82 FR 61300 - Alimentation Couche-Tard Inc. and CrossAmerica Partners LP; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 82, Issue 247 (December 27, 2017)

Page Range		61300-61302
FR Document		2017-27924

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders-- embodied in the consent agreement--that would settle these allegations.

Federal Register, Volume 82 Issue 247 (Wednesday, December 27, 2017)

[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Notices]
[Pages 61300-61302]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-27924]

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FEDERAL TRADE COMMISSION

[File No. 171 0184]

Alimentation Couche-Tard Inc. and CrossAmerica Partners LP;
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis to Aid Public Comment describes both the
allegations in the complaint and the terms of the consent orders--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before January 15, 2018.

ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write: ``Alimentation Couche-
Tard, Inc. (ACT) et al.; FTC File No. 1710184'' on your comment, and
file your comment online at https://ftcpublic.commentworks.com/ftc/actholidaydivest by following the instructions on the web-based form.
If you prefer to file your comment on paper, write ``Alimentation
Couche-Tard, Inc. (ACT) et al.; FTC File No. 1710184'' on your comment
and on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW, Suite CC-5610 (Annex D), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW, 5th Floor,
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Nicholas Bush, (202-326-2848), Bureau
of Competition, 600 Pennsylvania Avenue NW, Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for December 15, 2017), on the World Wide Web,
at https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before January 15,
2018. Write ``Alimentation Couche-Tard, Inc. (ACT) et al.; FTC File No.
1710184'' on your comment. Your comment--including your name and your
state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the public Commission website,
at https://www.ftc.gov/policy/public-comments.
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/actholidaydivest by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that website.
If you prefer to file your comment on paper, write ``Alimentation
Couche-Tard, Inc. (ACT) et al.; FTC File No. 1710184'' on your comment
and on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW, Suite CC-5610 (Annex D), Washington, DC

[[Page 61301]]

20580, or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW, 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If
possible, submit your paper comment to the Commission by courier or
overnight service.
Because your comment will be placed on the publicly accessible FTC
website at https://www.ftc.gov, you are solely responsible for making
sure that your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on the public FTC website--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from the FTC website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at http://www.ftc.gov to read this Notice and
the news release describing it. The FTC Act and other laws that the
Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments that it
receives on or before January 15, 2018. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

Introduction

The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, an Agreement Containing
Consent Orders (``Consent Agreement'') from Alimentation Couche-Tard
Inc. (``ACT'') and CrossAmerica Partners LP (``CAPL'') (collectively,
the ``Respondents''). The Consent Agreement is designed to remedy the
anticompetitive effects that likely would result from ACT's proposed
acquisition of Holiday Companies (``Holiday'').
Under the terms of the proposed Consent Agreement, ACT and CAPL
must divest to a Commission-approved buyer (or buyers) certain CAPL and
Holiday retail fuel outlets and related assets in ten local markets in
Minnesota and Wisconsin. ACT and CAPL must complete the divestiture no
later than 120 days after the closing of ACT's acquisition of Holiday.
The Commission and Respondents have agreed to an Order to Maintain
Assets that requires Respondents to operate and maintain each
divestiture outlet in the normal course of business through the date
the Commission-approved buyer acquires the outlet.
The Commission has placed the proposed Consent Agreement on the
public record for 30 days to solicit comments from interested persons.
Comments received during this period will become part of the public
record. After 30 days, the Commission will again review the proposed
Consent Agreement and the comments received, and will decide whether it
should withdraw from the Consent Agreement, modify it, or make it
final.

II. The Respondents

Respondent ACT, a publicly traded company headquartered in Laval,
Quebec, Canada, operates convenience stores and retail fuel outlets
throughout the United States and the world. ACT is the parent of wholly
owned subsidiary Circle K Stores Inc. (``Circle K''). ACT's current
U.S. network consists of approximately 7,200 stores located in 42
states. Over 5,000 locations are company-operated, making ACT the
largest convenience store operator in terms of company-owned stores and
the second-largest chain overall in the country. ACT convenience store
locations operate primarily under the Circle K, Kangaroo Express, and
Corner Store banners, while its retail fuel outlets operate under a
variety of company and third-party brands.
Respondent CAPL, a publicly traded master limited partnership
headquartered in Allentown, Pennsylvania, markets fuel at wholesale,
and owns and operates convenience stores and retail fuel outlets. ACT,
via Circle K, acquired CST Brands, Inc. in June 2017, which gave Circle
K operational control and management of CAPL. CAPL supplies fuel to
nearly 1,200 sites across 29 states.

III. The Proposed Acquisition

On July 10, 2017, ACT, through its wholly owned subsidiary Oliver
Acquisition Corp., entered into an agreement to acquire certain Holiday
equity interests, including Holiday's retail fuel outlets (the
``Transaction''). The Transaction would cement ACT's position as one of
the largest operators of retail fuel outlets in the United States.
The Commission's Complaint alleges that the Transaction, if
consummated, would violate Section 7 of the Clayton Act, as amended, 15
U.S.C. 18, and that the Transaction agreement constitutes a violation
of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C.
45, by substantially lessening competition for the retail sale of
gasoline and the retail sale of diesel in ten local markets in
Minnesota and Wisconsin.

IV. The Retail Sales of Gasoline and Diesel

The Commission's Complaint alleges that relevant product markets in
which to analyze the Transaction are the retail sale of gasoline and
the retail sale of diesel. Consumers require gasoline for their
gasoline-powered vehicles and can purchase gasoline only at retail fuel
outlets. Likewise, consumers require diesel for their diesel-powered
vehicles and can purchase diesel only at retail fuel outlets. The
retail sale of gasoline and the retail sale of diesel constitute
separate relevant markets because the two are not interchangeable--
vehicles that run on gasoline cannot run on diesel and vehicles that
run on diesel cannot run on gasoline.
The Commission's Complaint alleges the relevant geographic markets
in which to assess the competitive effects

[[Page 61302]]

of the Transaction include ten local markets within the following
cities: Aitkin, Hibbing, Minnetonka, Mora, Saint Paul, and Saint Peter
in Minnesota, and Hayward, Siren, and Spooner in Wisconsin.
The geographic markets for retail gasoline and retail diesel are
highly localized, ranging up to a few miles, depending on local
circumstances. Each relevant market is distinct and fact-dependent,
reflecting the commuting patterns, traffic flows, and outlet
characteristics unique to each market. Consumers typically choose
between nearby retail fuel outlets with similar characteristics along
their planned routes. The geographic markets for the retail sale of
diesel may be similar to the corresponding geographic markets for
retail gasoline as many diesel consumers exhibit the same preferences
and behaviors as gasoline consumers.
The Transaction would substantially increase the market
concentration in each of the ten local markets, resulting in highly
concentrated markets. In five local markets, the Transaction would
reduce the number of competitively constraining independent market
participants from three to two. In the remaining five local markets,
the Transaction would reduce the number of competitively constraining
independent market participants from four to three.
The Transaction would substantially lessen competition for the
retail sale of gasoline and the retail sale of diesel in these local
markets. Retail fuel outlets compete on price, store format, product
offerings, and location, and pay close attention to competitors in
close proximity, on similar traffic flows, and with similar store
characteristics. The combined entity would be able to raise prices
unilaterally in markets where ACT and Holiday are close competitors.
Absent the Transaction, ACT and Holiday would continue to compete head
to head in these local markets.
Moreover, the Transaction would increase the likelihood of
coordination in local markets where only two or three competitively
constraining independent market participants would remain. Two aspects
of the retail fuel industry make it vulnerable to coordination. First,
retail fuel outlets post their fuel prices on price signs that are
visible from the street, allowing competitors to observe each other's
fuel prices without difficulty. Second, retail fuel outlets regularly
track their competitors' fuel prices and change their own prices in
response. These repeated interactions give retail fuel outlets
familiarity with how their competitors price and how their competitors
respond to their own prices.
Entry into each relevant market would not be timely, likely, or
sufficient to deter or counteract the anticompetitive effects arising
from the Acquisition. Significant entry barriers include the
availability of attractive real estate, the time and cost associated
with constructing a new retail fuel outlet, and the time associated
with obtaining necessary permits and approvals.

V. The Proposed Consent Agreement

The proposed Consent Agreement would remedy the Acquisition's
likely anticompetitive effects by requiring ACT and CAPL to divest
certain CAPL and Holiday retail fuel outlets and related assets in ten
local markets.
The proposed Consent Agreement requires that the divestiture occur
no later than 120 days after ACT consummates the Acquisition. This
Agreement protects the Commission's ability to obtain complete and
effective relief given the small number of outlets to be divested.
Further, based on Commission staff's investigation, the Commission
believes that ACT can identify an acceptable buyer (or buyers) within
120 days.
The proposed Consent Agreement further requires ACT and CAPL to
maintain the economic viability, marketability, and competitiveness of
each divestiture asset until the Commission approves a buyer (or
buyers) and the divestiture is complete. For up to twelve months
following the divestiture, ACT and CAPL must make available
transitional services, as needed, to assist the buyer of each
divestiture asset.
In addition to requiring outlet divestitures, the proposed Consent
Agreement also requires ACT and CAPL to provide the Commission notice
before acquiring designated outlets in the ten local areas for ten
years. The prior notice provision is necessary because acquisitions of
the designated outlets likely raise competitive concerns and may fall
below the HSR Act premerger notification thresholds.
The proposed Consent Agreement contains additional provisions
designed to ensure the effectiveness of the proposed relief. For
example, Respondents have agreed to an Order to Maintain Assets that
will issue at the time the proposed Consent Agreement is accepted for
public comment. The Order to Maintain Assets requires Respondents to
operate and maintain each divestiture outlet in the normal course of
business, through the date the Respondents' complete divestiture of the
outlet. During this period, and until such time as the buyer (or
buyers) no longer requires transitional assistance, the Order to
Maintain Assets authorizes the Commission to appoint an independent
third party as a Monitor to oversee the Respondents' compliance with
the requirements of the proposed Consent Agreement.
The purpose of this analysis is to facilitate public comment on the
proposed Consent agreement, and the Commission does not intend this
analysis to constitute an official interpretation of the proposed
Consent Agreement or to modify its terms in any way.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-27924 Filed 12-26-17; 8:45 am]
BILLING CODE 6750-01-P

61300 Federal Register / Vol. 82, No. 247 / Wednesday, December 27, 2017 / Notices

standard within the existing structure of information collections, including the CC–5610 (Annex D), Washington, DC
the FFIEC 002 for March 31, 2018. validity of the methodology and 20580, or deliver your comment to the
Interim guidance accompanying the assumptions used; following address: Federal Trade
Board’s transmittal letter to institutions c. Ways to enhance the quality, Commission, Office of the Secretary,
for the March 31, 2018, report date will utility, and clarity of the information to Constitution Center, 400 7th Street SW,
advise institutions that have adopted be collected; 5th Floor, Suite 5610 (Annex D),
ASU 2016–01 to (a) continue to report d. Ways to minimize the burden of the Washington, DC 20024.
the fair value and historical cost of their information collections on respondents, FOR FURTHER INFORMATION CONTACT:
holdings of equity securities with including through the use of automated Nicholas Bush, (202–326–2848), Bureau
readily determinable fair values not collection techniques or other forms of of Competition, 600 Pennsylvania
held for trading (which were reportable information technology; and Avenue NW, Washington, DC 20580.
as available-for-sale equity securities e. Estimates of capital or start up costs
SUPPLEMENTARY INFORMATION: Pursuant
prior to the adoption of ASU 2016–01) and costs of operation, maintenance,
and purchase of services to provide to Section 6(f) of the Federal Trade
in existing Memorandum items 3 and 4 Commission Act, 15 U.S.C. 46(f), and
of Schedule RAL; (b) measure their information.
Comments submitted in response to FTC Rule 2.34, 16 CFR 2.34, notice is
holdings of equity securities and other
this notice will be shared among the hereby given that the above-captioned
equity investments without readily
agencies. All comments will become a consent agreement containing a consent
determinable fair values not held for
matter of public record. order to cease and desist, having been
trading in accordance with the ASU and
filed with and accepted, subject to final
continue to report them in Schedule Board of Governors of the Federal Reserve approval, by the Commission, has been
RAL, item 1.h; (c) report Schedule K, System, December 21, 2017.
placed on the public record for a period
item 5, consistent with the measurement Margaret Shanks, of thirty (30) days. The following
of Schedule RAL, item 1.i, except that Deputy Secretary of the Board. Analysis to Aid Public Comment
all debt securities not held for trading [FR Doc. 2017–27942 Filed 12–26–17; 8:45 am] describes the terms of the consent
should be measured on an amortized
BILLING CODE 6210–01–P agreement, and the allegations in the
cost basis; (d) report Schedule O, item
complaint. An electronic copy of the
4, consistent with the measurement of
full text of the consent agreement
Schedule RAL, item 3, except that all
FEDERAL TRADE COMMISSION package can be obtained from the FTC
debt securities not held for trading
Home Page (for December 15, 2017), on
should be measured at amortized cost; [File No. 171 0184]
the World Wide Web, at https://
and (e) continue to report the amount
Alimentation Couche-Tard Inc. and www.ftc.gov/news-events/commission-
from Memorandum item 3 of Schedule
CrossAmerica Partners LP; Analysis actions.
RAL in Schedule Q, item 1, column A. You can file a comment online or on
To Aid Public Comment
III. Timing paper. For the Commission to consider
AGENCY: Federal Trade Commission. your comment, we must receive it on or
The proposed changes to the report
forms and instructions described in this ACTION: Proposed consent agreement. before January 15, 2018. Write
notice would be implemented as of the ‘‘Alimentation Couche-Tard, Inc. (ACT)
SUMMARY: The consent agreement in this et al.; FTC File No. 1710184’’ on your
June 30, 2018, report date. However, as matter settles alleged violations of
discussed above, the proposed revised comment. Your comment—including
federal law prohibiting unfair methods your name and your state—will be
reporting requirements for equity of competition. The attached Analysis to
investments would have varying placed on the public record of this
Aid Public Comment describes both the proceeding, including, to the extent
effective dates for individual allegations in the complaint and the
respondents and would begin with the practicable, on the public Commission
terms of the consent orders—embodied website, at https://www.ftc.gov/policy/
June 30, 2018, report date. The agencies in the consent agreement—that would
invite comment on any difficulties that public-comments.
settle these allegations. Postal mail addressed to the
institutions would expect to encounter DATES: Comments must be received on
in implementing the systems and Commission is subject to delay due to
or before January 15, 2018. heightened security screening. As a
process changes necessary to
ADDRESSES: Interested parties may file a result, we encourage you to submit your
accommodate the proposed revisions to
the FFIEC 002 and FFIEC 002S as of this comment online or on paper, by comments online. To make sure that the
proposed effective date. following the instructions in the Commission considers your online
The specific wording of the captions Request for Comment part of the comment, you must file it at https://
for the new or revised data items SUPPLEMENTARY INFORMATION section ftcpublic.commentworks.com/ftc/
discussed in this proposal and the below. Write: ‘‘Alimentation Couche- actholidaydivest by following the
numbering of these data items may be Tard, Inc. (ACT) et al.; FTC File No. instructions on the web-based form. If
modified to provide clarity. 1710184’’ on your comment, and file this Notice appears at http://
your comment online at https:// www.regulations.gov/#!home, you also
IV. Request for Comment ftcpublic.commentworks.com/ftc/ may file a comment through that
Public comment is requested on all actholidaydivest by following the website.
aspects of this notice. Comment is instructions on the web-based form. If If you prefer to file your comment on
specifically invited on: you prefer to file your comment on paper, write ‘‘Alimentation Couche-
daltland on DSKBBV9HB2PROD with NOTICES

a. Whether the information paper, write ‘‘Alimentation Couche- Tard, Inc. (ACT) et al.; FTC File No.
collections are necessary for the proper Tard, Inc. (ACT) et al.; FTC File No. 1710184’’ on your comment and on the
performance of the agencies’ functions, 1710184’’ on your comment and on the envelope, and mail your comment to the
including whether the information has envelope, and mail your comment to the following address: Federal Trade
practical utility; following address: Federal Trade Commission, Office of the Secretary,
b. The accuracy of the agencies’ Commission, Office of the Secretary, 600 Pennsylvania Avenue NW, Suite
estimate of the burden of the 600 Pennsylvania Avenue NW, Suite CC–5610 (Annex D), Washington, DC

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Document Created: 2017-12-27 02:22:42
Document Modified: 2017-12-27 02:22:42

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Proposed consent agreement.
Dates		Comments must be received on or before January 15, 2018.
Contact		Nicholas Bush, (202-326-2848), Bureau of Competition, 600 Pennsylvania Avenue NW, Washington, DC 20580.
FR Citation		82 FR 61300