[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Notices]
[Pages 61300-61302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27924]


=======================================================================
-----------------------------------------------------------------------

FEDERAL TRADE COMMISSION

[File No. 171 0184]


Alimentation Couche-Tard Inc. and CrossAmerica Partners LP; 
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 methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the complaint and the terms of the consent orders--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before January 15, 2018.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``Alimentation Couche-
Tard, Inc. (ACT) et al.; FTC File No. 1710184'' on your comment, and 
file your comment online at https://ftcpublic.commentworks.com/ftc/actholidaydivest by following the instructions on the web-based form. 
If you prefer to file your comment on paper, write ``Alimentation 
Couche-Tard, Inc. (ACT) et al.; FTC File No. 1710184'' on your comment 
and on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580, or deliver 
your comment to the following address: Federal Trade Commission, Office 
of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor, 
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Nicholas Bush, (202-326-2848), Bureau 
of Competition, 600 Pennsylvania Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 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 thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for December 15, 2017), on the World Wide Web, 
at https://www.ftc.gov/news-events/commission-actions.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before January 15, 
2018. Write ``Alimentation Couche-Tard, Inc. (ACT) et al.; FTC File No. 
1710184'' on your comment. Your comment--including your name and your 
state--will be placed on the public record of this proceeding, 
including, to the extent practicable, on the public Commission website, 
at https://www.ftc.gov/policy/public-comments.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/actholidaydivest by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that website.
    If you prefer to file your comment on paper, write ``Alimentation 
Couche-Tard, Inc. (ACT) et al.; FTC File No. 1710184'' on your comment 
and on the envelope, and mail your comment to the following address: 
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania 
Avenue NW, Suite CC-5610 (Annex D), Washington, DC

[[Page 61301]]

20580, or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If 
possible, submit your paper comment to the Commission by courier or 
overnight service.
    Because your comment will be placed on the publicly accessible FTC 
website at https://www.ftc.gov, you are solely responsible for making 
sure that your comment does not include any sensitive or confidential 
information. In particular, your comment should not include any 
sensitive personal information, such as your or anyone else's Social 
Security number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, such as medical records or other 
individually identifiable health information. In addition, your comment 
should not include any ``trade secret or any commercial or financial 
information which . . . is privileged or confidential''--as provided by 
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 
16 CFR 4.10(a)(2)--including in particular competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    Comments containing material for which confidential treatment is 
requested must be filed in paper form, must be clearly labeled 
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular, 
the written request for confidential treatment that accompanies the 
comment must include the factual and legal basis for the request, and 
must identify the specific portions of the comment to be withheld from 
the public record. See FTC Rule 4.9(c). Your comment will be kept 
confidential only if the General Counsel grants your request in 
accordance with the law and the public interest. Once your comment has 
been posted on the public FTC website--as legally required by FTC Rule 
4.9(b)--we cannot redact or remove your comment from the FTC website, 
unless you submit a confidentiality request that meets the requirements 
for such treatment under FTC Rule 4.9(c), and the General Counsel 
grants that request.
    Visit the FTC website at http://www.ftc.gov to read this Notice and 
the news release describing it. The FTC Act and other laws that the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding, as appropriate. The Commission 
will consider all timely and responsive public comments that it 
receives on or before January 15, 2018. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

Introduction

    The Federal Trade Commission (``Commission'') has accepted for 
public comment, subject to final approval, an Agreement Containing 
Consent Orders (``Consent Agreement'') from Alimentation Couche-Tard 
Inc. (``ACT'') and CrossAmerica Partners LP (``CAPL'') (collectively, 
the ``Respondents''). The Consent Agreement is designed to remedy the 
anticompetitive effects that likely would result from ACT's proposed 
acquisition of Holiday Companies (``Holiday'').
    Under the terms of the proposed Consent Agreement, ACT and CAPL 
must divest to a Commission-approved buyer (or buyers) certain CAPL and 
Holiday retail fuel outlets and related assets in ten local markets in 
Minnesota and Wisconsin. ACT and CAPL must complete the divestiture no 
later than 120 days after the closing of ACT's acquisition of Holiday. 
The Commission and Respondents have agreed to an Order to Maintain 
Assets that requires Respondents to operate and maintain each 
divestiture outlet in the normal course of business through the date 
the Commission-approved buyer acquires the outlet.
    The Commission has placed the proposed Consent Agreement on the 
public record for 30 days to solicit comments from interested persons. 
Comments received during this period will become part of the public 
record. After 30 days, the Commission will again review the proposed 
Consent Agreement and the comments received, and will decide whether it 
should withdraw from the Consent Agreement, modify it, or make it 
final.

II. The Respondents

    Respondent ACT, a publicly traded company headquartered in Laval, 
Quebec, Canada, operates convenience stores and retail fuel outlets 
throughout the United States and the world. ACT is the parent of wholly 
owned subsidiary Circle K Stores Inc. (``Circle K''). ACT's current 
U.S. network consists of approximately 7,200 stores located in 42 
states. Over 5,000 locations are company-operated, making ACT the 
largest convenience store operator in terms of company-owned stores and 
the second-largest chain overall in the country. ACT convenience store 
locations operate primarily under the Circle K, Kangaroo Express, and 
Corner Store banners, while its retail fuel outlets operate under a 
variety of company and third-party brands.
    Respondent CAPL, a publicly traded master limited partnership 
headquartered in Allentown, Pennsylvania, markets fuel at wholesale, 
and owns and operates convenience stores and retail fuel outlets. ACT, 
via Circle K, acquired CST Brands, Inc. in June 2017, which gave Circle 
K operational control and management of CAPL. CAPL supplies fuel to 
nearly 1,200 sites across 29 states.

III. The Proposed Acquisition

    On July 10, 2017, ACT, through its wholly owned subsidiary Oliver 
Acquisition Corp., entered into an agreement to acquire certain Holiday 
equity interests, including Holiday's retail fuel outlets (the 
``Transaction''). The Transaction would cement ACT's position as one of 
the largest operators of retail fuel outlets in the United States.
    The Commission's Complaint alleges that the Transaction, if 
consummated, would violate Section 7 of the Clayton Act, as amended, 15 
U.S.C. 18, and that the Transaction agreement constitutes a violation 
of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 
45, by substantially lessening competition for the retail sale of 
gasoline and the retail sale of diesel in ten local markets in 
Minnesota and Wisconsin.

IV. The Retail Sales of Gasoline and Diesel

    The Commission's Complaint alleges that relevant product markets in 
which to analyze the Transaction are the retail sale of gasoline and 
the retail sale of diesel. Consumers require gasoline for their 
gasoline-powered vehicles and can purchase gasoline only at retail fuel 
outlets. Likewise, consumers require diesel for their diesel-powered 
vehicles and can purchase diesel only at retail fuel outlets. The 
retail sale of gasoline and the retail sale of diesel constitute 
separate relevant markets because the two are not interchangeable--
vehicles that run on gasoline cannot run on diesel and vehicles that 
run on diesel cannot run on gasoline.
    The Commission's Complaint alleges the relevant geographic markets 
in which to assess the competitive effects

[[Page 61302]]

of the Transaction include ten local markets within the following 
cities: Aitkin, Hibbing, Minnetonka, Mora, Saint Paul, and Saint Peter 
in Minnesota, and Hayward, Siren, and Spooner in Wisconsin.
    The geographic markets for retail gasoline and retail diesel are 
highly localized, ranging up to a few miles, depending on local 
circumstances. Each relevant market is distinct and fact-dependent, 
reflecting the commuting patterns, traffic flows, and outlet 
characteristics unique to each market. Consumers typically choose 
between nearby retail fuel outlets with similar characteristics along 
their planned routes. The geographic markets for the retail sale of 
diesel may be similar to the corresponding geographic markets for 
retail gasoline as many diesel consumers exhibit the same preferences 
and behaviors as gasoline consumers.
    The Transaction would substantially increase the market 
concentration in each of the ten local markets, resulting in highly 
concentrated markets. In five local markets, the Transaction would 
reduce the number of competitively constraining independent market 
participants from three to two. In the remaining five local markets, 
the Transaction would reduce the number of competitively constraining 
independent market participants from four to three.
    The Transaction would substantially lessen competition for the 
retail sale of gasoline and the retail sale of diesel in these local 
markets. Retail fuel outlets compete on price, store format, product 
offerings, and location, and pay close attention to competitors in 
close proximity, on similar traffic flows, and with similar store 
characteristics. The combined entity would be able to raise prices 
unilaterally in markets where ACT and Holiday are close competitors. 
Absent the Transaction, ACT and Holiday would continue to compete head 
to head in these local markets.
    Moreover, the Transaction would increase the likelihood of 
coordination in local markets where only two or three competitively 
constraining independent market participants would remain. Two aspects 
of the retail fuel industry make it vulnerable to coordination. First, 
retail fuel outlets post their fuel prices on price signs that are 
visible from the street, allowing competitors to observe each other's 
fuel prices without difficulty. Second, retail fuel outlets regularly 
track their competitors' fuel prices and change their own prices in 
response. These repeated interactions give retail fuel outlets 
familiarity with how their competitors price and how their competitors 
respond to their own prices.
    Entry into each relevant market would not be timely, likely, or 
sufficient to deter or counteract the anticompetitive effects arising 
from the Acquisition. Significant entry barriers include the 
availability of attractive real estate, the time and cost associated 
with constructing a new retail fuel outlet, and the time associated 
with obtaining necessary permits and approvals.

V. The Proposed Consent Agreement

    The proposed Consent Agreement would remedy the Acquisition's 
likely anticompetitive effects by requiring ACT and CAPL to divest 
certain CAPL and Holiday retail fuel outlets and related assets in ten 
local markets.
    The proposed Consent Agreement requires that the divestiture occur 
no later than 120 days after ACT consummates the Acquisition. This 
Agreement protects the Commission's ability to obtain complete and 
effective relief given the small number of outlets to be divested. 
Further, based on Commission staff's investigation, the Commission 
believes that ACT can identify an acceptable buyer (or buyers) within 
120 days.
    The proposed Consent Agreement further requires ACT and CAPL to 
maintain the economic viability, marketability, and competitiveness of 
each divestiture asset until the Commission approves a buyer (or 
buyers) and the divestiture is complete. For up to twelve months 
following the divestiture, ACT and CAPL must make available 
transitional services, as needed, to assist the buyer of each 
divestiture asset.
    In addition to requiring outlet divestitures, the proposed Consent 
Agreement also requires ACT and CAPL to provide the Commission notice 
before acquiring designated outlets in the ten local areas for ten 
years. The prior notice provision is necessary because acquisitions of 
the designated outlets likely raise competitive concerns and may fall 
below the HSR Act premerger notification thresholds.
    The proposed Consent Agreement contains additional provisions 
designed to ensure the effectiveness of the proposed relief. For 
example, Respondents have agreed to an Order to Maintain Assets that 
will issue at the time the proposed Consent Agreement is accepted for 
public comment. The Order to Maintain Assets requires Respondents to 
operate and maintain each divestiture outlet in the normal course of 
business, through the date the Respondents' complete divestiture of the 
outlet. During this period, and until such time as the buyer (or 
buyers) no longer requires transitional assistance, the Order to 
Maintain Assets authorizes the Commission to appoint an independent 
third party as a Monitor to oversee the Respondents' compliance with 
the requirements of the proposed Consent Agreement.
    The purpose of this analysis is to facilitate public comment on the 
proposed Consent agreement, and the Commission does not intend this 
analysis to constitute an official interpretation of the proposed 
Consent Agreement or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-27924 Filed 12-26-17; 8:45 am]
 BILLING CODE 6750-01-P