Grocery "slotting fees": FTC continues McCormick investigation, Manufacturers petition for guidelines.(McCormick and Co.)

The Independent Bakers Association, the Tortilla Industry Association and the National Association of Chewing Gum Manufacturers want the FTC to "clarify the legality of slotting fees arrangements in clear but flexible 'slotting allowance' guidelines."

The associations' April 14 petition, with suggested guidelines, comes as the FTC prepares for a public workshop to discuss slotting allowances on May 31 and June 1.

It also comes as the FTC continues its investigation of McCormick & Company, Inc. in connection with the "slotting fees" issue and other shelf space practices.

In October, FTC Competition Bureau Deputy Director Willard K. Tom (since returned to the private sector) told Congress that some small manufacturers have complained that "strong buyers, such as supermarket chains, are demanding large up-front payments not tied to volume. In some cases, we have been told, these allowances are so large that some small manufacturers cannot afford them and are dropped from the store."

To distinguish between possibly procompetitive payments and anticompetitive payments, the FTC asks these questions, Tom said:

* Is it a payment simply to be carried somewhere in the store?

* Is it for a fixed amount of shelf space?

* Is it for preferential display --the end-caps or eye-level shelves?

* Is it for the right to be the exclusive, or nearly exclusive, supplier in that product category?

* Is it for the right to control what other products in that category will be allowed on the shelves?

* And is it for a long or a short time?

"[I]f a dominant manufacturer, …