FOR IMMEDIATE RELEASE                                          AT
THURSDAY, JULY 20, 1995                            (202) 616-2771
                                               TDD (202) 514-1888
                                 
   JUSTICE DEPARTMENT REQUIRES TWO MAJOR BREAD MANUFACTURERS TO
CHANGE THEIR PROPOSED MERGER--CONSUMERS IN CALIFORNIA, MIDWEST WILL
BENEFIT
                                 

     WASHINGTON, D.C. -- The Department of Justice has taken
steps today to keep the proposed merger of two of the country's
largest manufacturers of white bread from leading to higher
prices.
     The Department's Antitrust Division said the acquisition of
Continental Baking Company, the nation's largest wholesale baker
and the maker of Wonder bread, by Interstate Bakeries
Corporation, the third largest wholesale baker and the maker of
such popular brands as Weber's, Sunbeam and Butternut, threatened
to drive up white bread prices in at least five markets--Los
Angeles, San Diego, Chicago, Milwaukee and Central Illinois.
     The Department filed a complaint and proposed settlement
today in U.S. District Court in Chicago.  The settlement, if
approved by the court, would eliminate the transaction's
potential harm to competition and would settle the suit. 
     "If Interstate Bakeries, with its popular brands, takes
control of Continental's Wonder brand, the vigorous competition
that has existed between them would be reduced.  This means that
consumers could pay higher prices to put white bread in their
grocery baskets," said Anne K. Bingaman, Assistant Attorney
General in charge of the Antitrust Division.
     Continental, based in St. Louis, is a wholly-owned
subsidiary of Ralston Purina.  It had revenues of $1.9 billion in
1994.  Interstate, is based in Kansas City, and had revenues of
$1.1 billion in 1994.  
     The complaint alleges that the acquisition would reduce
competition for white pan bread in five local markets--San Diego
and Los Angeles in Southern California, Chicago, Milwaukee and
Central Illinois including Peoria, Springfield, Champaign and
Urbana.  The number of sellers of branded white bread would be
reduced from two to one in both the Southern California and
Central Illinois markets and from three to two in the Chicago and
Milwaukee markets, the Department said.
     To remedy the Department's concerns, Interstate has agreed
to sell, in each of the different geographic areas where the
transaction may have an anticompetitive effect, either the Wonder
brand or one of Interstate's brands of premium white pan bread--
Weber's in Southern California, Butternut in Chicago, Mrs. Karl's
in Milwaukee, and Butternut and Sunbeam in Central Illinois.
     Interstate must also sell any other assets, including bread
plants and route systems, that may be needed by the purchaser to
maintain the level of sales that the divested brand has in the
market place.
     "I grew up on white bread and bologna.  This divestiture
means that today's school kids will still be able to carry
affordable white bread sandwiches in their lunchboxes,"
said Bingaman.
     As required by the Tunney Act, the proposed consent decree
will be published in the Federal Register, along with the
Department's competitive impact statement.  Any person may submit
written comments concerning the proposed decree during a 60-day
comment period to Anthony V. Nanni, Chief, Litigation I Section,
Antitrust Division, U.S. Department of Justice, 1401 H St., N.W.,
Suite 4000, Washington, D.C.  20530 (202/307-6576).
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