|
Dear PEI Member:
The U.S. Supreme Court has overturned a 96-year-old
decision and held that a manufacturer does not necessarily violate the
antitrust laws by establishing a minimum resale price for its products and
enforcing the policy by terminating its relationship with a distributor or
other reseller who sells below the minimum price.
The case (Leegin Creative Leather Products v. PSKS,
Inc.) involved Leegin, a manufacturer of women’s fashion accessories, and
PSKS, one of its retailers. In 1997, Leegin instituted a policy announcing
that it would only do business with retailers that followed its suggested
resale prices. Thereafter, Leegin introduced its “Heart Store Program,”
which provides incentives to retailers to promote Leegin’s products in a
separate section of their stores. Retailers had to promise to follow
Leegin’s suggested resale prices at all times to participate in this
program.
PSKS, Inc. operated a retail outlet known as Kay’s
Kloset in Lewisville, Texas, in which it offered several clothing lines,
including Leegin’s Brighton brand leather goods and accessories. PSKS
“invested heavily in advertising and promoting the Brighton brand,” and “by
1999, Brighton was PSKS’ best selling and most profitable line.” In 2002,
upon learning that PSKS had placed Leegin’s products on sale (at up to 20
percent below the minimum price established by Leegin), Leegin stopped all
shipments of Brighton products to them. PSKS sued, claiming that Leegin had
engaged in unlawful resale price maintenance. PSKS relied on the Supreme
Court’s 1911 decision that said manufacturers may not set the prices charged
by retailers, nor may they establish a minimum resale price under which
retailers may not sell.
The Supreme Court in the Leegin case reversed its 1911
decision, ruling that “vertical agreements establishing minimum resale
prices can have either procompetitive or anticompetitive effects, depending
upon the circumstances in which they are formed” and should not be held per
se (or automatically) unlawful. Instead, the Supreme Court ruled that courts
should apply the “rule of reason” standard to decide, on a case-by-case
basis, whether a particular vertical price restraint violates antitrust
laws. The Court noted in its decision that vertical price restraints help
prevent discounting resellers from taking a free ride on full service
resellers who invest in pre- and post-sale services to promote a
manufacturer’s product line.
The Leegin decision lifts the threat of an automatic
antitrust suit where price agreements between manufacturers and distributors
are found. It is important to note that the decision doesn’t require such
agreements nor does it permit anticompetitive behaviors. Legal experts say
the Justice Department could still bring cases where agreements are shown to
reduce competition.
The
Court’s decision can be viewed here.
CALIFORNIA RELEASES
FIELD EVALUATION STUDY OF ATGS and LLDS
Field Evaluation Study of Automatic Tank
Gauging Systems, Electronic Line Leak Detection Systems, and Mechanical Line
Leak Detectors is the name of a
report prepared by Ken Wilcox Associates for the California State Water
Resources Control Board Underground Storage Tank Program. The study was
conducted to:
-
Determine the
effectiveness of ATGs, ELLDs, and MLLDs in detecting leaks;
-
Compare field
performance of ATGs and LLDs with the results of third-party evaluations
conducted in a controlled setting;
-
Observe and
assess field testing procedures used by service technicians during the
annual monitoring equipment certification that is required by California
law; and
-
Recommend ways
of improving the operational effectiveness of ATGs and LLDs.
The 92-page
report is available by clicking here.
|
Minimum
Resale Pricing Case
CA Field Evaluation of ATGs
and LLDs
PEI
Distributor Changes
PEI Convention
It's All About the Equipment in Atlanta this November.
Register before August 31 for Early Bird discount.
» Register Now
Respond to this Newsletter
by
e-mail to the editor, Robert Renkes at
rrenkes@pei.org
or join
the discussion in the Petroleum
Equipment Forum
to
unsubscribe or change preferences see below. |
|
PEI DISTRIBUTORS IN THE NEWS
P.E.S., Inc.,
Marion, Iowa, together with affiliated companies B&H Tank Corporation,
Advanced Service Corporation, Associated Electric, Inc., Affiliated Leasing
Corporation, and Design Builders Construction, LLC, have merged under the
corporate name of Acterra Group. The contact information and office
locations will remain the same. The web address and email domain have
changed to
www.acterragroup.com. Terry D. Cooper, currently serving a second term
on the PEI Board of Directors, is president and CEO of Acterra Group.
Oil Equipment Co., Inc., Madison, Wisconsin, has purchased the
customer list and assets of Jepa, Inc., also of Madison. Jepa’s primary
focus was hoist and lube industry sales, service and installation. Oil
Equipment Co. has retained the product lines and service offerings as they
expand into this industry.
BRIEFLY NOTED
The Steel Tank Institute,
which recently announced a change to the limited warranty requirements of
all STI-labeled underground storage tanks, has moved the effective date of
the new warranty back six months to January 1, 2008. Tanks shipped on or
after that date will carry a 10-year warranty.
7-Eleven,
Inc. plans
to devote more than $2.4 billion to open 1,000 new stores and refurbish its
entire U.S. network of 6,100 stores over the next four years, according to
CSP Daily News.
BP FORMS TWO
BIOFUEL VENTURES
BP,
Associated British Foods, and DuPont will invest $400 million to build a new
plant in Hull, United Kingdom, which will produce around 420 million liters
of ethanol annually beginning in late 2009. The plant will use wheat as a
feedstock. BP and DuPont will build an adjacent facility to produce and
research biobutanol, an enhanced but currently highly
expensive-to-manufacture biofuel. UK demand for biofuels will rise in the
coming years, driven by governmental rules that 5 percent of motor fuels
must come from renewable sources by 2010.
BP and United Kingdom-based D1 Oils have set up a joint venture to invest
around $160 million over the next five years in planting and growing
jatropha trees in Southeast Asia, southern Africa, Central and South
America, and India. Jatropha trees bear nonedible oilseeds. The joint
venture is expected to produce up to 2 million metric tons of jatropha oil
per year once all the plantations are established. BP expects
regulatory-lead biodiesel demand in Europe will reach 11 million metric tons
per year beginning in 2010. D1 Oils owns a biodiesel refinery in Teesside,
UK.
CHEVRON SELLS
URUGUAY RETAIL NETWORK
Chevron
Latin America Marketing LLC and Chevron Amazonas LLC, both indirect,
wholly-owned subsidiaries of Chevron Corp., have signed an agreement with
D.U.C.S.A.—the state-owned petroleum marketing and distribution company
operating under the ANCAP brand—for D.U.C.S.A. to purchase the Chevron fuels
marketing business in Uruguay. The agreement will add 90 of Chevron’s
Texaco-branded stations to D.U.C.S.A.’s existing retail network in Uruguay.
The agreement reflects Chevron’s downstream strategy to improve returns by
focusing on areas where it has a competitive supply position and strong
brand recognition.
INTERNATIONAL BIOFUEL NOTES
The first
petrol station in
Hungary
to offer E85 opened today in northwest Hungary, according to business daily
Világgazdaság. At least three more stations operated by a German oil
company are expected to offer E85 in Hungary.
China’s
state-owned grain group COFCO said that the Chinese government has stopped
approving new ethanol projects regardless of the raw materials, according to
The Standard.
McDonald’s will convert its delivery fleet in
Britain
to run on biodiesel made from its own recycled cooking oil, according to
Reuters. The fast food chain aims to switch all its 155 vehicles to run
on biodiesel in the next 12 months.
MEMBERSHIP APPLICATIONS
Electronic board rebuilder.
Global Petroleum Electronic Rebuilders, 4880 Robb Street, Unit 5, Wheatridge,
Colorado, has applied for manufacturer division membership. Cliff Corkill is
the primary contact for the firm, which was established in 2006. The firm
provides POS systems, intercoms, cash drawers, printers and electronic tank
gauging systems which are sold through PEI distributors. Sponsored for PEI
membership by Bob Kempf, APSIntl, La Porte, CO.
Florida
safety and environmental engineering manager.
Platinum Engineering & Safety, Inc., 614 East Highway 50, Suite 153,
Clermont, Florida 34711, has applied for affiliate division membership. Art
Sodermark is president of the firm, which was established in 2001. The firm
provides consultation, training and job oversight services to the petroleum
and construction industry. Sponsored for PEI membership by Mike Zarrella,
WilsonsEqp, Fort Pierce, FL.
Iowa
blending systems designer.
Junge Control, Inc., P. O. Box 8391, Cedar Rapids, Iowa 52408, has applied
for affiliate division membership. Jeff Gore is sales manager for the firm,
which was established in 1984. The company designs fuel blending systems and
provides consultation for blending equipment. Sponsored for PEI membership
by Joyce Hale, IlliniOMEq, Pekin, IL.
Nigeria
service company.
Petroleum Solutions Ltd., 4/6 Oil Mill Street, 2nd and 3rd
Floors, Lagos Island, Nigeria 2AT 4TT, has applied for affiliate division
membership. Tayo Kuforiji is the CEO for the firm, which was established in
1999. Petroleum Solutions provides product specification, project
management, installation and maintenance. Sponsored for PEI membership by
Blanca Hernandez, NUPI, Imola, Italy.
Pennsylvania
technology firm.
DirAction, LLC, 111 Bertolet School Road, Spring City, Pennsylvania 19475,
has applied for affiliate division membership. Earle Drack is the president
of the firm, which was established in 2005. The company offers technology
for phase separation and water content measurement in ethanol blended fuel
applications. Sponsored for PEI membership by J. Stephen Hieber, PWIinc, New
Oxford, PA.
Software designer. Officetrax.com, 1623 Military Road 475, Niagara
Falls, New York 14304, has applied for affiliate division membership. Mark
Coughlan is the sales manager for the firm, which was established in 1998.
Officetrax.com provides internet-based operational software services
designed specifically for companies involved with the performance and
management of facility and equipment maintenance. Sponsored for PEI
membership by Edward S. Kubinsky, Crompco, Plymouth Meeting, PA. The
Ambassador is Jim Howard, Hess, Woodbridge, NJ.
ADMITTED TO PEI
-
Mohammed Saad Aldrees
& Sons Co. Ltd., Riyadh, Saudi Arabia (dis)
-
Millennium Systems
International, LLC, Westminster, MD (aff)
-
Willo
Smith, 7-Eleven, Inc., Dallas, TX (O&E)
|
