Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Notices 66867

Board of Governors of the Federal Reserve

System, December 17, 1997.

Jennifer J. Johnson,

Deputy Secretary of the Board.

[FR Doc. 97–33333 Filed 12–19–97; 8:45 am]

BILLING CODE 6210–01–F

FEDERAL TRADE COMMISSION

[File No. 971–0081]

Guinness Plc; Grand Metropolitan Plc;

Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: The consent agreement in this

matter settles alleged violations of

federal law prohibiting unfair or

deceptive acts or practices or unfair

methods of competition. The attached

Analysis to Aid Public Comment

describes both the allegations in the

draft complaint that accompanies the

consent agreement and the terms of the

consent order—embodied in the consent

agreement—that would settle these

allegations.

DATES: Comments must be received on

or before February 20, 1998.

ADDRESSES: Comments should be

directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W.,

Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT:

William Baer, Federal Trade

Commission, 6th & Pennsylvania Ave.,

NW, H–374, Washington, DC 20580.

(202) 326–2932. George S. Cary, Federal

Trade Commission, 6th & Pennsylvania

Ave., NW, H–374, Washington, DC

20580. (202) 326–3741.

SUPPLEMENTARY INFORMATION: Pursuant

to Section 6(f) of the Federal Trade

Commission Act, 38 Stat. 721, 15 U.S.C.

46, and Section 2.34 of the

Commission’s Rules of Practice (16 CFR

2.34), notice is hereby given that the

above-captioned consent agreement

containing a consent order to cease and

desist, having been filed with and

accepted, subject to final approval, by

the Commission, has been placed on the

public record for a period of sixty (60)

days. The following Analysis to Aid

Public Comment describes the terms of

the consent agreement, and the

allegations in the accompanying

complaint. An electronic copy of the

full text of the consent agreement

package can be obtained from the

Commission Actions section of the FTC

Home Page (for December 15, 1997), on

the World Wide Web, at ‘‘http://

www.ftc.gov/os/actions97.htm.’’ A

paper copy can be obtained from the

FTC Public Reference Room, Room H–

130, Sixth Street and Pennsylvania

Avenue, N.W., Washington, D.C. 20580,

either in person or by calling (202) 326–

3627. Public comment is invited. Such

comments or views will be considered

by the Commission and will be available

for inspection and copying at its

principal office in accordance with

Section 4.9(b)(6)(ii) of the Commission’s

Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis To Aid Public Comment on the

Provisionally Accepted Consent Order

The Federal Trade Commission has

accepted for public comment from

Guinness plc (‘‘Guinness’’) and Grand

Metropolitan plc (‘‘Grand Met’’) an

Agreement Containing Consent Order

(‘‘Proposed Consent Order’’). The

Proposed Consent Order remedies the

likely anticompetitive effects arising

from the proposed merger of Guinness

and Grand Met in two relevant product

markets. This agreement has been

placed on the public record for sixty

(60) days for receipt of comments from

interested persons.

Comments received during this period

will become part of the public record.

After sixty (60) days, the Commission

will again review the agreement and the

comments received, and will decide

whether it should withdraw from the

agreement or make final the consent

order in the agreement.

According to the draft of complaint

that the Commission intends to issue,

Guinness and Grand Met are

competitors in the sale and distribution

in the United States of premium Scotch

and premium gin. The premium Scotch

products of Guinness include Johnnie

Walker Red and Dewar’s White Label

and the premium Scotch brands of

Grand Met include J&B Rare, J&B Select,

and The Famous Grouse. The premium

gin brands of Guinness include

Tanqueray gin and the premium gin

brands of Grand Met are Bombay

Original and Bombay Sapphire.

The Commission’s draft of complaint

states that Guinness and Grand Met

entered into an agreement to merge their

companies on May 11, 1997. The size of

the transaction, measured in terms of

the market capitalization of both parties,

is about $36 billion.

The Commission is concerned that the

proposed merger would eliminate

substantial competition between

Guinness and Grand Met, and increase

concentration substantially, in the very

highly concentrated premium Scotch

and premium gin markets, resulting in

higher prices. The Commission stated it

has reason to believe that the proposed

merger would have anticompetitive

effects and violate Section 7 of the

Clayton Act and Section 5 of the Federal

Trade Commission Act.

In the United States premium Scotch

market, Guinness is the largest

competitor with about 68% of all sales

and Grand Met is the second largest

competitor, with about 24% of sales.

Together, the merged firm will control

approximately 92% of all United States

premium Scotch sales. The proposed

merger would increase the HerfindahlHirschman Index (‘‘HHI’’), the

customary measure of industry

concentration, by over 3000 points and

produce a market concentration of over

8000 points. In the United States

premium gin market, Guinness is the

largest competitor with about 58% of all

sales and Grand Met is the third largest,

and about 15% of sales. Together, the

merged firm will control approximately

73% of all United States premium gin

sales. The proposed merger would

increase the HHI by over 1700 points

and produce a market concentration of

over 6000 points.

The Proposed Consent Order, if

finally issued by the Commission,

would settle all of the charges alleged in

the Commission’s complaint. Under the

terms of the Proposed Consent Order,

Guinness and Grand Met will be

required to divest their Dewar’s Scotch,

Bombay Original gin, and Bombay

Sapphire gin brands, worldwide, to one

or two acquirers acceptable to the

Commission. To insure an

uninterrupted supply of Dewar’s Scotch

after the brand divestiture, Guinness

will be required to divest additional

assets, including Scotch distilling

capacity, if the Commission should

determine that these additional assets

are necessary for the acquirer effectively

to compete. Also, to insure an

uninterrupted supply of Bombay

Original and Bombay Sapphire gins,

Guinness and Grand Met may be

required to produce these gins for the

acquirer, in England, should the

independent third party that has been

producing Bombay Original and

Bombay Sapphire for Grand Met not

wish to continue to do so for the

acquirer.

Guinness and Grand Met will be

required to complete the required

divestitures within six (6) months from

the date of the Commission’s acceptance

of the consent order for public

comment. In the event Guinness and

Grand Met do not divest Dewar’s,

Bombay Original, and Bombay Sapphire

to an acquirer or acquirers acceptable to

the Commission in the requisite time,

procedures for the appointment of a

trustee to sell the assets have been

agreed to and will be triggered.
66868 Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Notices

Accompanying the Proposed Consent

Order is an Asset Maintenance

Agreement. Under its terms, Guinness

and Grand Met are required to preserve

and maintain the competitive viability

of all of the assets to be divested in

order to insure that the competitive

value of these assets will be maintained

after the merger but before the assets are

actually divested.

By accepting the Proposed Consent

Order subject to final approval, the

Commission anticipates that the

competitive problems alleged in the

compliant will be resolved. The purpose

of this analysis is to invite and facilitate

public comment concerning the

Proposed Consent Order. It is not

intended to constitute an official

interpretation of the Proposed Consent

Order, nor is it intended to modify the

terms in any way.

Donald S. Clark,

Secretary.

Separate Statement of Commissioner

Mary L. Azcuenaga Concurring in Part

and Dissenting in Part in Guinness PLC,

File No. 971–0081

Today, the Commission accepts for

public comment a consent order settling

allegations that the merger of Guinness

PLC and Grand Metropolitan PLC would

violate Section 7 of the Clayton Act and

Section 5 of the Federal Trade

Commission Act. The complaint alleges

as antitrust product markets: (1)

‘‘premium Scotch,’’ which is defined as

‘‘blended Scotch whisky that is made

and bottled in Scotland, generally

advertised, promoted, and available

throughout the United States, and sold

at retail at prices comparable to the

prices of the Johnnie Walker Red,

Dewar’s White Label, and J&B Rare

brands,’’ and (2) ‘‘premium gin,’’ which

is defined as ‘‘gin that is made and

bottled in England, generally advertised,

promoted, and available throughout the

United States, and sold at retail at prices

comparable to the prices of Tanqueray,

Bombay Original, and Bombay Sapphire

brands.’’ I cannot support the complaint

as written.

Although at first glance the markets

may sound wacky (to use the

vernacular), the complaint merits our

careful attention. For reasons that are

not apparent, the proposed product

markets exclude brands not marketed

throughout the United States, if there

are any, that compete head to head with

the national brands. By definition, the

‘‘premium gin’’ product market also

excludes domestically bottled gin

brands, if any, that are sold at prices

comparable to Tanqueray and Bombay.

I see no reason for these seemingly

arbitrary exclusions.

More importantly, the price

limitations in the product markets do

not seem justifiable. As recognized in

Commission precedent, competition

occurs along a continuum of prices as

brands compete with products above

and below their prices. In Heublein,

Inc., 96 F.T.C. 385 (1980), for example,

the Commission dismissed the

complaint based on findings in an ‘‘all

wine’’ market and the table, dessert and

sparkling wine submarkets. As then

Commissioner Pitofsky stated in the

Heublein opinion, although the

competitive offerings of the wine

industry were not altogether

homogeneous, ‘‘those diverse products

nevertheless may ‘appropriately be

designated as a market’ for antitrust

analysis,’’ 96 F.T.C. at 576 quoting Coca

Cola Bottling Co. of New York, Inc., 93

F.T.C. 110 (1979).

Despite my disagreement with the

allegations in the complaint, I find

reason to believe that the merger of

Guinness PLC and Grand Metropolitan

PLC would violate the law on the basis

of a broader market and that an order to

remedy the lessening of competition in

the broader market would be

appropriate. The divestiture of the

Dewar’s Scotch and Bombay gin brands

will have some remedial effect in the

broader market, and for that reason, I

have voted to accept the order for public

comment. After the public comment

period, I will revisit the question

whether the order is sufficient or

whether the Commission should reject

the order and seek additional

divestitures in an administrative

proceeding.

[FR Doc. 97–33306 Filed 12–19–97; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Office of the Secretary

Agency Information Collection

Activities: Proposed Collections;

Comment Request

The Department of Health and Human

Services, Office of the Secretary will

periodically publish summaries of

proposed information collections

projects and solicit public comments in

compliance with the requirements of

Section 3506(c)(2)(A) of the Paperwork

Reduction Act of 1995. To request more

information on the project or to obtain

a copy of the information collection

plans and instruments, call the OS

Reports Clearance Officer on (202) 690–

6207.

Comments are invited on: (a) Whether

the proposed collection of information

is necessary for the proper performance

of the functions of the agency, including

whether the information shall have

practical utility; (b) the accuracy of the

agency’s estimate of the burden of the

proposed collection of information; (c)

ways to enhance the quality, utility and

clarity of the information to be

collected; and (d) ways to minimize the

burden of the collection of information

on respondents, including through the

use of automated collection techniques

or other forms of information

technology.

Proposed Projects 1

Evaluation of the Proposed Cash and

Counseling Demonstration—New—Cash

and Counseling is a consumer directed

care model for individuals with

physical or developmental disabilities.

A demonstration project utilizing this

model has been proposed. The Office of

the Assistant Secretary for Planning and

Evaluation is planning to engage in an

information collection for the purpose

of evaluating this demonstration.

Respondents: Individuals or

Households; Burden Information for

Baseline Interview—Number of

Respondents: 15,250; Burden per

Response: .62 hours; Total Burden for

Baseline: 9,455 hours—Burden

Information for Four-Month Treatment

Group Interview— Number of

Respondents: 7,245; Burden per

Response: .5 hours; Total Burden for

Four-Month Treatment Group Interview:

3,622 hours—Burden Information for

Eight-Month Treatment Group

Interview—Number of Respondents:

6,900; Burden per Response: .58 hours;

Total Burden for Eight-Month Treatment

Group Interview: 4,002 hours—Burden

Information for Nine-Month Followup

Interview—Number of Respondents:

13,800; Burden per Response: .75 hours;

Total Burden for Nine-Month Followup:

10,350 hours—Total Burden for Project:

27,429 hours.

Send comments to Cynthia Agens

Bauer, OS Reports Clearance Officer,

Room 503H, Humphrey Building, 200

Independence Avenue S.W.,

Washington DC, 20201. Written

comments should be received within 60

days of this notice.

Dated: December 4, 1997.

Dennis P. Williams,

Deputy Assistant Secretary, Budget.

[FR Doc. 97–33355 Filed 12–19–97; 8:45 am]

BILLING CODE 4150–04–M