APPENDIX 7 JULY 26, 1973. Mr. CLARENCE ADAMY, President, National Association of Food Chains, Washington, D.C. DEAR MR. ADAMY: I would like to thank you for your willingness to provide the antitrust subcommittee with those items requested during your recent testimony. I thought it would be helpful to recapitulate what those items are. 1. The private newspaper surveys you mentioned-the Metro Market study and the Supermarket News study--that purport to show the share of metropolitan markets by individual supermarket companies. 2. The survey of various supermarket chains showing their pricing policy on specific cuts of beef as a carcass moves from wholesale to retail that you said on April 11, 1972, you would supply to the House of Representatives Subcommittee on Livestock and Grains of the Committee on Agriculture. 3. The average percentage of supermarket chain mark-up from production to wholesale (as appropriate) and from wholesale to retail of certain broad categories of food items. Specifically: Beef, poultry, pork, seafood, processed meats, milk, eggs, cheese. bakery items, sugar, and flour. Frozen vegetables, a. Name brand, b. House brand. Canned vegetables, a. Name brand, b. House brand. Fresh vegetables and canned fruits, a. Name brand, b. House brand. We trust that you can provide us with this promised information before the record closes, so that we can insert that material along with this letter. Best regards, PETER W. RODINO, Jr., Chairman. THE NATIONAL ASSOCIATION OF FOOD CHAINS, Hon. PETER W. RODINO, Jr., DEAR MR. CHAIRMAN: This letter is in the nature of a progress report regarding your July 26, 1973 request for information following my earlier testimony before your subcommittee. 1. Concerning your request for the private newspaper surveys of "share of market" of individual supermarket companies, we do not maintain files of these studies in our office. Accordingly, I would appreciate it if you would request copies directly from the publishers: Supermarket News, 7 East 12th Street. New York, New York 10003, and Metro Market Studies, Inc., Grocery Distribution Guide, 4 Lakewood Circle North, Greenwich, Conn. 06830. You should be advised that these studies are not based on anything resembling a census-type analysis and do not, insofar as I am aware, use actual sales figures. Studies which do rely exclusively on actual sales figures and cover a full universe would, of course, be more reliable. 2. Pricing policies relative to various cuts of meat vary company by company, community by community, and season by season. Further, the distortions caused by the various Phases of the Economic Stabilization Program, and particularly the current beef freeze, make generalizations about past practices inoperative in today's chaotic market. I am enclosing two documents, however, that can be considered illustrative. a. A booklet entitled "The High Cost of Beef-A Fact-Finding Tour" published last year by Super Market Institute. One company's pricing chart during the period the study was made is on the third page from the back. b. A cutting chart on hogs-published by the Kansas Food Dealers Association-showing the percentage of various pork cuts in a typical hog carcass. 3. I am attaching a rundown from the July, 1973, issue of Chain Store Age magazine giving average markups in various product categories. These categories differ somewhat from those you requested, but are the only ones we have in the office. Incidentally, I do not know how these figures were collected or what they are actually averages of, so they should be considered illustrative rather than as reflection of "common" or "standard" practice. I appreciate the invitation to appear before your subcommittee and hope that the views I presented were useful. Sincerely, CLARENCE G. ADAMY, Attachments. President. |