RESPONDENT: Falstaff Brewing Corporation
LOCATION: University of Washington Law School
DOCKET NO.: 71-873
DECIDED BY: Burger Court (1972-1975)
CITATION: 410 US 526 (1973)
ARGUED: Oct 17, 1972
DECIDED: Feb 28, 1973
Matthew W. Goring - for appellees
Facts of the case
Media for United States v. Falstaff Brewing Corporation
Audio Transcription for Oral Argument - October 17, 1972 in United States v. Falstaff Brewing Corporation
Warren E. Burger:
We'll hear arguments next in No. 71-873, United States against Falstaff Brewing Company.
Mr. Kauper, you may proceed.
Mr. Chief Justice, and may it please the Court.
This is an appeal under the Expediting Act from the order of the United States District Court for the District of Rhode Island dismissing the Government's complaint with the antitrust laws against the Falstaff Brewing Company.
The complaint alleges that the 1965 acquisition by Falstaff Brewing Corporation, the Nation's fourth largest brewer of the assets of the Narragansett Brewing Company, the largest brewer in New England violates Section 7 of the Clayton Act as amended.
Like Greeley, the preceding case on the docket, it is a potential competition case.
Central to the case is the need to halt and if possible to reverse the increasing trend towards concentration in the brewing industry in local markets, a trend which was both noted with concern and was the primary basis for this Court's 1966 holding in United States against Pabst Brewing Company.
The market in this case is not in dispute, it is stipulated, it is the production and sale of beer in the New England area comprised of the six New England States.
There is no allegation in the case at the time of the acquisition.
There was any direct competition between Falstaff and Narragansett.
The Government alleged rather that Falstaff was a significant potential competitor in this market that the market was concentrated and becoming increasingly so and that the net effect of its elimination as a potential competitor therefore substantially lessened competition within the meaning of Section 7.
More particularly, the Government alleged that Falstaff had the incentive to enter -- it had the financial capability to enter.
It had reasonable prospects for a successful de novo or toe-hold entry.
The District Court relying on two findings dismissed the Government's complaint.
More specifically, the Court concluded that Falstaff's management had considered the acquisition by other means, find them unprofitable, and that therefore, the decision was made by Falstaff not to enter this market by any means other than the acquisition of Narragansett.
Do the -- the complaint did not allege, did it that Falstaff was the only brewery with equivalent opportunity and -- and resources to enter this market?
Is it --
Mr. Justice, I think the Government's theory is it was one of the most likely entrants.
If it did --
More specifically, if I'm right, the allegation and the evidence submitted would tend to indicate that it is one of the Nation's 10 largest brewers.
Seven of those brewers are already in the New England market.
And two of them are way out west somewhere (Voice Overlap).
Two of them -- well, I don't know who had said they were way out west but they were significantly further west than Falstaff and they are also significantly smaller than Falstaff.
So, at least in argument you're going to say that Falstaff had superior opportunity and resources to any other brewing not already in the New England market to enter.
I believe that was the case.
I don't think we would have to establish that it was absolutely the only one that could do so.
On the other hand, if the record showed there were 15 or 20 with equal access and resources of the potential competition argument would be much less than Falstaff.
Yes, I think if -- if the evidence were to demonstrate that there were very large number of potential entrants, then clearly one would have to take the position elimination of one had no particular impact.
In other words, part of the potential competition theory I should suppose would be a proof that the potential entrant was -- if not unique at least one of a very small group, would it not be?