THE COMPETITION TRIBUNAL
IN THE MATIER OF an application by the Director of Investigation and Research for an interim order pursuant to section 72 (1) of the Competition Act. R.S.c.C-23, as amended; AND IN THE MATIER OF a proposed partnership between Pepsi-Cola Canada Ltd and Hostess Food Products Limited BETWEEN: THE DIRECTOR OF INVESTIGATION AND RESEARCH Ap~p f c a_n_t----------~-------. COMPET!TIOH TR!!U~~Al : TRIBUNAL Di! lA CONCURft!NC! : - and - ~ 0 I 0 L OCT 1 1 1 v E • 7 , . :: . • • I 1,;- I I PEPSI-COIA CANADA LTD. D HOSTESS FOOD PRODUCTS LIMITED. --- ·-··-~ ··.-µ~.:::--OTTAWA, ONT. I .j . Respondents
NOTICE OF APPLICATION 1. TAKE NOTICE that an application will be made for an interim order prohibiting the closing of the proposed partnership transaction between the respondents on Tuesday, October 25th at 10 o'clock in the morning in the Competition Tribunal Hearing Room, 6th Floor, 90 Sparks Street, Ottawa, Ontario, or at such other time and place as the Competition Tribunal may advise.
2. AND TAKE NOTICE that, in support of this application, the applicant will file the affidavit of Robert G. Lancop and such further
and other material as counsel may advise.
3. THE GROUNDS for the application are as follows: A The Director has been advised that. on October 26, 1988, the respondents intend to close a partnership transaction which will merge their salty snack businesses across Canada. Once closing has occurred, the Director submits that the parties will be free to take actions which would have effects on competition which will be difficult to reverse if the partnership is later dissolved. For example, the partnership will be free to terminate
redundant management, close duplicate manufacturing plants and merge their distribution systems.
CTS/88
2 R The affidavit of Robert G. Lancop will demonstrate that the merger of the two principle salted snack producers in Canada is reasonably likely to lessen competition substantially in the market for salted snacks in certain regions of Canada. The affidavit will review the factors set out in section 65 of the Act and will demonstrate that, in the post merger environment, the partnership's market shares will be high and there will be few offsetting market conditions. Barriers to entry are high, foreign competition is not significant, substitutes are not available and there will be little remaining competition to oppose the market power of the combined operations of two very strong and previously vigorous competitors. DATED AT OTTAWA this ) ~o4~'2A' .< . -------17th day of October 1988 ) ______ ,,L:_~~-----------------Calvin S. Goldman, Q.C. Director of Investigation and Research
To: Donald Affleck, Q .C. Messrs. Fasken & Calvin Box30
Toronto-Dominion Bank Tower Toronto, Ontario M5K lCl (416) 366-8381
Solicitors for Pepsi-Cola Canada Ltd. 1255 Bay Street Toronto, Ontario M5R 2A9 And To: Thomas G. Heintzman, Q.C. McCarthy & McCarthy
Toronto Dominion Centre Box48 Toronto, Ontario M5K 1E6 (416) 362-1812 Solicitors for Hostess Food Products Limited Box 3340 Cambridge, Ontario N3H 4T7