1) issue its complaint
corresponding in form and substance with the draft of complaint here attached and its
decision containing the following Order to divest and to cease and desist in disposition
of the proceeding, and (2) make information public with respect thereto. When so entered,
the Order shall have the same force and effect and may be altered, modified, or set aside
in the same manner and within the same time provided by statute for other orders. The
Order shall become final upon service. Delivery by the U.S. Postal Service of the
complaint and decision containing the agreed-to order to Proposed Respondents' and
Fleming's addresses as stated in this agreement shall constitute service. Proposed
Respondents and Fleming waive any right they may have to any other manner of service. The
complaint may be used in construing the terms of the Order, and no agreement,
understanding, representation, or interpretation not contained in the Order or the
Agreement may be used to vary or contradict the terms of the Order.
9. Proposed Respondents and Fleming have read the proposed complaint
and Order contemplated hereby. Proposed Respondents understand that once the Order has
been issued, they will be required to file one or more compliance reports showing that
they have fully complied with the Order. Proposed Respondents and Fleming further
understand that they may be liable for civil penalties in the amount provided by law for
each violation of the Order after it becomes final. By signing this Agreement, Proposed
Respondents and Fleming represent that they can accomplish the full relief contemplated by
this Agreement.
10. Proposed Respondents and Fleming agree to comply with the
proposed order from the date they sign the Agreement. Proposed Respondents agree that, in
the event that the Commission withdraws its acceptance of this Agreement pursuant to the
provisions of Section 2.34 of the Commission's Rules, Proposed Respondents will
continue complying with Paragraph V. of the proposed order until three (3) business days
after the Commission withdraws such acceptance.
11. Within thirty (30) days of the date on which they sign this Agreement, Proposed
Respondents shall submit an initial report, pursuant to Section 2.33 of
the Commission's Rules, setting forth in detail the manner in which they are complying,
and will comply, with the terms of Paragraphs II. and V. of the Order. Such report will
not become part of the public record unless and until the Commission accepts the Agreement
for public comment.
ORDER
I.
IT IS ORDERED that, as used in this Order, the
following definitions shall apply:
A. "Kroger" means The Kroger Co., its directors, officers,
employees, agents, representatives, predecessors, successors, and assigns; its
subsidiaries, divisions, groups, and affiliates controlled by The Kroger Co., and the
respective directors, officers, employees, agents, representatives, successors, and
assigns of each. Kroger, after consummation of the Acquisition, includes Fred Meyer.
B. "Fred Meyer" means Fred Meyer, Inc., its directors,
officers, employees, agents, representatives, predecessors, successors, and assigns; its
subsidiaries, divisions, groups, and affiliates controlled by Fred Meyer, Inc., and the
respective directors, officers, employees, agents, representatives, successors, and
assigns of each.
C. "Respondents" means Kroger and Fred Meyer, individually
and collectively.
D. "Fleming" means Fleming Companies, Inc., its directors,
officers, employees, agents, representatives, predecessors, successors, and assigns; its
subsidiaries, divisions, groups, and affiliates controlled by Fleming Companies, Inc., and
the respective directors, officers, employees, agents, representatives, successors, and
assigns of each.
E. "Commission" means the Federal Trade Commission.
F. "Acquisition" means Kroger's proposed acquisition of
Fred Meyer pursuant to the Agreement dated October 18, 1998.
G. "Assets To Be Divested" means the Schedule A
Assets, the Schedule B Assets, and the Schedule C Assets.
H. "Schedule A Assets" means the Supermarkets
identified in Schedule A of this Order and all assets, leases, properties, government
permits (to the extent transferable), customer lists, businesses and goodwill, tangible
and intangible, related to or utilized in the Supermarket business operated at those
locations, but shall not include those assets consisting of or pertaining to any of the
Respondents' trade marks, trade dress, service marks, or trade names.
I. "Schedule B Assets" means the Supermarkets
identified in Schedule B of this Order and all assets, leases, properties, government
permits (to the extent transferable), customer lists, businesses and goodwill, tangible
and intangible, related to or utilized in the Supermarket business operated at those
locations, but shall not include those assets consisting of or pertaining to any of the
Respondents' trade marks, trade dress, service marks, or trade names.
J. "Schedule B Wyoming Assets" means the
Supermarkets identified in Schedule B of this Order that are located in Green River,
Wyoming, and Rock Springs, Wyoming, and all assets, leases, properties, government permits
(to the extent transferable), customer lists, businesses and goodwill, tangible and
intangible, related to or utilized in the Supermarket business operated at those
locations, but shall not include those assets consisting of or pertaining to any of the
Respondents' trade marks, trade dress, service marks, or trade names.
K. "Schedule C Assets" means the Supermarkets
identified in Schedule C of this Order and all assets, leases, properties, government
permits (to the extent transferable), customer lists, businesses and goodwill, tangible
and intangible, related to or utilized in the Supermarket business operated at those
locations, but shall not include those assets consisting of or pertaining to any of the
Respondents' trade marks, trade dress, service marks, or trade names.
L. "Supermarket" means a full-line retail grocery store
that carries a wide variety of food and grocery items in particular product categories,
including bread and dairy products; frozen and refrigerated food
and beverage products; fresh and prepared meats and poultry; produce, including fresh
fruits and vegetables; shelf-stable food and beverage products, including canned and other
types of packaged products; staple foodstuffs, which may include salt, sugar, flour,
sauces, spices, coffee, and tea; and other grocery products, including nonfood items such
as soaps, detergents, paper goods, other household products, and health and beauty aids.
M. "Supermarkets To Be Divested" means the Supermarkets
identified in Schedule A, Schedule B, and Schedule C of this Order.
N. "Albertson's" means Albertson's, Inc., a corporation
organized, existing and doing business under and by virtue of the laws of the State of
Delaware, with its principal place of business located at East Parkcenter Boulevard,
Boise, Idaho 83726.
O. "Nash-Finch" means Nash-Finch Company, a corporation
organized, existing and doing business under and by virtue of the laws of the State of
Delaware, with its principal place of business located at 7600 France Avenue South, P.O.
Box 355, Minneapolis, Minnesota 55440.
P. "Albertson's Agreement" means the Purchase Agreement
between Albertson's and Kroger executed on March 31, 1999, for the divestiture by
Respondents to Albertson's of the Schedule A Assets.
Q. "Fleming Agreement" means the Purchase Agreements
between Fleming Companies, Inc. and Kroger executed on March 31, 1999, and April 7, 1999,
for the divestiture by Respondents to Fleming Companies, Inc. of the Schedule B Assets.
R. "Nash-Finch Agreement" means the Purchase Agreement
between Nash-Finch and Smith's Food & Drug Centers, Inc., a wholly-owned subsidiary of
Fred Meyer, executed on March 31, 1999, for the divestiture by Respondents to Nash-Finch
of the Schedule C Assets.
S. "Acquirer(s)" means Albertson's, Fleming Companies,
Inc., Nash-Finch, and/or any other entity or entities approved by the Commission to
acquire the Assets To Be Divested pursuant to this Order, individually and collectively.
T. "Third Party Consents" means all consents from any
other person, including all landlords, that are necessary to effect the complete transfer
to the Acquirer(s) of the Assets To Be Divested.
II.
IT IS FURTHER ORDERED that:
A. Respondents shall divest, absolutely and in good faith, the
Schedule A Assets to Albertson's, in accordance with the Albertson's Agreement (which
agreement shall not be construed to vary or contradict the terms of this Order), no later
than
- twenty (20) days after the date on which the Acquisition is
consummated, or
- four (4) months after the date on which Respondents sign the
Agreement Containing Consent Order,
whichever is earlier.
Provided, however, that if Respondents have divested
the Schedule A Assets to Albertson's pursuant to the Albertson's Agreement prior to the
date the Order becomes final, and if, at the time the Commission determines to make the
Order final, the Commission notifies Respondents that Albertson's is not an acceptable
acquirer or that the Albertson's Agreement is not an acceptable manner of divestiture,
then Respondents shall immediately rescind the transaction with Albertson's and shall
divest the Schedule A Assets within three (3) months of the date the Order becomes final,
absolutely and in good faith, at no minimum price, to an acquirer that receives the prior
approval of the Commission and only in a manner that receives the prior approval of the
Commission.
B. Respondents shall divest, absolutely and in good faith, the
Schedule B Assets to Fleming in accordance with the Fleming Agreement (which agreement
shall not be construed to vary or contradict the terms of this Order), no later than
- twenty (20) days after the date on which the Acquisition is
consummated, or
- four (4) months after the date on which Respondents sign the
Agreement Containing Consent Order,
whichever is earlier.
Provided, however, that if Respondents have divested
the Schedule B Assets to Fleming pursuant to the Fleming Agreement prior to the date the
Order becomes final, and if, at the time the Commission determines to make the Order
final, the Commission notifies Respondents that Fleming is not an acceptable acquirer or
that the Fleming Agreement is not an acceptable manner of divestiture, then Respondents
shall immediately rescind the transaction with Fleming, and shall divest the Schedule B
Assets within three (3) months of the date the Order becomes final, absolutely and in good
faith, at no minimum price, to an acquirer that receives the prior approval of the
Commission and only in a manner that receives the prior approval of the Commission.
C. Respondents shall divest, absolutely and in good faith, the
Schedule C Assets to Nash-Finch, in accordance with the Nash-Finch Agreement (which
agreement shall not be construed to vary or contradict the terms of this Order), no later
than
- twenty (20) days after the date on which the Acquisition is consummated, or
- four (4) months after the date on which Respondents sign the Agreement Containing
Consent Order,
whichever is earlier.
Provided, however, that if Respondents have divested the Schedule C
Assets to Nash-Finch pursuant to the Nash-Finch Agreement prior to the date the Order
becomes final, and if, at the time the Commission determines to make the Order final, the
Commission notifies Respondents that Nash-Finch is not an acceptable acquirer or that the
Nash-Finch Agreement is not an acceptable manner of divestiture, then Respondents shall
immediately rescind the transaction with Nash-Finch and shall divest the Schedule C Assets
within three (3) months of the date the Order becomes final, absolutely and in good faith,
at no minimum price, to an acquirer that receives the prior approval of the Commission and
only in a manner that receives the prior approval of the Commission.
D. Respondents shall obtain all required Third Party Consents prior to the closing of
the Albertson's Agreement, the Fleming Agreement, the Nash-Finch Agreement, or any other
agreement pursuant to which the Assets To Be Divested are divested to an Acquirer.
E. The purpose of the divestitures is to ensure the continuation of
the Assets To Be Divested as ongoing viable enterprises engaged in the Supermarket
business and to remedy the lessening of competition resulting from the Acquisition alleged
in the Commission's complaint.
III.
IT IS FURTHER ORDERED that, if Fleming purchases
any Schedule B Wyoming Assets, Fleming shall sell or otherwise convey, directly or
indirectly, any such Schedule B Wyoming Assets, only to an Acquirer approved by the
Commission and only in a manner that receives the prior approval of the Commission.
Fleming shall comply with this Paragraph until three (3) years after the date this Order
becomes final.
IV.
IT IS FURTHER ORDERED that:
A. If Respondents have not divested, absolutely and in good faith
and with the Commission's prior approval, the Assets To Be Divested within the time
required by Paragraph II of this Order, the Commission may appoint a trustee to divest the
Assets To Be Divested. In the event that the Commission or the Attorney General brings an
action pursuant to Section 5(l) of the Federal Trade Commission Act, 15
U.S.C. § 45(l), or any other statute enforced by the Commission,
Respondents shall consent to the appointment of a trustee in such action. Neither the
appointment of a trustee nor a decision not to appoint a trustee under this Paragraph
shall preclude the Commission or the Attorney General from seeking civil penalties or any
other relief available to it, including a court-appointed trustee, pursuant to
Section 5(l) of the Federal Trade Commission Act, or any other statute
enforced by the Commission, for any failure by the Respondents to comply with this Order.
B. If a trustee is appointed by the Commission or a court pursuant
to Paragraph IV.A. of this Order, Respondents shall consent to the following terms and
conditions regarding the trustee's powers, duties, authority, and responsibilities:
1. The Commission shall select the trustee, subject to the consent
of Respondents, which consent shall not be unreasonably withheld. The trustee shall be a
person with experience and expertise in acquisitions and divestitures. If Respondents have
not opposed, in writing, including the reasons for opposing, the selection of any proposed
trustee within ten (10) days after receipt of written notice by the staff
of the Commission to Respondents of the identity of any proposed trustee, Respondents
shall be deemed to have consented to the selection of the proposed trustee.
2. Subject to the prior approval of the Commission, the trustee
shall have the exclusive power and authority to divest the Assets To Be Divested.
3. Within ten (10) days after appointment of the trustee,
Respondents shall execute a trust agreement that, subject to the prior approval of the
Commission and, in the case of a court-appointed trustee, of the court, transfers to the
trustee all rights and powers necessary to permit the trustee to effect each divestiture
required by this Order.
4. The trustee shall have twelve (12) months from the date the
Commission or court approves the trust agreement described in Paragraph IV.B.3. to
accomplish the divestitures, which shall be subject to the prior approval of the
Commission. If, however, at the end of the twelve-month period, the trustee has submitted
a plan of divestiture or believes that divestiture can be achieved within a reasonable
time, the divestiture period may be extended by the Commission, or, in the case of a
court-appointed trustee, by the court; provided, however, the Commission may extend the
period for no more than two (2) additional periods.
5. The trustee shall have full and complete access to the personnel,
books, records, and facilities related to the Assets To Be Divested or to any other
relevant information, as the trustee may request. Respondents shall develop such financial
or other information as such trustee may reasonably request and shall cooperate with the
trustee. Respondents shall take no action to interfere with or impede the trustee's
accomplishment of the divestitures. Any delays in divestiture caused by Respondents shall
extend the time for divestiture under this Paragraph in an amount equal to the delay, as
determined by the Commission or, for a court-appointed trustee, by the court.
6. The trustee shall use his or her best efforts to negotiate the
most favorable price and terms available in each contract that is submitted to the
Commission, subject to Respondents' absolute and unconditional obligation to divest
expeditiously at no minimum price. The divestitures shall be made in the manner and to the
acquirer or acquirers as set out in Paragraph II of this Order; provided, however, if the
trustee receives bona fide offers for an asset to be divested from more than one acquiring
entity, and if the Commission determines to approve more than one such acquiring entity,
the trustee shall divest such asset to the acquiring entity or entities selected by Kroger
from among those approved by the Commission.
7. The trustee shall serve, without bond or other security, at the
cost and expense of Respondents, on such reasonable and customary terms and conditions as
the Commission or a court may set. The trustee shall have the authority to employ, at the
cost and expense of Respondents, such consultants, accountants, attorneys, investment
bankers, business brokers, appraisers, and other representatives and assistants as are
necessary to carry out the trustee's duties and responsibilities. The trustee shall
account for all monies derived from the divestitures and all expenses incurred. After
approval by the Commission and, in the case of a court-appointed trustee, by the court, of
the account of the trustee, including fees for his or her services, all remaining monies
shall be paid at the direction of Kroger, and the trustee's power shall be terminated. The
trustee's compensation shall be based at least in significant part on a commission
arrangement contingent on the trustee's divesting the Assets To Be Divested.
8. Respondents shall indemnify the trustee and hold the trustee
harmless against any losses, claims, damages, liabilities, or expenses arising out of, or
in connection with, the performance of the trustee's duties, including all reasonable fees
of counsel and other expenses incurred in connection with the preparation for or defense
of any claim, whether or not resulting in any liability, except to the extent that such
liabilities, losses, damages, claims, or expenses result from misfeasance, gross
negligence, willful or wanton acts, or bad faith by the trustee.
9. If the trustee ceases to act or fails to act diligently, a
substitute trustee shall be appointed in the same manner as provided in Paragraph IV.A. of
this Order.
10. The Commission or, in the case of a court-appointed trustee, the
court, may on its own initiative or at the request of the trustee issue such additional
orders or directions as may be necessary or appropriate to accomplish each divestiture
required by this Order.
11. In the event that the trustee determines that he or she is
unable to divest the Assets To Be Divested in a manner consistent with the Commission's
purpose as described in Paragraph II, the trustee may divest additional ancillary assets
of Respondents and effect such arrangements as are necessary to satisfy the requirements
of this Order.
12. The trustee shall have no obligation or authority to operate or
maintain the Assets To Be Divested.
13. The trustee shall report in writing to Respondents and the
Commission every sixty (60) days concerning the trustee's efforts to accomplish each
divestiture required by this Order.
V.
IT IS FURTHER ORDERED that Respondents shall
maintain the viability, marketability, and competitiveness of the Assets To Be Divested,
and shall not cause the wasting or deterioration of the Assets To Be Divested, nor shall
they cause the Assets To Be Divested to be operated in a manner inconsistent with
applicable laws, nor shall they sell, transfer, encumber or otherwise impair the
viability, marketability or competitiveness of the Assets To Be Divested. Respondents
shall comply with the terms of this Paragraph until such time as Respondents have divested
the Assets To Be Divested pursuant to the terms of this order. Respondents shall conduct
or cause to be conducted the business of the Assets To Be Divested in the regular and
ordinary course and in accordance with past practice (including regular repair and
maintenance efforts) and shall use their best efforts to preserve the existing
relationships with suppliers, customers, employees, and others having business relations
with the Assets To Be Divested in the ordinary course of business and in accordance with
past practice. Respondents shall not terminate the operation of any Supermarket To Be
Divested. Respondents shall continue to maintain the inventory of each Supermarket To Be
Divested at levels and selections (e.g., stock-keeping units) consistent with those
maintained by such Respondent(s) at such Supermarket in the ordinary course of business
consistent with past practice. Respondents shall use best efforts to keep the organization
and properties of each Supermarket To Be Divested intact, including current business
operations, physical facilities, working conditions, and a work force of equivalent size,
training, and expertise associated with the Supermarket. Included in the above
obligations, Respondents shall, without limitation:
A. maintain operations and departments and not reduce hours at each Supermarket To Be
Divested;
B. not transfer inventory from any Supermarket To Be Divested other than in the
ordinary course of business consistent with past practice;
C. make any payment required to be paid under any contract or lease when due, and
otherwise pay all liabilities and satisfy all obligations, in each case in a manner
consistent with past practice;
D. maintain the books and records of each Supermarket To Be Divested;
E. not display any signs or conduct any advertising (e.g., direct mailing,
point-of-purchase coupons) that indicates that any Respondent is moving its operations to
another location, or that indicates a Supermarket To Be Divested will close;
F. not conduct any "going out of business," "close-out,"
"liquidation" or similar sales or promotions at or relating to any Supermarket
To Be Divested; and
G. not change or modify in any material respect the existing advertising practices,
programs and policies for any Supermarket To Be Divested, other than changes in the
ordinary course of business consistent with past practice for Supermarkets of the
Respondents not being closed or relocated.
VI.
IT IS FURTHER ORDERED that, for a period of ten (10) years from the
date this order becomes final, Kroger shall not, directly or indirectly, through
subsidiaries, partnerships, or otherwise, without providing advance
written notification to the Commission:
A. Acquire any ownership or leasehold interest in any facility that
has operated as a Supermarket within six (6) months prior to the date of such proposed
acquisition in Yavapai, Cochise, or Yuma counties in Arizona; Laramie or Sweetwater
counties in Wyoming; or Carbon County in Utah.
B. Acquire any stock, share capital, equity, or other interest in
any entity that owns any interest in or operates any Supermarket or owned any interest in
or operated any Supermarket within six (6) months prior to such proposed acquisition in Yavapai,
Cochise, or Yuma counties in Arizona; Laramie or Sweetwater counties in Wyoming; or Carbon
County in Utah.
Provided, however, that advance written notification shall
not apply to the construction of new facilities by Kroger or the acquisition of or leasing
of a facility that has not operated as a Supermarket within six (6) months prior to
Kroger's offer to purchase or lease.
Said notification shall be given on the Notification and Report Form
set forth in the Appendix to Part 803 of Title 16 of the Code of Federal Regulations as
amended (hereinafter referred to as "the Notification"), and shall be prepared
and transmitted in accordance with the requirements of that part, except that no filing
fee will be required for any such notification, notification shall be filed with the
Secretary of the Commission, notification need not be made to the United States Department
of Justice, and notification is required only of Kroger and not of any other party to the
transaction. Kroger shall provide the Notification to the Commission at least thirty days
prior to consummating any such transaction (hereinafter referred to as the "first
waiting period"). If, within the first waiting period, representatives of the
Commission make a written request for additional information or documentary material
(within the meaning of 16 C.F.R. § 803.20), Kroger shall not consummate the
transaction until twenty days after substantially complying with such request. Early
termination of the waiting periods in this Paragraph may be requested and, where
appropriate, granted by letter from the Bureau of Competition. Provided, however, that
prior notification shall not be required by this Paragraph for a transaction for which
notification is required to be made, and has been made, pursuant to Section 7A of the
Clayton Act, 15 U.S.C. § 18a.
VII.
IT IS FURTHER ORDERED that, for a period of ten
(10) years commencing on the date this Order becomes final:
A. Kroger shall neither enter into nor enforce any agreement that
restricts the ability of any person (as defined in Section 1(a) of the Clayton Act, 15
U.S.C. § 12(a)) that acquires any Supermarket, any leasehold interest in any
Supermarket, or any interest in any retail location used as a Supermarket on or after
January 1, 1998, in Yavapai, Cochise, or Yuma counties in Arizona; Laramie or
Sweetwater counties in Wyoming; or Carbon County in Utah, to operate a
Supermarket at that site if such Supermarket was formerly owned or operated by Kroger.
B. Kroger shall not remove any fixtures or equipment from a property
owned or leased by Kroger in Yavapai, Cochise, or Yuma counties in Arizona; Laramie or
Sweetwater counties in Wyoming; or Carbon County in Utah, that is no longer in
operation as a Supermarket, except (1) prior to and as part of a sale, sublease,
assignment, or change in occupancy of such Supermarket; or (2) to relocate such fixtures
or equipment in the ordinary course of business to any other Supermarket owned or operated
by Kroger.
VIII.
IT IS FURTHER ORDERED that:
A. Within thirty (30) days after the date Respondents signed the
Agreement Containing Consent Order and every thirty (30) days thereafter until Respondents
have fully complied with the provisions of Paragraphs II, IV, and V of this Order,
Respondents shall submit to the Commission verified written reports setting forth in
detail the manner and form in which they intend to comply, are complying, and have
complied with Paragraphs II, IV, and V of this Order. Respondents shall include in their
compliance reports, among other things that are required from time to time, a full
description of the efforts being made to comply with Paragraphs II, IV, and V of the
Order, including a description of all substantive contacts or negotiations for
divestitures and the identity of all parties contacted. Respondents shall include in their
compliance reports copies of all written communications to and from such parties, all
internal memoranda, and all reports and recommendations concerning divestiture.
B. One (1) year from the date this Order
becomes final, annually for the next nine (9) years on the anniversary of the date this
Order becomes final, and at other times as the Commission may require, Kroger shall file
verified written reports with the Commission setting forth in detail the manner and form
in which it has complied and is complying with this Order.
IX.
IT IS FURTHER ORDERED that Respondents shall notify
the Commission at least thirty (30) days prior to any proposed change in the corporate
Respondents, such as dissolution, assignment, sale resulting in the emergence of a
successor corporation, or the creation or dissolution of subsidiaries or any other change
in Respondents that may affect compliance obligations arising out of the Order.
X.
IT IS FURTHER ORDERED that, for the purpose of
determining or securing compliance with this Order, upon written request with five (5)
days' notice, Respondents and Fleming shall permit any duly authorized representative of
the Commission:
A. Access, during office hours and in the presence of counsel, to
inspect the facilities and to inspect and copy all books, ledgers, accounts,
correspondence, memoranda and other records and documents in the possession or under the
control of Respondents or Fleming relating to any matters contained in this Order; and
B. Without restraint or interference from Respondents and Fleming,
to interview Respondents, Fleming, or officers, directors, or employees of Respondents or
Fleming in the presence of counsel.
Signed this _____ day of April, 1999
THE KROGER CO., a corporation
By: ____________________________________
FRED MEYER, INC., a corporation
By: ____________________________________
FLEMING COMPANIES, INC., a corporation
By: ____________________________________
FEDERAL TRADE COMMISSION
By: ____________________________________
Jill M. Frumin
Attorney
Bureau of Competition
APPROVED:
____________________________________
Richard Liebeskind
Deputy Assistant Director
Bureau of Competition
____________________________________
Phillip L. Broyles
Assistant Director
Bureau of Competition
____________________________________
Richard G. Parker
Senior Deputy Director
Bureau of Competition
____________________________________
William J. Baer
Director
Bureau of Competition
Schedule A
All Supermarkets in Price, Utah, in which Kroger had a financial
interest prior to the consummation of the Acquisition, including, but not limited to, the
Supermarket operated under the name "City Market" at 760 Price River Drive,
Price, Utah 84501.
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Schedule B
1. All Supermarkets in Rock Springs, Wyoming, in which Kroger had a
financial interest prior to the consummation of the Acquisition, including, but not
limited to, the Supermarket operated under the name "City Market" at 401 N.
Center, Rock Springs, Wyoming 82901.
2. All Supermarkets in Green River, Wyoming, in which Kroger had a
financial interest prior to the consummation of the Acquisition, including, but not
limited to, the Supermarket operated under the name "City Market" at 400 Uinta
Avenue, Green River, Wyoming 82935.
3. All Supermarkets in Prescott, Arizona, in which Kroger had a
financial interest prior to the consummation of the Acquisition, including, but not
limited to, the Supermarket operated under the name "Fry's" at 1519 W. Gurley
Road, Prescott, Arizona 86301.
4. All Supermarkets in Yuma, Arizona, in which Kroger had a
financial interest prior to the consummation of the Acquisition, including, but not
limited to, the Supermarket operated under the name "Fry's" at 2600 West 16th
Street, Yuma, Arizona 85364.
5. All Supermarkets in Sierra Vista, Arizona, in which Fred Meyer
had a financial interest prior to the consummation of the Acquisition, including, but not
limited to, the Supermarket operated under the name "Smith's" at 85 South
Highway 92, Sierra Vista, Arizona 85635.
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Schedule C
All Supermarkets in Cheyenne, Wyoming, in which Fred Meyer had a
financial interest prior to the consummation of the Acquisition, including, but not
limited to:
1. the Supermarket operated under the name "Smith's" at
1600 East Pershing Boulevard 82001, Cheyenne, Wyoming; and
2. the Supermarket operated under the name "Smith's" at
3745 East Lincoln Way, Cheyenne, Wyoming 82001.
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