[Federal Register Volume 82, Number 231 (Monday, December 4, 2017)]
[Notices]
[Pages 57265-57267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26012]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[File No. 171 0207]
Alimentation Couche-Tard Inc. and CrossAmerica Partners LP;
Analysis To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
-----------------------------------------------------------------------
SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis to Aid Public Comment describes both the
allegations in the complaint and the terms of the consent orders--
embodied in the consent agreement--that would settle these allegations.
DATES: Comments must be received on or before December 22, 2017.
ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write: ``In the Matter of ACT/
Jet Pep, Inc., File No. 171 0207'' on your comment, and file your
comment online at https://ftcpublic.commentworks.com/ftc/actconsent by
following the instructions on the web-based form. If you prefer to file
your comment on paper, write ``In the Matter of ACT/Jet Pep, Inc., File
No. 171 0207'' on your comment and on the envelope, and mail your
comment to the following address: Federal Trade Commission, Office of
the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D),
Washington, DC 20580, or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC
20024.
FOR FURTHER INFORMATION CONTACT: Kara Todd, (202-326-2015), Bureau of
Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned
[[Page 57266]]
consent agreement containing a consent order to cease and desist,
having been filed with and accepted, subject to final approval, by the
Commission, has been placed on the public record for a period of thirty
(30) days. The following Analysis to Aid Public Comment describes the
terms of the consent agreement, and the allegations in the complaint.
An electronic copy of the full text of the consent agreement package
can be obtained from the FTC Home Page (for November 22, 2017), on the
World Wide Web, at https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before December 22,
2017. Write ``In the Matter of ACT/Jet Pep, Inc., File No. 171 0207''
on your comment. Your comment--including your name and your state--will
be placed on the public record of this proceeding, including, to the
extent practicable, on the public Commission Web site, at https://www.ftc.gov/policy/public-comments.
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/actconsent by following the instructions on the web-based form. If
this Notice appears at http://www.regulations.gov/#!home, you also may
file a comment through that Web site.
If you prefer to file your comment on paper, write ``In the Matter
of ACT/Jet Pep, Inc., File No. 171 0207'' on your comment and on the
envelope, and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024. If possible, submit your paper comment to the
Commission by courier or overnight service.
Because your comment will be placed on the publicly accessible FTC
Web site at https://www.ftc.gov, you are solely responsible for making
sure that your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on the public FTC Web site--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from the FTC Web site,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC Web site at http://www.ftc.gov to read this Notice
and the news release describing it. The FTC Act and other laws that the
Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments that it
receives on or before December 22, 2017. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Analysis of Agreement Containing Consent Orders To Aid Public Comment
I. Introduction
The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, an Agreement Containing
Consent Orders (``Consent Agreement'') from Alimentation Couche-Tard
Inc. (``ACT'') and CrossAmerica Partners LP (``CAPL'') (collectively,
the ``Respondents''). The Consent Agreement is designed to remedy the
anticompetitive effects that likely would result from the proposed
acquisition of Jet-Pep, Inc. (``Jet-Pep'') assets.
Under the terms of the proposed Consent Agreement, ACT and CAPL
must divest to a Commission-approved buyer (or buyers) certain Jet-Pep
retail fuel outlets and related assets in three local markets in
Alabama. ACT must complete the divestiture no later than 120 days after
the closing of ACT's acquisition of Jet-Pep. The Commission and
Respondents have agreed to an Order to Maintain Assets that requires
Respondents to operate and maintain each divestiture outlet in the
normal course of business until a Commission-approved buyer acquires
the outlet.
The Commission has placed the proposed Consent Agreement on the
public record for 30 days to solicit comments from interested persons.
Comments received during this period will become part of the public
record. After 30 days, the Commission will again review the proposed
Consent Agreement and the comments received, and will decide whether it
should withdraw from the Consent Agreement, modify it, or make it
final.
II. The Respondents
Respondent ACT, a publicly traded company headquartered in Laval,
Quebec, Canada, operates convenience stores and retail fuel outlets
throughout the United States and the world. ACT is the parent of wholly
owned subsidiary, Circle K Stores Inc. (``Circle K''). ACT's current
U.S. network consists of approximately 7,200 stores located in 42
states, making ACT the second-largest retail fuel chain in the country.
ACT convenience store locations operate primarily under the Circle K
and Kangaroo Express banners, while its retail fuel outlets provide a
variety of company unbranded and third-party branded fuels. ACT owns
158 retail fuel outlets in Alabama.
Respondent CAPL, a publicly traded master limited partnership
headquartered in Allentown, Pennsylvania, markets fuel at wholesale,
and owns and operates convenience stores and retail fuel outlets. ACT,
via Circle K, acquired CST Brands, Inc. (``CST'') in June 2017, which
gave Circle K operational control and management of CAPL. CAPL supplies
fuel to nearly 1,200 sites across 29 states, but it does not operate in
Alabama.
[[Page 57267]]
III. The Proposed Acquisition
Through three separate agreements (collectively ``the
Acquisition''), ACT will acquire ownership or operation of 120 Jet-Pep
retail fuel outlets with attached convenience stores. Circle K intends
to acquire 18 retail fuel outlets and Jet-Pep's terminal and related
assets. CAPL will acquire the remaining 102 Jet-Pep retail fuel
outlets. The Acquisition is not reportable under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, 15 U.S.C. 18a (``HSR Act''). The
Acquisition would extend ACT's position as one of the largest operators
of retail fuel outlets in the United States.
The proposed Complaint alleges that the Acquisition, if
consummated, would violate Section 7 of the Clayton Act, as amended, 15
U.S.C. 18, and Section 5 of the Federal Trade Commission Act, as
amended, 15 U.S.C. 45, by substantially lessening competition for the
retail sale of gasoline and diesel in three local markets in Alabama.
The proposed Complaint further alleges that Acquisition agreements
constitute a violation of Section 5 of the FTC Act, as amended, 15
U.S.C. 45.
IV. The Complaint
As alleged in the proposed Complaint, the relevant product markets
in which to analyze the Acquisition are the retail sale of gasoline and
the retail sale of diesel. The retail sale of gasoline and the retail
sale of diesel constitute separate relevant markets because the two are
not interchangeable. Consumers require gasoline for their gasoline-
powered vehicles and can purchase gasoline only at retail fuel outlets.
Likewise, consumers require diesel for their diesel-powered vehicles
and can purchase diesel only at retail fuel outlets.
The proposed Complaint alleges the relevant geographic markets in
which to assess the competitive effects of the Acquisition are three
local areas in Brewton, Monroeville, and Valley, Alabama. Each
particular geographic market is unique, with factors such as commuting
patterns, traffic flows, and outlet characteristics playing important
roles in determining the scope of the geographic market. Retail fuel
markets are highly localized and can range in size up to a few miles.
According to the proposed Complaint, the Acquisition would reduce
the number of independent market participants in each market to three
or fewer. The Acquisition would thereby substantially lessen
competition in these local markets by increasing the likelihood that
ACT will unilaterally exercise market power and by increasing the
likelihood of successful coordination among the remaining firms. Absent
relief, the Acquisition would likely result in higher prices in each of
the three local markets.
The proposed Complaint alleges that entry into each relevant market
would not be timely, likely, or sufficient to deter or counteract the
anticompetitive effects arising from the Acquisition. Barriers to entry
include the availability of attractive real estate, the time and cost
associated with constructing a new retail fuel outlet, and the time
associated with obtaining necessary permits and approvals.
V. The Consent Agreement
The proposed Consent Agreement would remedy the Acquisition's
likely anticompetitive effects by requiring ACT to divest certain Jet-
Pep retail fuel outlets and related assets in three local markets.
The proposed Consent Agreement requires that the divestiture occur
no later than 120 days after ACT consummates the Acquisition. This
Agreement protects the Commission's ability to obtain complete and
effective relief in light of the non-reportable nature of the
Acquisition and the small number of outlets to be divested. Further,
based on Commission staff's investigation, the Commission believes that
ACT can identify an acceptable buyer (or buyers) within 120 days.
The proposed Consent Agreement further requires ACT to maintain the
economic viability, marketability, and competitiveness of each
divestiture asset until the Commission approves a buyer (or buyers) and
the divestiture is complete. For up to twelve months following the
divestiture, ACT must make available transitional services, as needed,
to assist the buyer of each divestiture asset.
In addition to requiring outlet divestitures, the proposed Consent
Agreement also requires ACT to provide the Commission notice before
acquiring designated outlets in the three local areas for ten years.
The prior notice provision is necessary because acquisitions of the
designated outlets likely raise competitive concerns and may fall below
the HSR Act premerger notification thresholds.
The proposed Consent Agreement contains additional provisions
designed to ensure the effectiveness of the proposed relief. For
example, Respondents have agreed to an Order to Maintain Assets that
will issue at the time the proposed Consent Agreement is accepted for
public comment. The Order to Maintain Assets requires Respondents to
operate and maintain each divestiture outlet in the normal course of
business, through the date the Respondents' complete divestiture of the
outlet. During this period, and until such time as the buyer (or
buyers) no longer requires transitional assistance, the Order to
Maintain Assets authorizes the Commission to appoint an independent
third party as a Monitor to oversee the Respondents' compliance with
the requirements of the proposed Consent Agreement.
The purpose of this analysis is to facilitate public comment on the
proposed Consent agreement, and the Commission does not intend this
analysis to constitute an official interpretation of the proposed
Consent Agreement or to modify its terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-26012 Filed 12-1-17; 8:45 am]
BILLING CODE 6750-01-P