Antitrust

Munchies Monopolists

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In theory, antitrust is there to prevent big businesses from grabbing too much market share. In practice, it can squelch the little guy just as easily as it can lift him up. Here's Jay Hancock, no foe of antitrust in general, on one recent action by the Federal Trade Commission:

On the bright side, this means you can marry Natty Boh after all.

This month Snyder's of Hanover and Utz Quality Foods, both in Hanover [Pennsylvania]…halted a planned merger after regulators intervened.

In deciding to extend its review of the deal, the Federal Trade Commission sought documents that would have cost the companies millions of dollars and months of uncertainty.

"They were asking for a lot of data—obviously a very expensive process" says Utz President Tom Dempsey. "We looked at it and said, 'We've got to make a business decision here.' We just decided this isn't something we're prepared to go forward on."

Too bad. The merger, which the companies said would have been layoff-free, could have given them fighting weight to compete against monsters Frito-Lay and Kraft. It would have been good for Hanover, where they employ a couple of thousand people.

Not in anybody's imagination (except maybe an antitrust regulator's) could it have hurt consumers.

Between them Frito-Lay and Kraft control well over half of the U.S. snack market. Frito-Lay makes the eponymous chips and other junk food. Kraft makes Ritz and Triscuit crackers and Mister Salty pretzels.

Snyder's market share, by contrast, is about 2 percent. Utz's is even less. Combined, they would control a smaller portion of the snack business than Microsoft's share of Web-search activity.

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  1. Did I ever tell you how I got my name? Funny story.

    1. I am a magnet for foodstuffs. I will banish dirt to the land of wind and ghosts.

  2. Simply put, Utz potato chips are the best.

    And antitrust is dumb.

    1. Right on both counts. That is all.

    2. The Salt and Pepper Chip is my personal favorite.

    3. As a native Central Pennsyltukian, I grew up on Utz. They are gods to the hertical mortals of Frito-lay, who should be offering Banditos up for sacrifice.

      Their crab chip is ‘da bomb.

      1. Funny thing is, i grew up in southern PA (from eastern to central as time went) and i don’t recall having Utz until i came to Maryland around age 12.

        Could just be a youth-memory-loss thing, or maybe my adults had no taste.

        1. Or maybe i was just more traumatized about the complete lack of decent beef jerky in MD….

          1. Or pickled eggs. Mmmmmm….

  3. Utz potato chips kick ass. If I am not mistaken a good portion of the country is deprived of them. What a shame.

    In every Presidential election the Dems scream about how Republicans are not enforcing the anti-trust laws. Well, the Dems won and they are now enforcing them. The world is now safe from good potato chips and pretzels.

  4. In theory, antitrust is there to prevent big businesses from grabbing too much market share. In practice, the theory is utterly false.

    Fixed.

  5. Utz is the reason God allows Pennsylvania to continue to exist.

    1. Middleswarth and Charles used to be pretty good too but I have not had them in a while. Lays are probably the worst potato chips made.

    2. let us not forget about Pottsville PA’s D.G. Yeungling & Sons which is always represented in my fridge.

      1. hallelujah. the joys of getting those potato chips DELIVERED has only been supplanted by the fact that yuengling is now widely available across the entire eastern seaboard.

        too bad i live in alaska now.

    3. No, the reason I allow Pennsylvania to exist is they stopped making Rolling Rock.

      1. hear hear!

    4. In that case, can we move Utz somewhere else, so God can torch the state?

      KTB

    5. The Amish/PennDutch make some great food too, so we need to relocate them with Utz before the nuking from orbit begins.

  6. Forestalling
    Trade and
    Commerce

    1. Cuz if everyone were free to misrepresent their products, commerce would flow like a mighty river!

      1. Dude, this is about the FTC’s antitrust powers, and if you think the FTC is reliable, consistent, trustworthy, or sticks to the rule of law in its capacity as an advertising regulator, you don’t know much about the FTC.

      2. To dent California’s deficit, bureaucrats will withhold an extra 10 percent from every taxpayer?at least from those who don’t flee the state.

        Yes, it would make consumers smarter, instead of relying on the supposed omniscience of the federal bureaucrats…

      3. Right MNG, because without the FTC, there would be no-one to call out frauds…

        Have you seen how retailers treat manufacturers trying to place goods on their shelves? It’s about as scary as an FDA audit. Despite the fact that Walmart & Target can’t throw you in jail and lacks subpoena power, somehow they get it right 99% of the time, a success rate that a sclerotic state bureaucracy will never match.

        1. The states play a major role in consumer protection, too.

      4. Everyone is free to misrepresent their products right now. They simply have to pay protection money to the party in power in exchange for having the FTC ignore them.

  7. Whatever you say, fish bulb.

  8. Utz Cheesy Poofs CRUSH Cheetos into teeny, tiny little orange bits.

    1. Buuut moooommm… I need more Cheezy Poofs!

  9. Snyders pretels are great, but they will break a tooth or three.

    1. You need to slobber on them just a lil more. Instead of wiping away that slobber that i KNOW happens when you open that bag 😉

      1. (damn, got me droolin just thinkin about them.)

  10. Gibbles chips, man. Back in my pot days…

  11. Snyders big sourdough pretzels are awesome. If you haven’t had them before, do yourself a favor and pick some up.

  12. I have this sudden realization that you’re all fatties, eating all these potato chips.

    1. negative, we’re lousy dopers with teh muncheez

  13. Dudes, can anyone be guillible to think this one-sided account captures everything important in this case? I mean, I don’t have to look it up, just think about how unplausible this is.

    1. In deciding to extend its review of the deal, the Federal Trade Commission sought documents that would have cost the companies millions of dollars and months of uncertainty.

      Can you come up with a plausible reason this merger should not go through? I certainly can’t.

      Seriously, what on earth could the other side of the account bring up that could conceivably make this merger an antitrust issue?

    2. What is so implausable about it. They are two small companies. They are also two small companies that compete against big powerful companies like Kraft. Why is it so hard to think that Kraft didn’t use its poltical influence to get regulators to take a hard look at this. And that when they did, the discovery requirements were too much for the companies to comply with, which was of course exactly what Kraft wanted.

      That sounds a hell of a lot more than plausible to me.

      1. *whish*

        (The sound of Occam’s Razor slicing the air)

    3. Me fail English? That’s unplausible!

    4. It goes without saying that all the nuances of this case are not represented in this article–how could they be?–but what about it seems implausible to you? People foregoing their plans due to the cost of providing libraries of (usually irrelevant) data to government regulators certainly resonates with me. Heck, when I worked for the EPA we demanded nonsensical ‘compliance documentation’ from each other.

    5. Re: MNG,

      Dudes, can anyone be guillible to think this one-sided account captures everything important in this case?

      Can you think of an alternative that makes sense? I would have to assume you have already thought of one, to call the story above “unplausible”. Because if you have not, then I would have to conclude you’re “just sayin’.”

    6. Here’s what I want to know: how is it any of yours or the FTC’s fucking business, MNG, as to whether 2 companies decide to do business with one another, presuming that neither of them owes you money and there is no evidence of any fraud or wrongdoing?

      1. Because monopolies are evil, like that top-hat wearing, monocle sporting bastard on the box.

        Ofcourse, our common understanding of “evil monopolies” (Std Oil, and the other shit they taught in history RE: monopolies and unions) are bullshit.

        Those evil monopolies that spurred anti-trust legislation were gov’t enabled monopolies weren’t they? Without gov’t intervention, they couldn’t have maintained their stranglehold.

        SO…..ummm, yeah, punish those damn monopolies, cause it’s their fault. In the meantime, Comcast gets to monopolize MontCo’s cable with Gov’t Approval.

        Business as Usual.

        1. Yeah, cuz Utz and Snyders combined might, like, take upwards of four or five percent of the snack-food market.

          Obviously, MNG is onto something here.

          [Sarcasm valve now in “OFF” position]

          1. What’s the blocking pressure of your sarcasm valve? Must be a couple thousand atmospheres. Mine just keeps blowing out.

  14. Is she eating potato chips while he’s proposing? (And that rock needs to be bigger if he expects her to say yes to a one-armed, manorexic cyclops in a black unitard.)

  15. This is not about the market share for snack food. This is about the market share for pretzels. Imagine, one giant company, making almost all of the pretzels in the US. Oh, the monopoly rents they could extract. The horror!

    The FTC must stop the horrendous joining. Someone has to speak for the pretzel.

    1. And how long till that Pretzelopoly buys out the guys the make the microwave soft pretzels, HUH?!

      WONT SOMEONE THINK OF THE MICROWAVEABLE PRETZELS!!11oneONE1!

  16. I think we are all in agreement that Utz and Snyder’s make delicious snack products.

    Warning about the Snyder’s garlic pretzels – they will make you stink for hours. They’re nearly as potent as gyros (except you’ll smell like garlic, not gyro, obviously).

    1. Dang. So my search continues for a pretzel that makes me smell like gyro.

      1. Well, they have a pastrami on rye with mustard, the honey and onion, bbq that tastes like pork, atomic buffalo wings, why not gyro? Time to write my local Snyder’s of Hanover representative.

        1. The honey onion and honey dijon bits are addictive. Time to call the DEA…

        2. Oh, but anyone who hasn’t tried em already: DONT TRY the hotwings flavor.

          Only disappointment will you find.

  17. I have this sudden realization that you’re all fatties, eating all these potato chips.

    Not me, man. I like my potatoes in distilled form.

    I will say that MNG is the fattest of all, and he ALWAYS smells like gyros.

    1. Luksusowa ftw!

  18. Those are the onions, I swear!

  19. Ska must be a whale if he’s eating all those gyros. Fatty. And Italians smell like garlic even if they haven’t eaten a gyro.

    1. That still doesn’t change the conclusions we can all jump to with your fixation on rape, SugarFree, Warty, and bracciole.

      NTTAWWT

      1. Ah, but what about my fixation with scungilli?

        1. Um, you enjoy mollusks?

          1. Episiarch’s taste includes both snails and oysters.

            1. But sadly, no clams.

              1. So, no one remembers Spartacus?

  20. If I were paranoid, I wonder if someone at Frito-Lay or Kraft mentioned to someone at the FTC about how terrible it would be if the merger went through.

    Thank God I’m not paranoid. It’s probably just the FTC being asshats on their own.

    1. I would bet a fair amount of money that is exactly what happened.

      1. Man we’d all be so rich if we could actually bet on this stuff. Just need to convince all the nannyist/biggovt/liberal/everythingelseevil people to bet against us.

        Maybe they’d actually learn something after we all became millionaires.

  21. And Italians smell like garlic even if they haven’t eaten a gyro.

    Thus Warty.

    1. I thought he smelled like Steve Smith.

    2. Or are you saying Italians smell like Warty?

    3. I smell like bacon-wrapped sea bass fillets, you goon.

  22. I am soooo relieved The Right People? are now in charge.

  23. Hey, it’s the National Boh guy!

  24. Honestly, I’ve done a lot of business with the FTC, and I think you could easily call the agency the Arbitrary and Capricious Commission with more accuracy.

  25. Would anyone care to do a little research into the political contributions of Frito-Lay (which I think may be a Coke subsidiary) and Kraft?

    1. See my links below.

  26. I agree with others that this story is made much more interesting by the idea that Snyder’s and Utz were KO’d by the combined lobbying power (over $6,000,000 in 2009) of Kraft and Pepsico. This is not to suggest that all that money went to keboshing the merger, but when you’ve got that type of “access,” undemocratic influence and unfree-market wagering were probably involved.

    P.S. — I couldn’t even find any figures related to Utz or Snyder’s lobbying.

    1. They’re too busy making delicious snacks to fuck with lobbying. The Ultimate Chip requires Supreme Dedication.

  27. The one argument that I can think of against the Kraft & Frito-Lay payoff is that Utz is so small, it may be off their radar. Also, Kraft & Frito-Lay have to watch out, because if those smaller competitors disappear, they could come under scrutiny of an activist “trust-buster”.

    Assuming the fix isn’t already in, of course.

  28. You haven’t lived unless you’ve had the Crab-flavored chip from UTZ. Almost makes me want to move back to Baltimore.

    1. Dude–NOTHING should make you want to move back to Balmer, not even the unbelievable outstandingness of Utz.

      1. Until Utz is re-headquartered in bmore (as per our burn down pennsyltucky proposal).

  29. Did Nancy get plastic surgery?

  30. I never heard of Utz until I came to NYC. They don’t have ’em even upstate (Buffalo/Rochester). They are definitely the best of the “non-gourmet” brands. Lays are cardboard in comparison.

  31. This certainly wouldn’t have happened if their congresscritter wasn’t a Republican, Todd Platts, who voted against the Pelosi health deform bill.
    Wanta bet the Dem challenger for 2010 isn’t already marking Utz up to hit for a contribution?

  32. Frito Lay obviously didn’t want the competition.

  33. I don’t think anybody needs to be highly concerned about Snyder’s market share at this point.

    shipping franchise

  34. hi,
    everybody, take your time and a little bit.

  35. This certainly wouldn’t have happened if their congresscritter wasn’t a Republican, Todd Platts, who voted against the Pelosi health deform bill.

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