Frito-Lay Investigations : 04/23/1998: Memorandum

Memorandum PENDING

I. Background and Summary

We opened this investigation in April 1996, on the strength of complaints from competitors that Frito-Lay, Inc. ("Frito") has exclusive contracts with retailers. [REDACTED TEXT 7D(b5)]

Nevertheless, competitors insisted that Frito was able to obtain sole supplier status in certain types of stores, such as convenience stores. As for other larger retail outlets, competitors claimed that Frito was currently dominating the shelf space, and engaging in constant efforts to obtain additional space, invariably at the expense of, and to the detriment of, its rivals. Competitors claimed that Frito's efforts were driving them out of business because reduced space meant reduced sales and increased costs.

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CLOSING AUTHORIZED,BY: CKROBINSON/emg;RPDICK/emg;GRSPRATLING/emg
ON: 6/30/98
CAPTIONED MATTER (S)I CLOSED: 6/30/98

[REDACTED TEXT (b)(5)7(D)] As a result, competitors claimed, Frito would dominate this new product area.

We met with Frito representatives [REDACTED TEXT (b5)] We issued a CID to Frito in late August [REDACTED TEXT (b)(3) 1314(g)]

We recommend closing this investigation [REDACTED TEXT (b)(5)]

¹ Because this issue arose after we had opened our preliminary investigation into shelf space issues, we did not formally seek clearance from the FTC on this topic.

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The most promising of our theories are set forth below. Much credit should be given to Jill Ptacek and Dick Doidge, whose earlier memoranda contain somewhat deeper analysis and cover every possible theory we could come up with, however promising.

II. Theories of Competitive Harm

   A.    Attempt to Monopolize/Monopolization

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