Evening star., 1949-10-04
Governments Version
OF Antitrust Suit
Against the APP Co.
Attorney Generals Aide
Replies to Claims
Made in Advertising
By David Laurence


to wonder what there is to say
on the other side of the contro-
versy.
Since the Government does not
have a fund set aside to advertise
its views but has the beneflt OF
Nationwide attention in the news
columns for whatever news it may
give out, it was thought only fail
by this correspondent to invite
Assistant Attorney General Her
bert A. Bergson. who is in charge
of the Governments antitrust di'
vision, to give his comments or
the announcements recently pub
lished by the Great Atlantic q
Pacific Tea Co. Mr.. Bergson,
prepared statement issued to this
correspondent follows:
Contrary to A. & P.'s false
and misleading advertising, sue
cessful prosecution Of the civil
proceedings against it will not In
crease but should decrease grocery
prices. It will not result IN the
closing of g. single store much
less destroy the A. e. P. d.
Based on Earlier Case.
"The present civil suit is based
upon the same conduct involved
in an earlier criminal case in
which A. g. P. was found guilty
and this year paid maximum fines
totaling $175,0oo. A. & P. con-
tended in that case, as it now does
in it's advertisements, that 1t Is
big because the American people
have made it big. On the con-
trary, the court found that A. q
P.'s bigness was not due to effl-
cheney and enterprise but to the
predatory application OF Its mass
purchasing power and the abuse
of that power through boycotts,
blacklisting. preferential rebates,
price wars. and below-cost retail
ing In selected areas.
"The court also found that A.
g. P. prices were reduced In as
many as 80 per cent OF its 5000
stores only long enough to drive
out local competition. BY de-
liberately selling at higher prices
in the remaining 10 per cent OF
their stores which were located in
non-competitive areas. A. 81 P. was
able to accomplish this at the
expense of its customers and at
no cost to itself. A. g. P.'s Gus
toners in 10 per cent of its stores
were compelled to subsidize price
wars in those A. & P. stores being
run at a deliberate loss. .
"A. & P. stores are today oper-
ated in seven separate divisions
each with its own president and
operating staff. These divisions,
each consisting Of about $50 stores,
are subject only to policy control
by the top holding company in
New York. Ninety-nine and 81
hundreds per cent of the stock OF
this holding company is owned by
the Hartford family whose main
policy, according to the Court Of
Appeals In the criminal case. is
to earn 81 on each share Of stock.
The relief sought by the Govern
ment, the complete independence
Of each of these seven divisions
should, through competition, re-
suit in lower grocery prices by
freeing these divisions from the
shackles of the top holding COM
pany's pricing policy of earning
81 a share.
Coercive Practices Charged. :
"The present civil suit seeks
once and for all to put an end
to A. d P.'s long continuing coer-
Give and destructive practices
which have destroyed competition
without benefit to the consumer.
It's successful completion should.
as Attorney General McGrath
said, reduce prices In those A. & p.
stores which must now return a
sufficient profit to pay for the
losses sustained in planned price
wars by other A. g. P. stores
"As a further consequence Of
, this case, A. & P. will be unable
to procure preferential rebates
from suppliers and as a result
the price of merchandise sold to
competitors of A. g. P. should be
reduced. This in tlrn, should en-
able A. & P.'s competitors to re-
duce their prices to the consumer
and compete with A. g. P. on fair
basis. Since over 80 per cent of
the American public buy their
groceries from retailers other than
A. & p, the general public benefit
should be substantial.
1.-THE apparent intent Of A. & P. S
recent national advertising Is to
misinform the American public
concerning this case. Typical Of
APPS distortions is the assertion
In recent advertisements that the
formal complaint in this case
states that A. & P. have regularly
undersold competing retailers.
These five words were lifted from
the following paragraph Of the
Governments complaint:
Defendants, by coercing and
receiving unlawful buying prefer
ences, have become enabled to and
have regularly undersold, regularly
taken patronage away from, and
sometimes eliminated competing
retailers who have bought in SUBJ
stantial compliance with applic-
able Federal laws prohibiting the
sale Of merchandise on discrimin-
atory terms
"The aim Of the Sherman Anti
trust Act is to guarantee the Amer
ican public the benefits resulting
from free, competitive economy
This case Is within-that tradition. -
Reproduction Rights Reserved.)
ElMlRNR@EiEMMIlRIE9lN
B TROUSERS E
70 Msssh A.Ak In