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Coupon clippers don’t only hold up checkout lines but also major acquisitions, as evidenced by the Federal Trade Commission’s recent block of Kroger Co.’s purchase of 74 stores in the Dallas-Fort Worth area from Jacksonville, Fla.-based Winn-Dixie Stores Inc.. In a memo supporting its demand for an injunction to stop the $350 million deal, the FTC cited the expected loss of double- and triple-coupon redemption policies, in a filing at the U.S. District Court in Dallas. Kroger has until June 26 to respond. “Kroger will be able to reduce its use of double and triple coupons after the acquisition without worry of losing customers to its primary coupon competitor — Winn-Dixie,” the FTC said about the Cincinnati-based acquirer. “Fewer coupons obviously mean less discounting and higher effective prices for consumers.” Under a double- or triple-coupon policy, a supermarket either matches or doubles the value of a manufacturer’s coupon. For example, a coupon for 25� off a cake mix results in either a 50� or 75� discout for consumers. While upholding the sanctity of coupons for consumers, the FTC also writes in the court filing that it would be inappropriate to count warehouse clubs, convenience stores and discount stores when defining the market because such outlets are not a substitute for supermarkets. The agency also defends its decision to consider Fort Worth separately from Dallas. It noted that the cities are 30 miles apart and are separated by lakes and an airport. The agency questions why Kroger even thought the deal would be permitted. For example, the Herfindahl-Hirschman Index, which measures market concentration, would rise to 2,249 in Fort Worth alone. Any score above 1,800 sets off antitrust alarms. Copyright �2000 TDD, LLC. All rights reserved.

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