WILLIAMSVILLE, N.Y. — The Federal Trade Commission last week ordered Tops Friendly Markets here to seek buyers for seven of the stores it had acquired from Penn Traffic earlier this year.
The FTC had allowed Tops to buy 79 stores from Penn Traffic, which was in bankruptcy, before its antitrust review of purchase was completed, on the condition that Tops agree to divest certain locations as the FTC deemed necessary to preserve competition.
Last week the FTC said it had identified five local areas where “competition was an issue”: Bath, Cortland, Ithaca (two stores) and Lockport, all in New York, and Sayre, Pa. (also two stores).
“In each market there are no more than three supermarkets within a 10- to 15-mile area,” the FTC said, citing the likelihood that Tops' purchase of the stores would lead to higher prices.
Tops had already divested 24 of the 79 stores it originally acquired. It is in the process of converting the retained stores to Tops. The acquired locations, in New York, Pennsylvania and Ohio, operated under the P&C, Quality Market and BiLo banners.
The FTC's order, which was approved by 5-0 vote, is open to public comment for 30 days before it becomes final. Tops would then have three months to find buyers, whom the FTC would then need to approve.
United Food and Commercial Workers Local One, which represents Tops workers — including 450 employees at the seven disputed locations — described the FTC order as a “bad decision.”
“We proved to the FTC and the commissioners that Tops is not a threat to the consumer,” said Frank DeRiso, president of UFCW Local One, in a prepared statement. “In fact, Tops falls into the guidelines of protecting the consumer, and the fact is that prices have gone down as a result of Tops purchasing Penn Traffic stores. The FTC is supposed to protect the consumer, but they have failed miserably here.”
The union had supported Tops' original acquisition offer during Penn Traffic's bankruptcy proceedings.
Katie McKenna, a Tops spokeswoman, told SN the company had hoped to retain all seven of the locations it has been ordered to sell.
“The initial reaction of Tops Friendly Markets is one of disappointment because of the company's desire to run a majority of the stores that were cited in the order,” she said.
It was unclear what potential buyers might emerge for the stores, although Schenectady, N.Y.-based Price Chopper had previously acquired several Penn Traffic locations and had expressed interest in many more during the bankruptcy proceedings. Tops is required to continue operating the stores and supporting their viability as it seeks a buyer.