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OCM Files Amicus Brief in Support of State’s Right to Stop Wal-Mart Merger

(Monday, March 3, 2003 -- CropChoice news) -- The following is a news release.

Contact: Steve Cady, 402.792.0041

Lincoln, NE— The Organization for Competitive Markets filed an amicus brief last week in support of the rights of individual states to enforce their antitrust laws against companies that would reduce competition in food and agriculture.

OCM seeks reversal of a decision by the federal district court in Puerto Rico which prevented the Puerto Rico attorney general from enforcing its antitrust laws against Wal-Mart.

Wal-Mart seeks to merge with a major retail supermarket chain on the island.

“The judge in Puerto Rico issued a ruling that threatens the ability of individual states to enforce their antitrust laws when the federal government decides not to prevent a merger,” said Michael Stumo, OCM general counsel. “There is a longstanding line of federal cases that clearly allow states to be more aggressive in protecting competition than the federal authorities. If the Puerto Rico ruling stands, there is a significant risk that antitrust policy enforcement will lie only in Washington. Such a scenario is not an optimistic one for competition.”

Last year, both the U.S. Federal Trade Commission (FTC) and the Puerto Rico attorney general reviewed the proposed acquisition of a major Puerto Rican retail food chain, Supermercados Amigo, Inc., by Wal-Mart, the largest food retailer in the U.S. While FTC declined to stop the merger, the attorney general of Puerto Rico continued negotiating for concessions. Wal-Mart sued in federal court to block the attorney general’s actions.

The federal district court agreed with Wal-Mart saying that the attorney general could not block the merger where FTC refused to do so.

In a bizarre opinion, the court said that such state efforts were protectionist and discriminated against Wal-Mart. Puerto Rico appealed to the First Circuit in Boston where OCM filed its amicus brief urging reversal of the lower court decision.

“If Wal-Mart acquires Supermercados, farmers in Puerto Rico will have far less competition for their products. The lower court mistakenly concluded that this was a protectionist concern,” continued Stumo. “However, our brief makes clear that lack of buyer competition, or monopsony power, is a core antitrust concern, not protectionism. We have outlined the analysis and caselaw support on the monopsony issue very comprehensively.”

The Organization for Competitive Markets is a multidisciplinary, nonprofit group of farmers, ranchers, academics, attorneys, and policy makers dedicated to reclaiming the agricultural marketplace for independent farmers, ranchers and rural communities.