Frito-Lay Investigations : 03/05/1996: Memorandum

Memorandum

Preliminary investigation authority is requested for the following matter:

Issues and Analysis:

Frito-Lay, Inc. ("Frito-Lay") is by far the nation's largest producer of salted snack foods, a market of more than $15 billion annually. Frito-Lay had sales of $5 billion in 1994, giving it a [REDACTED TEXT (b)(5)] of that market. Frito-Lay is the only manufacturer of salted snack foods that distributes on a national, regional and local level. While there are numerous regional manufacturers, none has a national [REDACTED TEXT ] No other national manufacturer remains. Borden exited the market several years ago, and Eagle, as mentioned below, is in the process of exiting.

We have received complaints from [REDACTED TEXT (b7D)] alleging that Frito-Lay is inducing retailers of salted snack foods to enter into exclusive arrangements for the purpose, and with the effect, of excluding competitors. According to [REDACTED TEXT (b7D)] Frito-Lay uses various tools to effect its exclusionary goal, including shelf space incentives, rebates and promotional programs that persuade the retailer to drop competitors' products or to refuse to carry them. [REDACTED TEXT (b7D)]

[REDACTED TEXT (b7D)]

Past Investigations:

Proposed Acquisition of Certain Assets of Eagle Snacks. Inc. By Frito-Lay
The Litigation II staff is currently investigating the proposed acquisition of four manufacturing facilities of Eagle Snacks, which was the only other national brand in the salted snack foods market. We are already coordinating investigative efforts and will continue to do so. [REDACTED TEXT (b)(3)]

1. DOJ File Number:

2. Individual Completing Form: Nina Hale
Phone: 307-0892

3. Matter Type: PI Preliminary Investigation

4. Title:
2096 Frito-Lay, Inc. - Exclusive Dealing

5. File Information:
Companion DOJ File Number:
GJ DOJ File Number

6. SIC Code(s):
(See SIC Code Book)

List Primary Code First
2096
2052

7. Is this a Special Project involving legislation or legislative proposals? No

8. Investigated Parties Name
Frito-Lay. Inc. Type: Corp

9. Staff Assigned: SSN and Last Name
Lead - [REDACTED TEXT (b7)] Hale

10. Sections:
Section/Office Organization Code
TEA 3500

11. Geographic Description:
Nationwide

12. Aggregate Annual Dollar Volume of Commerce of Defendants - Year 1994:
$500 million or over

14. Additional Information:

Frito Lay - Snack Food Investigation 60-2096-0002
Identification of Matter (Case Number, Name, etc. )

I, Jill Ptacek , hereby certify that to the best of my knowledge, neither I nor my spouse, dependent child, general partner, or any organization which I am serving as an officer, director, trustee, general partner or employee, or any person or organization with whom I am negotiating or have an arrangement concerning prospective employment has a financial interest in this matter .

I further certify that this matter will not affect the financial interests of any member of my household. Also, no member of my household; no relative with whom I have a close relationship; no one with whom my spouse, parent or dependent child has or seeks employment; and no organization with which I am seeking a business relationship nor which I now serve actively or have served within the last year are parties or represent a party to the matter.

I also acknowledge my responsibility to disclose the acquisition of any financial or personal interest as described above that would be affected by the matter, and to disclose any interest I, or anyone noted above, has in any person or organization that does become involved in, or is affected at a later date by, the conduct of this matter.

Frito Lay
Identification of Matter (Case Number, Name, etc. )
60-2096-0002

I, Nina Hale , hereby certify that to the best of my knowledge, neither I nor my spouse, dependent child, general partner, or any organization which I am serving as an officer, director, trustee, general partner or employee, or any person or organization with whom I am negotiating or have an arrangement concerning prospective employment has a financial interest in this matter .

I further certify that this matter will not affect the financial interests of any member of my household. Also, no member of my household; no relative with whom I have a close relationship; no one with whom my spouse, parent or dependent child has or seeks employment; and no organization with which I am seeking a business relationship nor which I now serve actively or have served within the last year are parties or represent a party to the matter.

I also acknowledge my responsibility to disclose the acquisition of any financial or personal interest as described above that would be affected by the matter, and to disclose any interest I, or anyone noted above, has in any person or organization that does become involved in, or is affected at a later date by, the conduct of this matter.

Frito Lay, 60-2096-0002
Identification of Matter (Case Number, Name, etc. )

I, Nina Hale , hereby certify that to the best of my knowledge, neither I nor my spouse, dependent child, general partner, or any organization which I am serving as an officer, director, trustee, general partner or employee, or any person or organization with whom I am negotiating or have an arrangement concerning prospective employment has a financial interest in this matter .

I further certify that this matter will not affect the financial interests of any member of my household. Also, no member of my household; no relative with whom I have a close relationship; no one with whom my spouse, parent or dependent child has or seeks employment; and no organization with which I am seeking a business relationship nor which I now serve actively or have served within the last year are parties or represent a party to the matter.

I also acknowledge my responsibility to disclose the acquisition of any financial or personal interest as described above that would be affected by the matter, and to disclose any interest I, or anyone noted above, has in any person or organization that does become involved in, or is affected at a later date by, the conduct of this matter.