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insubstantial seller concentration levels. Here again The Griffin Report for June 1974, is helpful in the statistical area. In 1974 the five top retail grocery firms had at least 50 percent of the market share in several of the State's regional markets. One firm, Stop & Shop, had 14.84 percent of the total Massachusetts 1974 market, and where the State figures are further broken down, "we find that Stop & Shop really dominates where the people are. In Massachusetts' biggest county, the company operates 22 stores that bring in $127,920,000 and 18.75 percent share of the markets.The Griffin Report, June 1974 at 97. Stop & Shop holds 17.40 percent of the market in Suffolk County, 18 percent, 12.31 percent and 26.85 percent in Plymouth, Norfolk and Barnstable Counties respectively. In Bristol, Hampden and Worcester Counties, Stop & Shop shares the top five positions with others ranking second in Bristol and Hampden and fifth in Worcester.

The Griffin Report, June 1975 figures are essentially in line with those set out above, however they do show an overall reduction in strength of Stop & Shop. It would appear that while there is dilution of the shares held by the chains (The Griffin Report, June 1975 at 22), there has not yet been time for the market to adjust to the 25 store closings planned by A. & P. These shifts in control of market shares are precisely the kind of events which the Consumers' Council should monitor in order to determine what if any impact they have on price competition in a given area.

Prices seem to be the same in any given area in the Commonwealth. This is the conclusion of a study prepared by a group at Suffolk University and alluded to in The Griffin Report, June 1974 at 43. In a recently published paper entitled A Study of Retail Food Pricing Practices prepared by Professor J. L. T. Hasingaegen, School of Management, Boston College, a 40-item standardized market basket for a family of four was utilized in an attempt to ascertain the price variability of food products across the State. The following conclusions

were made:


The market basket price averages across the various retail chain stores represented in any one local market area are very

small (average difference less than 7 percent). The Hasingaegen study also confirmed the link between the absence of competition and retail prices. "Each chain appeared to charge its highest prices in the market area where it holds a relative position of strength (when considering the number of retail units of the chain's share of markets)."

Nothing has been found to support a conclusion that food retailers or wholesalers have violated any of the traditional rules governing the distribution of their products. Again, that is not the end of the analysis, but in the nature of the pro-competitive bias with which it is essential to approach the subject of food distribution in Massachusetts, it is the beginning point. It is the markets which must be studied to determine if it is acting within levels which the public can accept as providing to it the benefits of full and vigorous competition. It is not Stop & Shop, Big Y, Adams, or Iandolis (leaders in different counties) which would be the focus of a Council inquiry. It is conceivable that a particular area provides all of the benefits of competition while being served by only two or three supermarkets, while an adjacent area may have seven or eight supermarkets and be too heavily

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concentrated and have prices too high to warrant the continuation of the competitive status quo.




It is our belief that the function of looking at competitive conditions in a particular area of effective competition is essentially legislative in character. By that it is meant that any relief suggested should follow a full investigative process and consider the social and economic impact of changes to be wrought within such a market. The Federal Government has long maintained a dichotomy between the administrative and prosecutorial roles of the Federal Trade Commission and the Antitrust Division of the Justice Department. Generally, the latter, with the notable exception of merger cases, has devoted its resources to conduct offenses, such as price fixing, boycotts, and illegal tie-in arrangements. The FTC has, on occasion, moved against firms for conduct offenses, but even these have usually involved industrywide practices. The scope of the FTC statute, which is now our Chapter 93A, permitted this broader role and it was precisely this process of defining “unfair methods of competition and unfair or deceptive acts or practices” which the legislature left to the expertise of the Commission. See F.T.C. v. R. F. Keppel & Brother, Inc., 291 U.S. 304 (1934); cf. Commonwealth v. DeCotis, Mass. Adv. Sh. (1974) 1425, 1434, f.n. 8; Slaney v. Westwood Auto, Inc., Mass., 322 N.E. 2d 768 (1975). Delegating the function of determining whether competition exists in the food distribution process to the Consumers' Council would allow for the kind of overview that is necessary, while permitting the Attorney General to seek to punish others for offenses traditionally the responsibility of a prosecutor.

This is not to say that the Attorney General's present authority would be pre-empted. Rather in one area, the food distribution in dustry, the Consumers' Council would be given concurrent authority with the Attorney General to perform what is essentially an administrative function. It is expected that the Council will review the competitive conditions in certain segments of the food industry at the retail and wholesale level and after making findings concerning the structure, conduct and performance of those sub-markets, enter specific remedial orders. Of course a full structure-conduct-performance review may not be necessary in each instance. Thus, competitive abuses of a behavioral nature can be uncovered and either dealt with directly or turned over to the Attorney General for appropriate action by his office.

It is our intention to provide the Council with broad ranging powers to remedy anticompetitive market problems which it uncovers. Divesture of particular stores or customers (wholesale) may be ordered; prohibition of multiple labeling (repricing merchandise after it is placed on the shelf), restrictions on advertising generally or of a certain kind may be required and prohibitions from acquiring or merging with other persons in or out of the food industry are some of the remedies which might appear in the circumstances necessary to meet the particular problems encountered. It is, and always has been an administrative function to form remedies to meet differing situations. We believe that after hearing all of the evidence, reviewing all of the elements of the market, including a host of matters beyond the contro]

of the firms doing business here, appropriate relief in the public interest will be forthcoming.


The heart of the new statute lies within new subsection (d). It expands the definition of Chapter 93A, Section 2, by requiring an assessment of the existing market structure without limiting the Council to the all or nothing approach traditionally required in monopoly cases. Thus it will not be necessary for the Council to be satisfied that one firm is monopolizing a market or several firms have conspired to do so. Rather the Council will be permitted, after they have ascertained the product and geographical boundaries of a market to apply economic criteria in order to determine if “free, open, and unrestrained competition is operating to the fullest possible degree. It will be up to the Council to determine whether the nature and extent of competitive forces encountered are sufficiently allocating the available resources. If the Council is satisfied that upon all of the evidence before them the market needs to be freed of certain structural or other restraints, they should order such changes as they in their discretion determine are reasonably necessary.

We do not see this process as an unreasonable invasion of government into the private sector. Government's role is to protect and foster the rights of both industry and the public to engage in and secure the benefits of competition. To do nothing while local markets are brought under the control of two or three firms would be a betrayal of the ideal of opportunity which is the hallmark of the American promise. More, not less people should share in the marketplace.

Here again it may be that two or three firms are providing all that the public interest requires of the competitive process. If prices are too high then the market should entice other firms in and if they are not going in then the Council should find out why they are not doing so. Perhaps there are too many significant barriers to entry. It is in this area that the Council can and should act with considerable vigor, Firms must be permitted access to the market, for it is that access or the threat of entry which works to keep prices down and existing competitors efficient and active. Whenever the market analysis indicates artificial barriers, they should be removed and steps taken to insure that they are not rebuilt. The F.T.C. Report at 14 Commenting on earlier studies regarding the barriers to entry caused by the exista ence of supermarket chains, states: “The reports concluded that entry barriers into metropolitan area markets are moderately significant because of advantages enjoyed by large, established chains in the areas of financing, shopping center locations

Concern has been expressed that in this day of budget cutting this new statute will cost too much money. It is difficult to determine the cost involved, but a liberal estimate is approximately $250,000 per year. This would include the hiring of three attorneys, two economists and three field investigators and supportive secretarial and supply costs. It also assumes that volunteers would be available from local colleges and universities to assist in the gathering and compiling of information. These costs would be offset by the broader opportunities entrepreneurs would have to expand their operations into hitherto "closed" segments of the marketplace. The public would be benefited. if the restoration of the competition worked to lower prices at either the wholesale or retail levels.

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E. AMENDMENT TO GENERAL LAWS, CHAPTER 93A Section 1 of Chapter 93A is amended by adding subsection (e) as follows: "Persons engaged in the distribution of food products means all persons at least ten percent of whose gross revenue is received from the production, transportation, distribution or sale of products consumed for food or drink by man or animal.”

Section 2 of Chapter 93A is amended by adding subsection (d) as follows: (d) “Violations of Section 2 may be determined to exist with regard to persons engaged in the distribution of food products within the Commonwealth of Massachusetts where it is found that based upon the structure, conduct or performance of a particular area of effective competition or the firms operating within said area fee, open and unrestrained competition is not operating to the fullest extent possible.”

The following Sections should be added to Chapter 93A:

SECTION 12. The Massachusetts Consumers' Council, hereafter referred to as the Council, shall have concurrent jurisdiction with the Attorney General to enforce the provisions of this Chapter as to all persons engaged in the distribution of food products within the Commonwealth of Massachusetts.

SECTION 13. If the Council, acting through its executive director has reason to believe that any person has been or is violating the provisions of Section 2 hereof; and if it shall appear to the Council that a proceeding by it in respect thereof would be to the interest of the public issue and serve upon this person a complaint stating its charges in that respect and contain a notice of hearing upon a day and a place therein fixed at least thirty (30) days after the service of said complaint. The person so complained of shall have the right to appear at the place and time so fixed to show cause why an order should not be entered by the Council requiring such person to cease and desist from the violation of the law so charged in said complaint. Any person may make application, and with good cause shown, may be allowed by the Council to intervene and appear in person. The testimony in such proceedings shall be reduced to writing and filed in the office of the Council. If upon such hearings the Council shall be of the opinion that Section 2 of this Chapter has been violated, it shall make a report in writing and it shall state its findings as to the facts and shall issue and cause to be served upon such person an order requiring such person to 'cease and desist from said violation. The order may include within its terms affirmative forms of relief to be instituted both by the respondents and such other persons as the Council deems necessary to effectuate the elimination of the violation or its effects. Until the expiration of the time allowed for filing a complaint seeking review, if no such complaint has been duly filed within such time, or, if a complaint seeking review has been filed within such time then until the records in the proceedings has been filed in the Appeals Court of Massachusetts, as hereinafter provided, the Council may at any time, upon such a notice and in such manner as it shall deem proper, modify or set aside, in whole or in part, any report or any order made or issued by it under this section. After the expiration of the time allowed for filing of a complaint seeking review, if no such complaint has been duly filed within such time, the Council may at anytime, after notice and opportunity for hearing, reopen and alter, modify, or set aside, in whole or in part, any report or order made or issued by it under this section, whenever in the opinion of the Council conditions of fact or of law have so changed as to require such action or if the public interest shall so require: Provided, however, That the said person, may, within sixty (60) days after service upon him or it of said report or order entered after such a reopening, obtain a review thereof in the approporiate Appeals Court of Massachusetts, in the manner provided in section 14 hereof.

SECTION 14. Any person required by an order of the Council to cease and desist or requiring any affirmative relief in connection with uny violation of this Chapter may obtain a review of such order in the Appeals Court of Massachusetts within any county where the violation occurred or where such person resides or carries on business, by filing in the Court, within sixty (60) days from the date of the service of such order, a written complaint praying that the order of the Council be set aside. A copy of such complaint shall be forthwith transmitted by the Clerk of the Court to the Council, and there upon the Council shall file in the Court the record in the proceedings. Upon such filing of the complaint the Court shall have jurisdiction of the proceeding of the question determined therein concurrently with the Council until the filing of the record and shall have power to make and enter a decree affirming, modifying, or setting aside the order of the Council, and enforcing the same to the entent of such order is affirmed and to issue such order as are ancillary to its jurisdiction or are necessary in its judgment to prevent injury to the public or to competitors pendente lete. The findings of the Council as to the facts, if supported by evidence, shall be conclusive. To the extent that the order of the Council is affirmed, the Court shall thereupon issue its own order commanding obedience to the terms of such order of the Council. If either party shall apply to the Court for leave to adduce additional evidence, and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceedings before the Council, the Court may order such additional evidence to be taken before the Council and to be adduced upon the hearing in such manner and upon such terms and conditions as the Court may seem proper. The Council may modify its findings as to the facts, or make new findings, by the reason of the additional evidence so taken, and it shall file such modified and new findings, which, if supported by evidence, shall be conclusive, and its recomendation, if any, for the modification or setting aside of its original order, with the return of such additional evidence. The judgment of the Court shall be final except that the same shall be subject to further review by the Supreme Judicial Court upon the conditions providing for such further review as said Court shall from time to time establish. .

SECTION 15. Upon the filing of the record with it the jurisdiction of the Appeals Court of Massachusetts to affirm, enforce, modify, or set aside orders of the Council shall be exclusive.

SECTION 16. Such proceedings in the Appeals Court of Massachusetts shall be given precedent over other cases pending therein and shall be in every way expedited. No order of the Council nor judgment of the Court to enforce the same shall anywise relieve or absolve any person from any liability under the anti-trust laws of the Commonwealth of Massachusetts. Mass. G.L. c.93)

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