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Frito-Lay Investigations : 06/20/1996a: Memorandum: Follow-up Interview

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Memorandum U.S. Department of Justice Seal

Subject: Follow-up interview with [REDACTED TEXT (b7D)] Date: June 20, 1996

To: Nina Hale (Frito File) From: Neeli Ben-David




Typically, a broker promotes a particular brand when the brand is trying to market itself outside of its core region. In this case, the broker and distributor worked together to acquire shelf space for [REDACTED TEXT (b7D)] The buyer gets a commission for any shelf space it acquires and the distributor gets a portion of the sales. Often, the broker depends on its relationships with buyers to acquire more shelf space for its clients. [REDACTED TEXT (b7D)]

Mr. Olson explained that one of the factors of [REDACTED TEXT (b7D)] Since the smaller stores feel the need to keep up with their larger competitors, they often try to carry the same products.

[REDACTED TEXT (b7D)] When Eagle left the market [REDACTED TEXT (b7D)] assumed it would be acquiring at least some of Eagle's space; however, rather than increasing, [REDACTED TEXT (b7D)] shelf space actually went down. In addition [REDACTED TEXT (b7D)] products are "buried in the middle" of the shelves, out of the customers' line of vision. [REDACTED TEXT (b7D)] speculates that this decrease and rearrangement resulted from a "corporate decision" [REDACTED TEXT (b7D)]


[REDACTED TEXT (b7D)] emphasized that he only wants the amount of shelf space necessary to sell the amount of product [REDACTED TEXT (b7D)] Frito, on the other hand, buys up more shelf space than it needs. In fact, Frito often has expired product on its shelves (that is, products with expired shelf dates) because its product did not turn over quickly enough. While Frito may be losing money as a result of buying extra shelf space, Olson speculates that in the long run, Frito reaps the benefits of pushing competitors out of the market.


So/So #11528 size>

Updated June 25, 2015

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