UNDER GOVERMENT SCRUTINY

The industry has always been suspicious of government, and the government has always kept a wary eye on the industry.That was certainly true in the early 1960s, when Congress threatened to investigate economic concentration in the food industry. As pressures mounted, Clarence G. Adamy, president of the National Association of Food Chains, said Congress was being "despoiled by unfounded and deceptive

The industry has always been suspicious of government, and the government has always kept a wary eye on the industry.

That was certainly true in the early 1960s, when Congress threatened to investigate economic concentration in the food industry. As pressures mounted, Clarence G. Adamy, president of the National Association of Food Chains, said Congress was being "despoiled by unfounded and deceptive innuendo, allegation and accusation."

The same week, Robert A. Magowan, president, Safeway Stores, Oakland, Calif., said in a letter to shareholders, "We will welcome an objective investigation that is concerned only with determining facts. It will clear up misunderstandings of how low-cost distribution is achieved and how it benefits both producers and consumers."

His remarks were echoed by Paul J. Cupp, president, Acme Markets, Philadelphia, who told SN a federal study "could be a very good thing if handled objectively by the right people -- those who have no axes to grind. It might even be beneficial."

Threats of an investigation lingered until 1964, when the Johnson administration proposed the establishment of a bipartisan National Commission on Food Marketing to study the industry "from the farm to the consumer," an undertaking that George L. Mehren, assistant secretary of agriculture, said was "not an attempt to prejudge [but] an honest and fair search for enlightenment."

According to SN, the commission proposed to study competition and trade practices among food retailers, with special attention to chain stores, plus wholesale processing and procurement of meat and poultry, dairy, milling and baking. The commission set out to determine how the market was structured, how it was changing, how business was conducted and prices were determined, how regulatory activities affect competition and the impact of food imports.

As the NCFM investigation got under way in 1965, Adamy urged industry cooperation, noting that without valid economic measurements, the commission's investigation would be fruitless.

The commission's report in June 1966 recommended that the federal government stop further economic concentration through mergers or acquisitions, noting that concentration of purchasing power by large food retailers was "especially significant."