Appendix — United States v. Falstaff Brewing Corp.

Supreme Court brief1973

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Supreme Court of the United States

Ocroszen Tax, 1971

No. 71-873

Unrren States or America, APPELLANT,

Fatstarr Brewirnc CorporaTION AND

NarracansetTt Brewrxe Company

=? ON APPEAL FROM THE UNITED STATES DISTRICT

_ COURT FOR THE DISTRICT OF RHODE ISLAND

INDEX f

q 992

Relevant —::!. , ̃ ia rpg ars 1

Oe omplaint by the United States, filed July 13, 1970. 3

d “Answer of Falstaff Brewing Corporation, filed

%% 00000 06 8

‘Stipulation between the parties, approved by the dis-

triet court, and filed August 16, 1965 ........... 11

3 N of the action held before the Hon. Edward W.

Day, United States District Judge for the District

; pA of Rhode Island, commencing October 6, 1970, at

Providence, Rhode Island:

P atten. METEEEE 13

Transcript of the proceedings ............... 16

Transcript of proceedings held before the Hon.

F 4 Edward W. Day, United States Distriet Judge for

he District of Rhode Island, on October 7, 1970:

K „ö 91

oe e .

she weer, of proceedings held 1 9 the Hon.

: Testimony of Alvin Kacin—direet—[41) .

— —eross —[62] ......

Testimony of Moran J. Thomas direct [67]

Testimony of Ira Horowitz direct [744

Transcript of proceedings held before the Hon.

Edward W. Day, United States District Judge for

the District of Rhode Island, on October 9, 1970:

RR eg ae ee ee ee ae ree

“Testimony of Ira Horowitz (resumed)—

direct—[1] ......

—cross —[40] ......

redirect [833

(Despite the fact there are no pages 90 through

99, this is a clerical error and no pages are

missing.)

Testimony of Joseph Griesedieck—

direct—[101]......

Transcript of proceedings held before the Hon.

Edward W. Day, United States District Judge for

the District of Rhode Island, on October 13, 1970:

„% ̃ᷣüͤPâ — .. 0 6 6b Sow ans

on of Joseph Griesedieck (resumed)

—direct—[7] ......

——cross —[34] ......

Transcript of proceedings held before the Hon.

Edward W. Day, United States District Judge for

the Distriet of Rhode Island, on October 14, 1970:

%% P ³ Ay „%

1 of Carl W. Haffenreffer

—direct —- []

Seross in ‘

United States District Judge for

| Island, on October 8, 1970:

294

GX 3B, p. 8 (3rd 9)

GX 30, p. 5 (5th ff), p. 6 (1st and 2nd s)

GX 3D, p. 6 (3rd 1), p. 7 (1st 1)

GX 3F, p. 10 (3rd and 4th Is), p. 11 (Ist, 3rd, 4th

and 5th fis), p. 12 (Ist ), Att. C 7

GX 5, pp. 1-6,.10, 13, 14 (except last f)

KX 10, p. 1 (II, 3rd sentence), p. 5 (70 Ath and

5th Js), Pp. 6, p. 9 (16), p. 10, p. 11 (1st and 2nd

Is), p. 13 (Js 1 and 2), pp. 14-16, p. 31 (Js 2 and

3), p. 37 (Js 1 and 2), p. 41, p. 42 (2), pp. 45-46

p. 47 (Ist and 2nd fs), pp. 65-66, pp. 67 (except

last [), p. 92, p. 93 (except that portion of page

93 under the caption “Bottling and Distribu-

tion:); p. 97 (4th and 5th fis), pp. 98-99, p. 107

(4th and 5th Js), p. 108

Defense exhibits:

DX A (p. 1, 14), pp. 11-12, p. 13 — material

A OE RR T ĩ⅛ Ü——ſŹõJVo½e denn ® 1 576

Dx Linsssentisnadepetnaniactensearsens — *

5 2 4 4 *

Notice af sppeal fled by the United Staten en Des, grey ill

ber 3, 1971 .. „„ „„ —* * ‘

‘Supreme Court’s Order of February 28, 1972, noting

ng,

UNITED STATES DISTRICT COURT

Fon THE DISTRICT OF RHODE ISLAND

Unrren States or Au, ;

PLAINTIFF,

om v.

Farstarr Barw]m o CoxroraTion AND

Nazeacansett BN] N Compary,

DEFENDANTS.,

RELEVANT DOCKET ENTRIES

Date

1965

July 13 . Complaint filed.

Plaintiff’s Motion for Temporary Restraining

Order filed.

1 Motion For Preliminary In junction

ed.

14 Hearing on Injunction held. William J. Elkins,

Esq., (Dept. of Justice) Anti Trust Division,

barer er D.C. Presents Motions for Tem-

Order and For Preliminary

Injunction. Court to treat the instant matter as

a hearing on Govt’s motion For Preliminary

Injunction.

Court proceeds to decision. Motion denied.

Motion For Preliminary Injunction filed.

20 ORDER entered and filed denying Pitff’s mo-

tion for a preliminary injunction against Deft.,

Narragansett Brewing Company.

Aug. 3 Defendants’ Motion, Narragansett Brewing

Company, to Dismiss the Complaint, etc. filed.

9 Answer of Defendant Falstaff Brewing Corpo-

ration filed.

Stipulation re Falstaff as subsidiary, etc. ap-

JUDGMENT entered and fled for Deft, Nar-

(1)

ragansett 8 Company : and complaint i is

e as cee

Gort Bests its affirmative case subject to re-

war eee

Trial continues. -

Trial continues.

Deft. rests. No rebuttal.

Opinion filed.

JUDGMENT entered and filed in favor of Deft.

Falstaff dismissing complaint.

Notice of Appeal to the Supreme Court of the

ee States by the United States of America

Deft-Appellee’s Request to certify and transmit

the record to the U.S. Supreme Court filed.

Record on Appeal together with certified copy

of docket entries mailed to Clerk, Supreme

Court of the United States, Washington, D. C.

we ED

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

v. Civil Action No. 3523

Filed: July 13, 1965

Nazracansett B] NG Compary,

DEFENDANTS.)

- COMPLAINT

2 e United States of America, by its attorneys, acting

under the direction of the Attorney General of the United

brings this civil action to obtain equitable relief

against the defendants, and complains and alleges as fol-

lows:

1 a

JURISDICTION AND VENUE

1. This complaint. is filed and this action is instituted

against the defendants under Section 15 of the Act of Con-

gress of October 15, 1914, as amended, (15 U.S.C. § 25),

commonly known as the Clayton Act, in order to prevent

and restrain the violation, as hereinafter alleged, of Sec-

tion 7 of said Act, (15 U.S.C. § 18).

2. Narragansett Brewing Company has an office, trans-

acts business and is found within the District of Rhode Is-

DEFENDANTS

3. Falstaff Brewing Corporation (hereinafter referred

to as Falstaff) is named a defendant herein. Falstaff is a

corporation organized and existing under the laws of the

State of Delaware, with its principal office located in St.

4. Narragansett Brewing Company (hereinafter referred

to as Narragansett) is named a defendant herein. Narra-

gansett is a corporation organized and existing under the

laws of the State of Rhode Island, with its e pal office

located in Cranston, Rhode Island.

III

TRADE AND COMMERCE -

5. The production of beer on a commercial scale was

reinstituted in the United States on December 5, 1933, fol-

lowing the adoption of the twenty-first amendment to the

Constitution. In the fiscal year ending June 30, 1935, there

were 750 breweries operating in the United States produc-

ing 42,782,376 barrels of beer. Through merger, consolida-

tion and natural attrition, the number of breweries has de-

creased so that by June 30, 1964 there were 204 breweries

producing 103,017,915 barrels of beer annually. The share

of beer sold by the top ten brewing firms in the United

States has increased from 39.2 per cent of the market in

1951 to 56.8 per cent in 1963, while the share of the top

twenty-five firms has increased from 57.5 per cent to 82.2

per cent.

6. Defendant Falstaff is the fourth largest brewing com-

pany in the nation in the terms of barrels sold. In 1964

Falstaff produced and sold 5,819,659 barrrels of beer which

accounted for approximately 5.90 per cent of all beer sales

in the United States. In 1964 Falstaff had sales of

$139,464,822 and net earnings of $7,035,631. Its 1964 assets

were $31,077,708 Falstaff currently produces but one

brand of beer and that is sold under the trade name “Fal-

staff”. It produces its beer in eight breweries which are lo-

cated at Omaha, Nebraska; New Orleans, Louisiana; St.

Louis, Missouri (2 breweries); San Jose, California; Fort

Wayne, Indiana; Galveston, Texas; and El Paso, Texas. In

the course of its business Falstaff produces beer in said

breweries and sells substantial quantities of beer in inter-

state commerce.

7. Falstaff 33 distributed in 32 states and

the District of mbia. Falstaff beer is not currently dis -

Kn ds men ‘arenof the United

States.

8. Defendant Falstaff ae steadily expanded its produc-

des, axles and marketing atta through acquisitions of local

and regional ' breweries.’ Since’ December 1952 it ‘has ao

quired the we on the dates indicated :

«(a) Pacific Brewing & Malting Co. San Jose, California

_ —December 1952 :

— r

(d) Berghoff Brewing Co. Fort Wayne, Indiana—

Leased in 1954 and purchased in 1964

March 1956

(d) Mitchell Brewing Co. El Paso, Texas—April 1956

(e) Griesedieck Bros. Brewing Co. St. Louis,

Missouri December 1957

In addition, in June 1961 Falstaff acquired malting facili-

ties from Albert Schwill & Company of Chicago, Illinois,

and in May 1964 Falstaff acquired malting facilities from

Columbia Malting Co. of Chicago, Ilinois.

9. Sales figures in the New England market reflect the

national concentration in the production of beer. In Massa-

chusetts, for example, five companies account for over 60%

of beer sales.

10. Defendant Narragansett is the largest seller of beer

in the New England States with sales of 1,264,756 barrels

accounting for about 21% of all New England beer sales. It

is the twenty-first largest producer and seller of beer in the

United States and accounts for approximately 1.29 per

cent of all beer sold. The total dollar ‘sales of defendant

N tt in 1964 was $37,431,428 and its net income

was $713,083, Its current assets are valued at $17,950,365.

Narragansett owns and operates a brewery located in

Cranston, Rhode Island. Narragansett markets its beer

under the trade names “Narragansett”, “Croft”, “Han-

ley”, “Krueger”, “Ambassador” and “Haffenreffer”. De-

fendant Narraransett in the course of its business pro-

duces beer in Rhode Island and sells substantial quantities

of beer in interstate commerce, principally in the New

England States.

11. Falstaff is a likely entrant and a potential competi-

tor in the New England market. Furthermore, Falstaff is

the most substontial and probable of the potential entrants

into the concentrated New England market.

OFFENSE CHARGED

12 On May 26, 1965, Narragansett and Falstaff executed

_ contract entitled, “Agreement Pursuant to Plan of Com-

Liquidation” under which Falstaff will acquire the

and Narragansett will be liquidated ©

on or about July 15, 1965. The agreement provides that

Falstaff will pay Narragansett 617, 500,000 cash and

$2,000,000 in Falstaff common stock and will assume the

debts and liabilities of Narragansett.

13. By this acquisition a substantial and likely entrant

into @ concentrated market acquires the leading company

in that market. The effect of this acquisition may be sub-

stantially to lessen competition or to tend to create a mo-

nopoly in the production and sale of beer in the United

States and within certain sections thereof, in violation of

: N 7 of the Clayton Act, in the following ways, among

others: a

(a) Potential competition in the production and sale of

beer between Falstaff and Narragansett will be elim-

inated;

(b) Potential competition in the production and sale of

beer generally may be further substantially less-

ened;

(e) Industrywide concentration in the produetion and

sale of beer in the United States will be further in-

creased.

The offense alleged in this complaint will occur unless

the relief hereinafter prayed for is granted.

PRAYER

WHEREFORE, plaintiff prays:

1. That the proposed acquisition described in paragraph

12 of this complaint be adjudged a violation of Section 7 of

the Clayton Act.

2. That a temporary restraining order and a preliminary

injunction issue enjoining the defendants, their officers,

directors, agents, employees and all other persons acting

on their behalf from taking any further action to consum-

mate the acquisition agreement, or any similar agreement,

understanding of plan, and from making any changes di-

rectly or indirectly with respect to the common stock or in

respect to the corporate structure or properties of defend-

ant Narragansett, pending adjudication of the merits of

5. That

order be made and entered herein requiring defendant Fal-

to be brought before this Court in this proceeding,

and directing the Marshal of the Eastern District of Mis-

6. That plaintiff have such other and further relief as

the nature of the case may require and the Court may

deem just and proper.

7. That plaintiff recover the costs of this action.

Dated:

Nicol As DRB. Litniiacn WILIAX J. ExxINS

Attorney General Attorney, Dept. of Justice

Doxal F. Turner

Assistant Attorney General

Gorpon B. Sprvack 1

Joun J. Gal dar

Attorneys, Dept. of Justice

Raymonp J. Perrine

United States Attorney

~ UNITED ‘STATES DISTRICT COURT -

YOR THE DISTRICT OF RHODE ISLAND

1 N

| PLAINTIFF,

Reid es oS Go le er re rer Givit Action No. 3523

Farstarr Baewre 8 Filed: ne 1965

NarraGansetr Brewrne Company,

ANSWER OF DEFENDANT FALSTAFF nun

CORPORATION

First Defense

The Complaint fails to state a claim against this defend-

ant on which relief can be granted.

Second Defense

Answering the numbered paragraphs of the Complaint,

this defendant gays:

1. It admits that the Complaint purports to be filed and

this action instituted under Section 15 of the Clayton Act

to restrain what is alleged to be a violation of Section 7 of

said Act but denies that the Complaint sets out any viola-

tion of said section and denies that this defendant commit-

ted any such violation.

2. It admits that Narragansett Brewing Company, the

name of which is now Naiagans Incorporated, has an office

in the District of Rhode Island and denies each and every

other allegation of paragraph 2.

3. It admits the allegations of paragraph 3.

4. It admits the allegations of paragraph 4, except that

it says that the name of Narrangansett Brewing Company

is now Naiagans Incorporated.

5. It is without sufficient knowledge or information to

sven thee Peat terre or uel i

gra

6. It admits the allegations of paragraph 6.

7. It admits the allegations of paragraph 7.

8. It admits that since December 1952 it has acquired

ee ee we ahoet te

i ‘Columbia Making Com-

pany of Chicag „ Illinois but denies that said facilities

‘were facilities and says that they were storage fa-

, Silities ich have been and are now used only as such by

95 ‘this defendant. It denies each and every other allegation of

ph 8.

9. It has no information or knowledge sufficient to form

a belief as to the turth of the allegations of paragraph 9.

10. It denies the allegations of paragraph 10.

11. It denies the allegations of paragraph 11.

12. It admits that on May 26, 1965 it executed a contract

with Narragansett Brewing Company entitled “Agreement

Pursuant to Plan of Complete Liquidation” and denies

each and every other allegation of paragraph 12.

13. It denies each and every allegation of paragraph 13.

Wherefore this defendant prays that the Complaint be

dismissed.

41 By its attorney

Warren F. Farr MartrHew W. Gonrxvo

Ropes & Gray Hinckley, Allen, Salisbury &

50 Federal Street Parsons

Boston, Massachusetts 2200 Industrial Bank Building

Of counsel Providence, Rhode Island

CERTIFICATE

3 , ar August 9, 1965

I, Matthew W. Goring, attorney for all defendants

herein, hereby certify that I have this day served the fore-

going Answer by mailing a copy thereof, postage prepaid

to Raymond J. Pettine, Esquire, the United States District

Attorney for the District of Rhode Island, U. S. P. O. and

Court House Building, Providence, Rhode Island, and to

W. J. Elkins, Esquire, Department of Justice, Anti-Trust

Division, Room 1706, Post Office Building, Boston, Massa-

chusetts, the attorney of record for the plaintiff.

/s/ (Mathew W. Goring}

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

Unrrep States or America, J

PLAINTIFF,

v. Civil Action No. 3523

Falsrarr Brewrxa Corporation anp| Filed: Aug. 16, 1965

NaRRAGANSETT Brewine Company,

DEFENDANTS.

STIPULATION

Subject to the approval of the Court, plaintiff United

States of America and defendant Falstaff Brewing Corpo-

ration (“FALSTAFF”) hereby stipulate that unless other-

wise ordered or permitted by this Court, FALSTAFF will:

1. Conduct the business acquired from defendant Narra-

gansett Brewing Company, a Rhode Island corporation

organized in 1891 (“NARRAGANSETT”), in a separate

wholly-owned subsidiary of FALSTAFF;

2. Not permit such subsidiary to dispose of any plants,

real estate, structures, equipment, or other physical capital

assets acquired from NARRAGANSETT which are used

in the conduct of its business, except in the ordinary course

of such business ;

3. Cause such subsidiary to use its best efforts to retain

the system of distribution acquired from NARRAGAN-

SETT in substantially its present form;

4. Cause such subsidiary to retain the brand name “Nar-

ragansett” and (subject to the terms of the License Agree-

ments relating thereto) the brand names “Haffenreffer”

and “Krueger”, and to continue distributing beer under

such brands in all areas wherein they are now sold in sig-

nificant quantities ;

5. Cause such subsidiary to use its best efforts to retain

NARRAGANSETT’S normal volume of sales of beer

= the brand names set forth in paragraph 4 above;

6. As soon as such date has been decided upon, notify

the plaintiff of the date on which it intends to begin pro-

duction at any plants acquired from NARRAGANSETT of

any beer to be sold under brand names other than those ac-

quired from NARRAGANSETT in competition with beer

88 brand names acquired from NARRAGAN-

FALSTAFF BREWING CORPORATION

By /s/ Marnew W. Gortne

UNITED STATES OF AMERICA

By /s/ Joun J. Gateay

Attorney, Department of Justice

By /s/ Raymonp J. Petrinz

United States Attorney

Approved:

/s/ Evwarp W. Day

United States District Judge

Dated: August 16, 1965

IN THE DISTRICT COURT OF

THE UNITED STATES

FOR THE DISTRICT OF RHODE ISLAND

Unrrep States or AMERICA

v. C. A. No. 3523

Fatstarr Brewrne Corporation. AND

Befor his Honor, Chief Judge Day

Tuesday, October 6, 1970

APPEARANCES:

For the Government: Philip F. Cody, Esq.

Bruce Repetto, Esq.

Kenneth A. Sagat, Esq.

Department of Justice

Antitrust Division

For the Defendant: Hinckley, Allen, Salisbury &

Parsons; Matthew W. Goring,

Esq. of counsel.

James McClellan, Esq. and

Jerome M. McLaughlin, Esq.

St. Louis, Missouri

INDEX

For In

Government’s Exhibits iden. evid.

No.

1 Copy of stipulation in Civil Action No.

3523, United States of America v. Fal-

staff Brewing Corporation 6

2 Copy of interrogatories to be answered

by Defendant, Falstaff Brewing Corpo-

ration and Answers by said Defendant,

in Civil Action No. 3523, United States

of America v. Falstaff Brewing Corpora- K

tion

(a) Annual report of Falstaff, 1955

(b) ” ” ” . 1960

(e) ” 7 ” ” 1961

INDEX. (Continued)

n” ‘ E ” 1 1964 a

Copy of letter to Mr. Philip F. Cody,

Antitrust Division, U.S. Department of

Justice, from Willson, Cunningham &

McClellan, enclosing copy of agreement

between Falstaff and Narragansett, dated

May 26, 1965 and copy of instrument of

conveyance, dated July 15, 1965

Copy of Falstaff Brewing Corporation

Notice of Special Meeting of Stockhold-

ers and Proxy Statement, June 18, 1965

Copy of Supplemental Interrogatories to

be answered by Defendant Falstaff

Brewing Corporation and Answers by

said Defendant, in Civil Action No. 3523,

United States of America v. Falstaff

Brewing Corporation

Copy of article in ADVERTISING AGE,

March 2, 1964, entitled “Falstaff to

Launch $2,000,000 Drive in California

March 2”

Copy of document entitled “PROJECT

X Analysis Survey, February 26, 1962”

Copies of letters from various distribu-

tors in New England to Falstaff Brewing

Corporation, and replies by Falstaff

Brewing Corporation, 1960-1965

Copy of report of Arthur D. Little, Inc.

to Falstaff Brewing Corporation, dated

April 12, 1960

Copy of press release from Falstaff

Brewing Corporation, October 10, 1963

Falstaff Brewing Corporation press re-

lease, June 4, 1961

Copy of Summer 1961 edition of “The

Falstaff Shield” 2

INDEX (Continued)

For In

Government’s Exhibits iden. evid.

No.

14 Copy of Fall 1961 edition of “The Fal-

staff Shield” 116

15 Copy of Falstaff Brewing Corporation

press release, February 16, 1962 117

16 Copy of March-April edition of “The

Falstaff Shield” 117

17 Copy of document entitled “Brewing’s

Bright Future’—Remarks by Joseph

Griesedieck at panel discussion before

New York Society of Security Analysts,

October 16, 1964

118

TUESDAY, OCTOBER 6, 1970

10:07 A.M, : ;

[17] Tun Cuzex: United States of America: v. Falstaff

Te Court: You ee 8 f

Ma. Jonnsron: If the Court 1 for the 0 may I

introduce to the Court the three attorneys from the De-

partment of Justice who, I am sure, the Court has met pre-

viously, Mr. Philip Cody, Mr. Bruce Repetto, and Mr. Ken-

neth Sagat, who will try it on behalf of the United States

Government?

Mn. Gonma: If the Court please, may I formally intro-

duce to the Court my colleagues from the Bar of Missouri:

Mr. James McClellan on my left, Mr. Jerome McLaughlin

on my right? They are general counsel for the defendant..

Tun Court: Very well; you may proceed.

Mr. Copy : Good morning, your Honor.

May I take perhaps one minute just to speak with de-

fense counsel about a matter that came up just this mo-

ment?

Tue Court: Certainly.

(A pause)

[18] Tun Covar: Go right ahead.

Mn. Copy: Thank you, your Honor.

This case involves basically an alleged violation of Sec-

tion 7 of the Clayton Act. It involves the acquisition by the

fourth largest brewing corporation in the United States in

1964, the acquisition having taken place in 1965.

Tue Court: It took place in 19651

Mn. Copy: The acquiring corporation was a +; tt

che Government will show this—and a resourceful brewer.

4 —— the most potential competitor to so-called

brewers. Even though at the time it was a re-

gional, it was the most likely to become a national. And the

Government will also show that the corporation and its of-

ficers were aware of that fact. The acquired ner,

in this complaint i is that Falstaff, the defendant, was a po-

tential competitor, the most potential entrant,—

Tre Cover: Most potential?

Mn. Copy:—into a concentrated industry. It had [19]

shown constant growth in geographic expansion. It had

. demonstrated constant corporate interest over at least five

years—

Tue Covrt: It had done what, demonstrated what?

Mn. Copy : Corporate interest.

Txe Covnr: Corporate interest?

Mr. Copy: Yes.—over at least five years in entering the

Northeast, including New England. In fact, the Govern-

ment’s proof will demonstrate that Falstaff announced a

gnawing desire to be a national seller. This was to meet the

competition of national sellers whom they competed

against in their own regions and also to achieve the advan-

tages of being a national seller. So it was offensive and

protective. Of the top ten brewers in the nation only three

did not sell throughout the nation. We will be able to show

that Falstaff of these three was the most potential.

The New England market was characterized by a high

concentration of sales among a small number of brewers.

We believe that in this type of situation a new entrant

could have prompted competition. However, Falstaff did

not choose to prompt competition. Falstaff set out to ac-

quire a leading brewer in a concentrated market. It did not

seek a toehold entry. It did not seek an entry by which it

might have grown over a number of years in this market.

[20] Instead, it sought to acquire the leading brewer in

this market, a concentrated market. Falstaff, being the

most likely entrant, was certainly the most likely source of

| pro competition in this market if it had entered in a way

other than by acquiring the leading brewer in the market.

5 Pn

dur proof.

Tun Count: Very well ;

Mr. Copy: I believe jurisdiction and venue regarding

this action have been more or less settled by the pleadings

Te Court: There is no question as to jurisdiction and

venue, is there, Mr. Goring?

Mn. Gone: Jurisdiction and venue are not challenged.

Tue Cover: I thought not.

Mr. Copy: Will it be necessary. then, your Honor, to

enter the complaint and answer as exhibits!

TR Court: They are part of the case. They are already

here. You mean as exhibits?

Mn. Copy: Yes. a

TRA Court: No, I think not.

Mn. Copy: The line of commerce—

Tue Court: Line of commerce? i

Mn. Copy: Yes.—is a significant factor in a Section 7

case. In this particular case the line of commerce [21] has

been stipulated to.

Tae Court: Stipulated?

Mr. Copy: And that is simply the production of beer. In

support of that I would offer to mark for identification an

order filed 2/12/69—a stipulation; I am sorry—a stipu-

lation filed 2/12/69 relating to the stipulation as to line of

commerce and various other data.

Tae Court: You are offering it, as you say, as an ex-

hibit for identification? Is that what you said?

Mr. Copy: Yes, sir.

Mn. Gontxo: That stipulation is a part of the official rec-

ord, your Honor.

Tze Court: Let's mark it then as—it is in the record, is

it, Mr. Goring?

Mn. Gore: It should be.

Tn Court: Among the papers?

Mn. Gonrxe: It should be.

Mn. Copy: If it is in the record, I will withdraw it.

Tar Count: If it is in the record, it need not be Well,

you can have it—Let it be marked as an exhibit, Exhibit 1.

It will be clearly a matter of record.

Mr. Copy: Government’s Exhibit 1.

(Copy of stipulation in Civil Action No. 3523, United

States of America v. Falstaff Brewing Corporation,

marked Government's Exhibit 1)

Mr. Copy: I would now like to offer Government’s Ex-

Tun Court: It has been marked as a full exhibit.

Mn. Copy: Oh, I see, your Honor. I understood perhaps

we might have to mark it for identification first and for ad-

mission next.

Tue Court: No, I don’t think so. We will do it in one

fell stroke—A full exhibit.

Mr. Copy: That cuts our time in half.

TRR Court: Beg your pardon?

Mr. Copy: That cuts our time in half.

Falstaff was in the business of brewing beer before pro-

hibition. I believe it was the first brewery to acquire a li-

cense to brew beer after the repeal of prohibition. It has

over 31 years of brewing experience. And in 1964 it was

sold not only in the United States but in 35 foreign mar-

kets as well.

T Court: Sold where, in what?

Mr. Copy: In 35 foreign markets, your Honor.

T Court: I take it these are to be matters of proof.

Mr. Copy: I will cite the proof.

TRR Court: What is that?

Mn. Copy: I will cite the proof.

Tue Court: I understand you will offer evidence of

these allegations, these statements you are making.

[23] Ma. Copy: Yes, sir. I will cite them within one min-

ute.

It was a distributor for a foreign beer in at least 30

states. Its management was aggressive. It was or it did

consider itself as a front runner in the industry, an inven-

tor in packaging, a leader in quality control, an effective

advertiser, a researcher, and a developer of improved dis-

tribution practices. In short, Falstaff was by no means a

stagnant company. It was a progressive corporation,

fourth largest in its field in the nation.

In support of this I offer as Government’s Exhibit 2 in-

terrogatories filed November 10, 1965 and answers thereto.

Mr. Gone: I believe those are part of the record.

TRR Court: Now, gentlemen, customarily in a trial of a

case if it is sought to introduce interrogatories, the ques-

tions and answers are read into the record. But if you gen-

tlemen want to stipulate that these interrogatories and the

answers thereto may be offered by way of an exhibit which

will make them a part of the record, I don’t have any per-

» 8onal objection to it.

W er ee eee ee

ion, your Honor.

Mn. Copy: No objection, fia

Tun Court: ee eee and oo

time. Let's mark that Exhibit 2.

[24] Those are dated November 10, 19651

Tan Gann: Filed Nemmsber 10,1960, and answers there-

8 Very well.

(Copy of Interrogatories to be Wers by Defendant,

Bi Corporation and Answers by said De-

fendant, i in Civil Action No. 3523, United States of Amer-

ica v. Falstaff Brewing Corporation, marked Government's

Exhibit No. 2)

Mr. Copy: In further support of our contentions we will

introduce the 1955 annual report, 1960, 1961, 1962, 63, and

64 annual reports of the Falstaff Brewing Corporation.

Tue Court: Those reports are submitted to stockholders

or to some agency, or what?

Mx. Copy: They would be submitted, I assume, your

Honor, to the Securities and Exchange Commission and to

shareholders and would be made available to the general

public through various outlets.

Mn. Gonmo. That is correct.

Tun Court: There is no objection, I take it, Mr. Goring?

Mr. Gone: None, your Honor.

[25]... Tue Court: Exhibit 3.

Mn. Copy: Will they be marked separately, your Honor?

Tue Ctanx: 1955, 3(a); 1960, 3(b); 1961, 3(c); 1962,

3(d); 1963, 3(¢) ; and 1964, 3(f).

(Copies of annual reports of Falstaff Brewing Corpora-

tion for 1955, 1960, 1961, 1962, 1963, and 1964 marked Gov-

ernment’s Exhibits 3a), 3(b), 3(¢), 3(d), 3(e) and 3(f),

respectively) 75

Mn. Cobr: There are: sections in each dtm relevant to

cach af the aubjects that I have discussed, but to reed

them, I think,—

Tun Covnr: A little louder, please.

«Me G e read them: would “unduly burden te

Tas Covar. I don’t want to read any more than I have

to.

to. You can be sure of that. Are there any particular sec-

tions you want to specify?

Mn. Copy: No, your Honor. ‘ee ek

~ Tue Court: I will leave it to counsel to point out the

pertinent sections before we finish here.

Mr. Copy: I would rather they be considered in total.

Tun Courr: They might be, but the time element is a

factor here. I don’t want to read surplusage. It would be of

no help to me.

Mn. Copy: In 1964 Falstaff had culminated or was in

126] the continuance of, shall I say, a growth of constant

expansion in terms of plants, capacity, and sales? I believe

our pre-trial brief shows that from 1960 through 1964 Fal-

staff’s sales increased from 115.9 or so million dollars to

about 139.4 million dollars. Its barrel sales had risen by

nearly a million barrels.

TRE Court: That is in a period of five years?

Mr. Copy: Yes, sir. Fortune magazine rated Falstaff as

the 375th largest industrial corporation in terms of sales in

the entire country. As I mentioned before, it was the

fourth largest brewer. Its sales territory covered 32 states.

Tun Court: These are representations of facts which, I

assume, will be supported by evidence.

Mn. Copy: I will give citations for them momentarily,

your Honor.

Tue Court: Very well, I just wanted to make certain

you have evidence in support of these statements.

MI. Copy: Very good.

Tue Court: Or a stipulation by the parties as to their

existence.

Mn. Copy: Over the period its sales had increased 80

percent; its net earnings, by 51 percent; and its working

capital, by 152 percent.

I will cite to your Honor in support of these statements

[27] the 1961 report already in evidence as Government’s

— 3(c), pages 4 and 5; its 1964 report in evidence as

Tue Court: 3(a) !

Mn. Copy: 3(f), your Honor. —particularly there is a

10-year summary in that annual report and that is more or

less specifically what we are thinking about.

I Qwould also cite to your Honor page 1 of that report,

3(f); also, to the stipulation: in this action in evidence as

Exhibit 1, paragraph 18 and paragraph 2.

In short, your Honor, Falstaff was not in any sense

Tue Cover: Was not what, please?

Mr. Copy :—in any sense whatsoever a failing company

or even a company that was faltering. It was a growing ag-

gressive regional brewer, eager to expand, as we shall

show later.

Mz. Gore: May I call the attention of the Government

to the fact that at one point in the taking of depositions,

which were taken by Mr. Farr, were taken by the Govern-

ment attended by Mr. Farr in his lifetime, Mr. Farr con-

ceded that this was not a failing company situation.

Te Court: Who is Mr. Farr, your predecessor?

Mn. Gonrwo: Mr. Farr was counsel of record for Falstaff

in the early stages of this case.

TI Court: He is now deceased, I take it.

128] Mr. Gornva: That is correct.

Mn. Copy: J recall that, your Honor. But it was by no

means a faltering corporation. It was a growing, expand-

ing young corporation with, from what we have seen, excel-

lent management and potential for growth. And as we will

point out, that growth was, first of all, of a geographic na-

ture; and, second of all, directed precisely to the Northeast

and to New England. 5

And I would point out to the Court that New England

has been stipulated to as a relevant geographic market in

which to measure the effect of this acquisition, and that in-

eludes the states of Connecticut, Rhode Island, Massachu-

setts, Vermont, Maine, and New Hampshire.

In connection with the acquisition itself I would like to

mark for idenf*fication—place into evidence a document

covered by a letter from Willson, Cunningham & McClellan

entitled “Agreement Pursuant to Plan of Complete Liqui-

dation,” and also an attached instrument of conveyance

dated July 15, 1965, sent under the same cover.

Mr. Gorme: Refresh my recollection, Mr. Cody. That

was one of the designated documents?

MX. Copy. Tes, it was; |

Mn. Gorrne. I have no objection to it being marked as a

full exhibit. e eee t

Tun Court: It is entitled, for the record, Agreement

{29} Pursuant to Plan of Complete Liquidation.” Is that it?

Does it bear a title, gentlemen?

Tae Cuzex: It is a letter of December 15, 1969, enclosing

copy of agreement between Falstaff and Narragansett and

copy of instrument of conveyance dated July 15, 1965.

Tn Court: It may be marked Government’s 4.

Mn. Copy: We have certain clips, your Honor.

Tue Court: I can’t hear you.

Mr. Copy: We have a master set where we have certain

clips in them. By mistake I offered the clipped set.

Tae Court: Government’s Exhibit 4.

(Copy of letter to Mr. Philip F. Cody, Antitrust Divi-

sion, U.S. Department of Justice, from Willson, Cun-

i & McClellan, enclosing copy of agreement be-

tween Falstaff and Narragansett, dated May 26, 1965 and

copy of instrument of conveyance dated July 15, 1965,

marked Government’s Exhibit No. 4)

Mr. Copy: We believe that the major harm in this ac-

quisition comes not from Falstaff’s entry into New Eng-

land. Certainly in a concentrated market such an entry

would be -welcome. The question becomes how it enters.

Innstead of taking alternatives Falstaff entered by acquir-

ing the No. 1 brand in New England, the 21st largest

brewer in the United States, a brand that had 65 percent of

the Rhode Island [30] This again was not a case of a fal-

tering company. Its dollar sales in 1960 were 26.4 million.

These rose in 1964 to 38.3 million. Its barrel sales rose

or less than 900,000 in 1960 to well over 1.2 million by

In support of this contention the Government cites the

stipulation already entered in evidence as Government’s

Exhibit 1, paragraphs 1, 2, 3, 4, and 7. And it also cites in

support of this the Falstaff Brewing Corporation notice of

special meeting of Stockholders and proxy statement,

dated June 18, 1969—1965; I am sorry—signed by Harry

J. Pettey, Secretary, as Government’sexhibit.

Tue Court: It may be marked Government’s Exhibit 5.

(Copy of Falstaff Brewing Corporation Notice of Spe-

cial Meeting of Stockholders and Proxy Statement, June

18, 1965, marked Government’s Exhibit No. 5)

Mn. Copy: In the same connection we will direct your

Honor’s attention to answer to interrogatory No. 11.

T Court: Answer to interrogatory No. 111

Mn. Copy: Correct. And also answers to supplemental in-

terrogatories 1 and 2. edt ' 5

e RR eee geg of the

Honor. 15 shops e e 2 1 13 uk

1311 Te Covar: But I say are those questions and an-

swers in evidence as exhibits as yet! N

Mn. Conr: No, I am sorry; they are not, your Honor.

May I move that the answers of defendant Falstaff Brew-

ing 8 9 8 to supplemental interrogatories of the

Mn. Gortna: Mr. Cody, those two interrogatories and the

answers thereto are a part of this record because I filed

Ma. Copy: All right; if that is so stipulated.

Tne Court: They are in the pleadings of the case. But

we did, did we not, permit you to file copies of other ques-

tions and answers as an exhibit, Exhibit 2?

Mn. Copy: Yes, your Honor. :

Tun Court: I think we ought to be consistent so when it

comes time to go through the record of this case for the

purpose of writing an opinion, I don’t have to be searching

everywhere. If we adopt a pattern, it seems to me we ought

to follow it. F

Mn. Copy; All right; very good. I move that Govern-

ment's supplemental interrogatories to be answered by the

ere. in this action, dated 4/12/66, and the answers

ereto,—

TA Court: These are supplemental interrogatories you

are talking about now?

Mr. Copy: Yes, your Honor.

(32] THe Cover: Questions 1 and 2. What was the other

one?

Mr. Cony: 3, 4, and 7. I wonder, your Honor, would there

be any objection to entering the entire interrogatories and

answersasanexhibit? §=— fF ve

Mn. Gone: None whatever.

Tue Court: Government's Exhibit 6. ime

Mr. Copy: By pointing out the particular interrogato-

ries, your Honor, I only directed your attention to the most

relevant ones. All, however, we believe are relevant and we

will rely upon them. So that is why I requested that the en-

tire interrogatories and the answers thereto be taken as

one piece of evidence. * inst

Tue Covet: Ordinarily pertinent parts of questions and

answers to interrogatories are read into the record. But if

there is no objection by counsel and you want to leave it

that way, I will permit the introduction of the entire sets

of interrogatories. . se

Mn. Gorrna: I am indifferent on that point.

Tun Counr: Very well; it may be marked Government’s

Exhibit 6. 6

(Copy of Supplemental Interrogatories to be Answered

by Defendant Falstaff Brewing Corporation and Answers

by said Defendant, in Civil Action No. 3523, United States

of America v. [33] Falstaff Brewing Corporation, marked

Government’s Exhibit No. 6)

‘Tue Court: I take it in the memoranda the particular

interrogatories and the answers thereto will be stressed by

_ counsel. :

Ma. Copy: Yes, your Honor.

would also for the record commend to your Honor’s at-

tention interrogatory 11, as well as the answers to supple-

mental interrogatories 1 and 2.

‘Tue Covet: You have already done that, haven’t you?

My notes indicate—

Mn. Copy: No, your Honor, I don’t think I did.

Tun Court: My notes indicate a few minutes ago you

called my attention to the answer to interrogatory No. 11.

Then you referred to supplemental interrogatories Nos. 1,

2;'3, 4, and 7, and the answers thereto. Is this something

additional ?

Mr. Copy: To set the record straight I meant to refer to

stipulation 1 and 2.

Tux Court: Stipulation?

Mn. Copy : Yes—which is Government’s Exhibit 1.

Tux Cover: Government’s Exhibit 1.

Mr. Copy.—3, 4, and 7. i

Tue Court: You mean interrogatories 3, 4, and 7.

Mn. Copy: No, sir; stipulation. i

134] Tax Covrr: Stipulation, Exhibit 1.

M. Copy: Paragraphs 1, 2, 3, 4, and 7.

Tue Cover: Oh, paragraphs. Very well. Paragraphs 1, 2,

3, 4, and 7 of stipulation marked Exhibit 1.

Mn. — Right. And answer to interrogatory, para-

Tn Cover: You mean answer 11. Paragraph 117

Mn. Copy : The answer, paragraph 11.

Tx Court: Answer to interrogatory No. 11.

Mn. Copy: Yes, sir. And the answers to supplemental in-

terrogatories 1 and 2.

I was wondering, your Honor, would it be favorable to

the Court if we could take a five-minute break?

Tux Court: Do you feel it necessary? We have only

been going an hour.

Ma. Copy: It might help in the presentation to get our

documents back in order.

Tre Court : We will take a five-minute break.

(RECESS) ‘a

Mn. Copy: Your Honor, the Government intends to show

at this point Falstaff’s desire to become a national brewer,

which desire necessarily intended that it enter New Eng-

land. Falstaff had been shipping over 800 miles from New

Orleans, its brewery in New Orleans, to parts of Florida ;—

[35] TRE Court: New Orleans to parts of Florida?

Mr. Copy: Yes, sir. —500 miles from Omaha to Denver

and Cheyenne.

Te Cover: You mean it had another brewery in Omaha!

From Omaha to Denver?

Mn. Copy: from Fort Wayne, Indiana, where it had a

brewery, to Georgia.

New England was not sufficiently further from these

points than from, let’s say, its Fort Wayne, Indiana, brew-

ery. ;

Falstaff also utilized computers to guarantee the

efficiency of its cross-shipping.

Tue Court: Of its what?

Ma. Copy: Shipping. In fact, in 1964 Miller Brewing

Company, one of the top ten, competed in most areas of the

nation, shipping from a single brewery in Milwaukee. That

beer was sold in New England. 12 % re!

What we are discussing here are alternative methods of

Seine, ar bn. fe into New England other than by the ac-

quisition of the leading competitor in this area.

M. Gonmo: Excuse me, Mr. Cody. I ean’t let that pass.

They were not a competitor in New England at all.

Tx Cover: What do you say to that?

Mn. Copy: Very well; perhaps I did not make myself

„The point that we are trying to make at this point

[36] is that Falstaff had alternative methods to enter New

England other than the acquisition of the leading brand.

Tue Covnr: In other words, you are saying because oth-

ers shipped long distances into New England, it was open

to Falstaff to do the self-same thing.

Mr. Copy : And Falstaff had done the self-same thing.

Tux Covnr: Shipped into New England

Mn. Cony : No, shipped many miles ; 800, 500,—

Tux Court: I appreciate that.

Mr. Copy: Et cetera. In support of this we cite interro-

gatory No. 1 and the answer thereto, the 1961 annual re-

port of Falstaff which is Government’s Exhibit 3(c), page

; the 1962 annual report of Falstaff which is Govern-

ment’s Exhibit 3(d), page 7 ;—

Tux Court: 3(b) or (d) :

Mn. Copy: (d).

Te Covnr: (d), isn’t it?

Mr. Copy: (d), your Honor.

Tux Court: Page what?

Mr. Copr: Page 7, your Honor. and Falstaff’s annual

report of 1963, 3(e) in evidence, page 5. We also cite from

the deposition of Joseph Griesedieck.

Te Court: Deposition of J oseph who?

Mn. Copy: Griesedieck.

Tux Court: How do you spell that?

[37] Mn. Copy: G-ri-e-s-e-di-e-ck. I believe it is stipu-

lated that Mr. Griesedieck is and was from 1953 to date

President of Falstaff Brewing Corporation.

Mr. Gonma: That is essentially correct. It is in the rec-

ord. I am going to invite the Government’s attention to the

fact that Mr. Griesedieck is present in the courtroom avail-

able, if the Government chooses, to testify from this stand.

Tux Covnr: Very well. ,

MI. Copy: At page 28 of Mr. Griesedieck’s deposition the

_ Second question was:

Were you shipping from the Fort Wayne brewery to

District of Columbia?” BA

Answer: That's right.”

Third question, same page:

“Was any other plant shipping beer into that area?”

Answer; “I don’t think that area, particularly. I think

they may have been 0 4e Wie some of the Florida,

Georgia, markets, There may be times in the course of the

summer when we’re short of production at one plant where

we have to cross-ship at a cost to us in freight.” Page 62 of

por same deposition Mr. Griesedieck [38], testifi under

oath:

“Q. Is there any, were there any beers shipped into the

State of Florida which come from Fort Wayne?

4 At certain times of the year, I think there is when

they are short of capacity in New Orleans.

40. In other words, this is one of your cross shipping

times, by cross shipping— -

“A. Primarily because of the change in packages to the

one can packages and in our capability in New Orleans, we

haven’t been able to keep pace with the requirement for

canned package and to ship into Florida, which is primar-

ily a can state, we had to ship in from other points at cer-

tain periods of the year, June, July, August.

„. Have you shipped from any other plants other than

Fort Wayne on this cross shipping basis?

“A. Into Florida or generally?

“Q. Into Florida, I’m sorry.

“A, I think at certain times even when we were short in

Fort Wayne, we have, on occasion, shipped from Galves-

ton. I’m not sure. We may have shipped from St. Louis.

We have to be constantly cross shipping, depending upon

what the market requirements are.“ ne

1391 On 67 of the same deposition, first question:

“What determination, who determines the final shipping

points, a particular brewery? ? oy

„. Who approves the computer’s findings? Is this the

ing vice-president? «eae a sinha

“A. No, 1 don't think he ge@ into it. We have changed

this around so many times, it’s what we call a p

;

and traffic feed-in, put into the sales require-

ments are fed in and the computer determines where it

ought to be and I think at one time Mr. Gutting was sched-

uling it. We’ve got a change in the last year. I don’t re-

member who is involved now.“

But in any event I think this demonstrates that Fal-

staff’s ability to ship long distances was very flexible.

I refer the Court’s attention to page 97 of the same

deposition where Mr. Griesedieck testified, in response to

“You say that currently that you are shipping Falstaff

beer from the Narragansett plant to Virginia, did I

hear you correctly?

[40] “A. As far as I know, we are. Yes, I’m sure we are.

. Had you been shipping to Virginia prior to the Nar-

Excuse me your Honor. In connection with the last depo-

sition I read—the last designation—I should have read one

more question and answer. And the question was:

Were you again * *”

Tun Court: Page 971

M. Copy: Les, sir.

“Were you again selling selected markets?”

Mr. Griesedieck’s answer was:

“I think we were selling the whole State of Virginia at

that time.”

Now as far as shipping as an alternative answer is con-

cerned, advertising—

Mn. Gonma: I am sorry, Mr. Cody. I cannot hear you

T Count: As far as shipping. Yes? ..

Mn. Cor: as an alternative method of entry

Tun Count: In New England. Yes! 0

Mn. Copy: — into New England, it should also be noted

that Falstaff was an effective advertiser, one who could

produce demands for its product. It had for years adver-

tised the “Game of the Week.”

Tun Covrr: “Game of the Week”?

Mn. Copy: Yes, sir.

Tun Court: Meaning what?

Mn. Copy: Baseball game on network television.

Tun Cover: You mean it was the sponsor of a program?

Mr. Copy: Correct. It had spent $2 million or therea-

bouts on an advertising campaign in California, and its ads

were in national magazines such as TRUE, LOOK, and

These facts, your Honor, will be amply supported by the

advertising sections, which are set out in the annual re-

ports of 1955 of Falstaff, which is Government’s Exhibit

3(a); 1960, Government’s Exhibit 3(b); 1961, Govern-

ment’s Exhibit 3(¢); 1962, Government's Exhibit 3(d);

1963, Government’s Exhibit 3(e); and 1964, Government’s

Exhibit 3(f), as well as the March 2nd, 1964 issue of AD.

VERTISING AGE entitled “Falstaff to Launch $2,000,000

Drive in [42] California March 2,” which I offer as Gov-

ernment’s Exhibit 7.

Tue Covnr: It may be marked Government’s Exhibit 7.

(Copy of article in ADVERTISING AGE, March 2, 1964,

entitled “Falstaff to Launch 62,000,000 Drive in California

March 2” marked Government’s Exhibit No. 7)

Mn. Copy: I should also note that in 1962 a market study

performed by Dancer-Fitzgerald in connection with Fal-

staff’s negotiations with Liebmann

Tun Court: How do yon spell that?

Ma. Copy: L-i-e-b-m-e-n-n. —Brewing Company shows

that retailers in New York—and again this is in connection

prone that retailers in seh York, New

ersey, uth Connecticut, where Falstaff wasn’t

doing any business, not selling any beer, thought of Fal-

staff as a premium beer. A popular. priced entry by Fal-

staff may have been significant as a, marketing device. But,

nevertheless, at this point retailers in that area did know

ol Falstaff and they thought it was a premium beer.

Mn. Gon : Mr. Cody, do I understand you offer that as

nexhibit? —

MX. Copy: Yes, I shall.

Mn. Gornre: You haven't offered it yet?

Mn. Copy : No.

[43] Mn. Gortwa: I might advise you I shall object on

the ground of relevance.

Mn. Copy: The Government offers an exhibit entitled

“PROJECT ‘X’ Analysis and Survey, February 26, 1962,”

as Government’s Exhibit 8.

M. Gontwo: Is that the one you have just been talking

about?

Mn. Copy: Yes, it is.

Mn. Copy: That is in evidence.

Mn. Gontwo: I beg your pardon?

Mn. Copy: The $2 million expenditure in California.

Tun Covnr: As it comes out of the ADVERTISING

AGE? .

MX. Copy: Yes.

Ma. Gorrne: I am merely saying it is the same sort of

Tun Court: Frankly, the situation in New York, New

Jersey, South Connecticut, bears little relation in my opin-

ion to the New England territory. I will sustain the objec-

tion. It may be marked merely as an exhibit for [44] iden-

tification.

_ Tue CLank: Government’s 8 for identification.

Mn. Copy: Your Honor, may I be heard on that?

Tun Covrr: You may be heard but I have ruled. I don’t

gay you can’t be heard.

MI. Copy: The Government intends to prove by the in-

- troduction of this evidence that Falstaff knew or at least

had been informed of the fact that it had brand recognition

in this area.

It is conceivable that the defendant may argue that it

would not purchase the beer simply because they.

know about the brand: This seems to show that trade peo-

ple did in fact know about the brand in this area. There

was knowledge of it. kent Bases „ seid

Tun Court: Lou are talking about another area. You

are not talking about the New England area; you are talk-

ing abont New York, New Jersey. teed 6 f

Mn. Copy: We are talking about southern Connectieut.

Tun Covnr: Southern'Connecticut.. * N :

Mu. Copy: And it is also significant that it had. this

brand image in an area where it was not even selling beer.

Tae Court: That is a part of some survey that was

made. The basis of the survey and who made it— axe

[45] Mn. Copy: The survey was requested by Narragan-

sett—Falstaff, rather. ‘ait

Te Court >I reiterate I don’t see the relevancy of it at

the moment. If something develops later that has a bearing

on its relevancy, I will hear you again, but we will leave it

as it is. It may be marked for identification only. ,

(Copy of document entitled “PROJECT ‘X’, Analysis

and Survey, February 26, 1962,” marked Government’s Ex-

hibit No. 8 for identification)

Mn. Cony: May I make it clear for the record, your

Honor, that the testimony concerning the offered document

does show that Falstaff requested its preparation and ac

cepted.it? For that may I read

Tu Court: Read what

2 Copy: Several questions and answers from a deposi-

Tun Covnr: You are representing to the Court that the

survey was requested by Falstaff. Is that it? .

Mr. Copy: Correct.

Tue Cover: It doesn’t change my ruling.

Mr. Copy: Is that stipulated? !

Mn. Gonmmd: I will the survey was requested by

Falstaff. I will not any concessions whatever as to

mne validity of the findings of these experts nor as to [46]

relevance of what they had to say-evenifvalid.- ©.

Tun Covnr: I think your rights are fully preserved, Mr.

Cody. Let’s proceed. ee

Mn. Copy: All richt. On

5 d

what, I have covered, your

Honor, the last half an hour or so concerning alternative

methods of entry, including shipping, there are various

other depositions. which may be read into the record and

also several letters as well. With the Court’s permission we

will proceed to read them in.

Tn Court: Go ahead. That is why we are here.

Mn. Gon: May I reserve the right which I have under

the rules, particularly Rule 32, to put in—require the Gov-

ernment to put in or put in ourselves—any other portion

of these depositions at the end of the series of deposition

treatment.

Tun Court: Certainly I understood you gentlemen had

stipulated rather than burden the court with the entire

3 you would select pertinent parts. That ap-

plies to sides.

Mx. Gortne: That is correct. So we shall read some por-

tions of these depositions perhaps after all of the deposi-

tions being handled by the Government are in.

Mn. Copy: After we close.

M. Gomo: Not necessarily.

M. Copy: I was thinking, your Honor, it might be 147

dest if that procedure was followed after we closed.

Tun Court: Let's present this case in orderly fashion. It

‘might well be some review will be needed. I don’t know just

‘what you have in mind. Once you close, you have closed.

You don’t want to reopen the case. Presumably we are

going to have a full and complete presentation of what

ever it is the parties desire to present during this trial, not

‘after the end of the trial. I don’t quite follow your ap-

proach here, frankly.

Mn. Copy: All right; very well.

Ms. Rererro: Your Honor, in accordance with the point

that Falstaff could have shipped into New England, I

would like to read—

Tun Cover: You would like to read what?

Mn. Reperro: I would like to read paragraph 3 or an-

= 3 of the interrogatory which has been designated

Exhibit 2.

oy Covar: Exhibit 2. You are reading interrogatory

2 Mn. Repetto: Answer 3.

Tn Court: Oughtn't we have the interrogatory and the

gis oo to me that is ‘the orderly way of present

1 8

Mn. Reverro: The ithe interrogatory 8: [48]

“List the states in Falstaff sold its beer as of Janu-

e eee en

Tue Covat: For each year, 1950—

Mn. Rererto: To 1965.

Tue Covar: January of 1965, 1 ppb

Mu. Rurkhrrb: “ * to 1965, it reads.

aud designate for each such time which brewery

served which states.“

The answer 3 reads as follows :

Following are the various States in which Falstaff sold

23 A 5 each og were to

@ t or ts w were principal sup-

pliers of such States are shown: *

rey :

Served entire period.

Principal supplier—New Orleans.” '

Tue. Covar: What is that, please: Principal supplier?

Mn. Rererro: New Orleans.

“ALASKA” *

Entered market in 1965

Principal supplier—San Jose.“

It doesn’t list “California” but—

Mn, Gong: I will agree.

[49] Tun Count: I think we can agree on that, can’t we?

Mn. Rererro:

“ARIZONA

an Entered market in 1956.

‘supplier—El Paso.

“ARKANSAS

Served entire period.

‘Principal supplier—St. Louis.

“CALIFORNIA

' Entered market 1952.

' Principal supplier—San Jose.

“COLORADO

Served entire period.

Principal supplier Omaha.

*DISTRICT OF COLUMBIA

Entered market in 1962.

__ Principal supplier—Fort Wayne.

“FLORIDA ——

Served entire period.

Principal supplier—New Orleans.

_ “GEORGIA

Served since 1953.

. Principal supplier New Orleans, subsequently Fort

Wayne following acquisition and remodeling.

[50] “HAWAII

Entered market in 1954.

Principal supplier—San Jose.

“ILLINOIS

Served entire period.

Principal supplier—St. Louis.

“INDIANA

Some sales made in Indiana in 1953, but market opened

in 1954.

Principal supplier—Fort Wayne.

“IOWA

Served entire period.

Principal supplier—Omaha.

“KANSAS

Entered market in 1953.

Principal supplier—Omaha.

“KENTUCKY

Served entire period.

Principal supplier—St. Louis.

“LOUISIANA

Served entire period.

Principal supplier—New Orleans.

“MARYLAND

Entered market in 1965.

Principal supplier—Fort Wayne.

151] “MICHIGAN

' Entered market in 1954.

Principal supplier Fort Wayne.

“MISSISSIPPI

Servedentireperiod.

Principal supplier-—New Orleans.

“MISSOURI

Served entire period.

Principal supplier St. Louis.

“NEBRASKA

Served entire period.

“NEVADA — 5

Entered market in 1954.

Principal supplier San Jose.

“NEW MEXICO

Entered small portion of market in 1954, but more exten-

sively in 1956 upon acquisition of El Paso plant.

Principal supplier—E] Paso.

“NORTH CAROLINA

’ Entered market in 1961.

Principal supplier—Fort Wayne.

“OHIO

Entered market in 1954.

Principal supplier—Fort Wayne.

“OKLAHOMA

Served entire period.

Principal supplier—Omaha

“SOUTH CAROLINA |

Entered market in 1960.

Principal supplier—Fort Wayne.

“SOUTH DAKOTA

Served entire period in very small way.

Principal supplier—Omal

“TENNESSEE

Served entire period.

Principal supplier—St. Louis.

“TEXAS

Served entire period. |

Principal supplier Galveston.

“VIRGINIA

- Entered market in 1963.

Principal supplier—Fort Wayne.

“WEST VIRGINIA

Entered market in 1963.

Principal supplier Fort Wayne.

“WYOMING

Served entire period in very small way.

Principal supplier—Omaha.”

Your Honor, I would like to read from the deposition of

153 Karl K. Vollmer.

Tx Court: How do you spell that last name?

Mn. Rererro: V-o-]-l-m-e-r. And, if I could, I would like

to read some of the introductory material to show his posi-

tion with the company.

Tue Cover: I think you should. Go ahead.

Mn. Reperro: Page 2; questions 1, 2, 3, and 4.

. Mr. Vollmer, would you please tell us by whom you

are employed?

SA. Now!

“Q. Yes, now.” ö Hea:

TI Court: When was this taken, by the way?

Mn. Rererto: This was taken

Mn. Gonrwd: April 28, 1967.

orm Rererro: That is correct, your Honor. Taken in St.

uis.

Tux Covrr: In St. Louis?

Mn. Repetto: Yes, sir. I repeat the second question.

“Q. Yes, now.

“A. I’m now on a purely consulting basis for Falstaff.

“Q. And how long have you been on a consulting basis

for Falstaff? ‘

A Two, three months—three months since the first of

year.

154] . Would you tell us when did you join Falstaff?

“A. 1948.

“Q. Would you tell us between 1948 and the period when

Jou became a consulting person for Falstaff what you have

done in the meantime?”

nine months and I was asked to become the advertising

director of Falstaff. Then after about a year I became

Director of Marketing.” ae we EE SAS rst

Page 3. I will read questions 1, 2, 3, 4, 5 and 6, 7, 8, and the

TR Cover: It is my understanding that the witness

went to Falstaff first in 1948 and eventually became Direc-

tor of Marketing. Is that the gist of it?

Mn. Reperro: Yes, your Honor.

Tun Count : Now you are reading where?

Mn. Repetto: Page 3, questions 1 through 8. The last an-

swer was: be |

l Then after about a year I became Director of Market-

nes

“Q, Is that about 19507

“A, Fifty-one, I would say. é

1551 Q. What happened after that?

“A: Well, after that I was the head of the Marketing

Department until 1959 and then was asked to head the

Planning Department and relinquish my activities as mar-

keting director to Mr. Alvin Griesedieck.

. And then from 1959 until approximately two months

ago you have been in the Planning Department?

“A. Correct.

Now, were you the head of the Planning Depart-

ment?

4A. The Planning Department consisted of me.

“Q, And what was your title in that capacity?

“A. Director of planning.

...“Q. Director of planning!

“A. And Vice President.

Did I understand you to mean then that you had no

one working directly under you?

MAL Nos i, ry Jie

“Q. No. To whom did you report?

4A. Mr. Joseph Griesedieck, President.”

bg rae page 4. I will go through questions 1 through

. I should have asked you, Mr. Vollmer, at the outset

if you would just state your name for us and your home

address so we have that. 7 * ee

6 “A. Karl, K-a-r-l, K. Vollmer, V like in Victor, o- l-

a 4931 Lindell Boulevard.

“Me. Fane: Is that St. Louis:

“Tae Wrrxrss: St. Louis.

“Q. Mr. Vollmer, can you tell us whether you are famil-

iar with the term ‘national brewer’?

“A, Certainly,

Would you tell us who are the national brewers in

this country? és

2 BA. Anheuser-Busch, Schlitz, Pabst, Miller's.“

Tue Covrr: He is testifying as of 1967. Is that correct?

Mr. Goria: That is correct, your Honor.

M. Rererro: 153

. Are you familiar with the term ‘regional brewer’?

A. Yes. . 5

ers in this country?

AA. Hamm’s, Carling’s, Coors, Falstaff, n

Tx Covnr: Just a little slower.

A. Hamm’s, Carling’s, Coors, Falstaff, probably Na- -

tional Bohemian.” “

157] I now read from page 47 of Mr. Vollmer's deposi-

tion; questions 5, 6, 7, and 8.

Mn. Gortne: Page what?

5 Mn. eg age 47. 8

. Was—Is the Fort Wayne operation considered by

Falstaff to be a sound part of the Falstaff strueture

“A. Well, we've had to reorient our thinking on that, and

it's been used to a sreat extent as a shipping plant now for

some remote areas that we can’t, that need additional prod-

ucts from our other existing plants, or wherever we run

Short of product there, why, we fill in from Fort Wayne

and, of course, we shipped from there to the southeast, too.

. Tes. 77

. now from Fort Wayne?

3 ge" A, Yes, l

“Q. I was interested in the leasing situation with an ulti-

te buying option which I believe was the means of pur-

shasing the Fort Wayne Plant; is that correct?

A. Tes.“ :

4⁰

Now, if’ 1 ma, I would ‘ike to read trom Joseph Griese

dieck’s [58] deposition, page 19.

Tu Count: Give me that again.

Ma. Rurxrro: Joseph Griesedieck:

T Covrr: How do you sell that?

Mr. Rererro: G-r-i-e-sedieck.

Tun Cover: He is the President of Falstaff!

Mr. Repsrro: He is the President of Falstaff. He has

been referred to already, your Honor.

. ena aes F What

en e ef a area, or do you

believe in from one point to a national market

“A. back in the thirties when we first started,

wo, bee of cus. wask fancial erg e felt that we

2 pets el puis’ poten emia of

Fe ss iets a questions 3 and 4 of

Joseph Griesedieck’s deposition.

“Q; Could Falstaff ship from Fort Wayne to Pennsylva-

iat.

pat T preeume they ü |

Where would you say, sir, that the point would be

reached where it would be non-feasible or unfeasible for

Falstaff to ship from the Fort Wayne plant into the North-

eastern part of the United States?

te veg answer. eee 3 rat we

Department. 8 pretty to generalize on that. We

eee lee ieee of the Fort Wayne, I

can assure you. We might have shipped out of there if we

knew we had potential to acquire capacity at some point

but not just to open a market“.

| would now like to read from page 37, question 2, of Jo-

seph Griesedieck's deposition. a

“Q. What would a new brewer [60] entering the New

England market need in order to acquire an effective

wholesale distribution system

A Well, you'd have to be prepared to offer that whole-

Saler a marketing plan which would convince him that he

“éould sell a sufficient amount of your product to make

money. He’d also have to be available to you, which is the

primary problem, as we see it, in New England. One of two

or several reasons he might not be interested is because

they already have other products; primarily I think he’d be

in in knowing that you were prepared to spend the

kind of money in a marketing operation that will produce

results for him and secondly that he can buy the product at

a price where he would have the proper mark-up to make a

2 pent These are two factors and then, of course, the repu-

“tation of the brand, itself, would be an important factor.”

This, your Honor, is one of the reason that we sought to

introduce the marketing survey done by Dancer, Fitzgerald

to show that Falstaff had brand recognition in a market

“where it was not selling because Mr. Griesedieck does spec-

fe fy that this is one consideration that he must have to

enter a market. Where it is granted that the market [61]

“is not New York, New Jersey, or Connecticut, it is suffi-

“ Gently close to New England and it is of such a nature,

being a market that is important and a market that Fal-

Staff does not sell in, that is what we sought to introduce

that survey for.

I would now like to read from page 80, question 4, and

8 81, questions 1, 2, and 3 of Joseph Griesedieck's depo-

. In the past, has it been Falstaff’s program that since

1955 to enter a market slowly and expand?

. “A. You are referring to a new market?

. f

A. Basically that's correct. ks

„ Generally, what do you do, establish a demand for

your products from the existing plant, then when you build

what demand to a certain level you seek a brewery within

“A. Generally, yes, that’s been our past history,

At the time you acquired Fort Wayne or you ac-

quired the lease * * *” fy he :

Tue Covet: From what page are you reading now, 81?

Mo eee I was continuing, your Honor. This is page

1621 “At the time you acquired Fort Wayne or you ac-

quired the lease on Fort Wayne, I believe you stated that

at that time in that area you had demand for your prod-

uet aff 47 5 9 Z

. Tes, ina general area, not all the market we subse-

quently opened, though.” a |

I would now like to read from page 86, question 2 of Jo-

seph Griesedieck’s deposition. 8 i

. What was the basic reasoning behind the decision to

go into New England as a premium beer? n

_ “A. Primarily the fact that it appeared to us that the

premium priced brands were the ones that were showing

the greatest gains and that we should have that margin

and our distributors needed that margin to develop the

proper degree of distribution. As I pointed out earlier, in

the last several years, this whole pattern changed. The pre-

mium priced beers were showing the greatest gains. It was

obvious to us the public was willing to pay the price. As a

new brand coming into the area, we felt we should ap-

prone it #2 that basis. If we were unsuccessful, we always

the possibility of reducing the price. Once you go in at

a popular price, it’s impossible to raise it. That was the

basic [63] reason behind the decision.”

I would now like to read page 90, question 1 of Joseph

Griesedieck’s deposition.

Was there any discussion at that time of shipping

any of that beer brewed at Fort Wayne into the North-

east?

“A. No, not on any permanent basis. We might have

done it until, as I say, the plant up there was ready to pro-

duce certain packages, but not as a permanent move.”

I would like to now read from supplemental interrogato-

raping en aipemes thereto questions 3 and 4. That is Exhibit

Tae Couat: Exhibit 6; interrogatories 3 and 4 and the

answers thereto... 4

“As to each Prospective distributor file listed in re-

sponse to supplemental interrogatory 3 above, iden- :

„ by name and title, the [64] person or persons

who caused each such file to be established.”

Answers 3 and 4 are grouped together.

Tx Courr: Grouped together?

Mn. Rererro: Yes, your Honor.

TA Court: One answer, you mean?

Mn. Repetto: Yes, your Honor.

however, been in existence for at least 25 years. Specifi-

5 ed as an exhibit the distributor letters for-

5 fendiane ale Government, pursuant to a eid, by the ae

S VVT

Tux Count: Made when? Does it bear any date

Mn. Gonmd: January 1965, your Honor.

Tue Covet: Is that correet!

Mn Gonso; ‘Yes, your Honor.

III. Goarne : I am going to object to these unless there is

some showing of their relevance. They apparently are

letters from people who had some interest in becoming

Tue Cover: I haven't seen the documents. Have you

seen the documents? I haven’t.

Mu. Gonme: I have, yes. The fact that somebody ex-

pressed an interest in distributing the product, standing by

itself, has no significance to me.

Tae Court: T think it might have some relevance on the

question of whether or not there was any demand in the

[66] New England market or any interest shown in the New

England market for the product of the defendant. Is that

your theory?

Mr. Copy: Yes, it is, your Honor.

Tur Court: This ie a file kept in.the regular course of

business of Falstaff?

Mx. 270 Yes, it is, your ‘Honor, according to their in-

ries.

I would take this “opportunity also to reiterate that I

think the brand ‘recognition survey, which your Honor

marked for identification but refused to put in evidence,

Tun Count: Let's forget that. ;

Mr. Copy : —has the same bearing.

Tug Count: Let’s forget that for the moment and direct

ourselves to what we have before us here.

Ma. Cony: Very well. I thinkgthey are very relevant.

They do show an interest in distributing and selling Fal-

staff beer in New England,—

Tue Covet: Am I to understand that—

Mn. Copy : on both parties’ parts.

ty Court: —pursuant to this so-called civil investiga-

tive demand the defendant Falstaff furnished this: informa-

N are offering here?

Mn. Copy: Tes, your Honor. It is Gmälar to a wibpaene.

[67] Tue Cover: Similar to a ‘subpoena. In other words,

the various documents included in this exhibit, or the origi-

50000

MI. Copy: Tes. ean ey Hye

IT Covrr: And were furnished to your department

pursuant to this so-called civil investigative demand. Is

that it? is

Mn. Copy: Yes, sir. en 1

Tun Court: I haven't examined the contents, obviously.

The top letter would seem to indicate it has a bearing on

distribution or sale in the New England area. Suppose you

show them to Mr. Goring if he hasn't seen them. I don't

know how he can object on the ground of relevance if he

hasn’t seen them.

Mn. Gortne: I haye seen those letters.

Tux Cover: You have seen them?

Mx. Gonne: Yes, indeed. They were furnished prior to

the beginning of this suit under an extra- judicial process

which is known as a civil investigative demand, and it is as

Jeompulsory as a subpoena. The fact, however, they were

produced has no bearing on their relevance or their posi-

tion in this case. All they show is an expressed interest on

the part of a heterogeneous bunch of unidentified people in

selling Narragansett beer. i

168] Mn. Copy: I will have to object to that. These peo-

ple are identified. If Mr. Goring wanted to check out their

identification .

Tu Courr: I think your objection, Mr. Goring, goes to

the weight to be given to these documents rather than their

_ admissibility. Your objection to the Court’s ruling is noted.

They may be marked Exhibit 9.

| Mz. Repetto: I would like to point out there are approx-

> imately 30 letters from distributors in the six New Eng-

land states, and as part of that exhibit are the replies

where replies were made to those distributors, which veri-

fies the answer to the interrogatory that these were kept in

the regular course of business and that replies were made

— for approximately 25 years. The relevance of this

fay Court: How far back do these communications ex-

Mn. Reperro: The ones that we have here go back to

1960. They cover the period 1960 through 1965. The rele-

_ ‘vance here is that in the deposition that I read of Mr. Jo-

_Beph Griesedieck one of the factors he pointed out in get-

; ting into a new market, particularly New England, is the

availability of distribution and the need to get distributors.

On the face of these documents it appears that they [68]

were not solicited by Falstaff but were spontaneous inquir-

ies by distributors in the New England market.

Tus Court: I have already ruled they may be marked as

an exhibit. I need no further argument on the area of rele-

vancy. The weight to be given to them is something else. |

(Copies of letters from various distributors in New Eng-

land to. Falstaff Brewing Corporation, and replies by

Falstaff Brewing Corporation, 1960-1965, marked Govern-

ment’s Exhibit No. 99

Mn. Copy: At the expense of belie r your

Honor; I would like to say one more time that if we take

the distributor letters in conjunction with the brand recog-

nition survey; there is a relationship because—

Tue Court: Mr. Cody, how many times do I have to tell

you that the Court has already ruled on the admissibility

of that proffered exhibit? At the proper time if you want

to argue it again, I will listen to you. We are not getting

anywhere, Let’s proceed. When the Court rules, the Court

assumes full responsibility for its ruling.

Mr. Copy: Very well, your Honor.

Mr. Reretro: Continuing further, your Honor, with the

alternative methods that New England possibly could have

been entered in relation to building a brewery in the New

England market, I would first like to read from [70]

Harvey Beffa, Sr.’s —

Tae Court:

Mn. Repetto: Beffa—B-e-f-f-2.

Tu Court: Taken when

Ma. Rererro: Taken April 27, 1967 in St. Louis. I will

first read some introductory material to show Mr. Beffa’s

position with Falstaff. First I would like to read from

page 2, questions 1, 3, and 4; page 3, 1 through 7; and page

4, question 1.

Sir, would you state your full name, please!

“A. Harvey Beffa, Sr.

“Q. Would you state your current employer?

“A. Falstaff Brewing Corporation.

. And your position with Falstaff today?

“A, Executive vice president, chairman of the board.

eee e en

those positions

ae * Executive vice president, 53; chairman of the board

“Q. Could you please state as briefly as possible the

oF ions and responsibilities commensurate with your po-

_ sition as executive vice president!

“A. Yes, sir. The operations report to me, purchasing,

personnel, and research and development.

. As to the research and development department,

[71] is this basically in connection with the brewing?

“A. It’s in connection with the product.

_ “Q. This research and development department would

not deal in any way with marketing or market expansion?

“A. No, sir. < :

. And the operations division, this deals mainly with

the operation of the plants?

“A. That's true, sir.

“Q. Do you recall the date when you first became a mem-

ber of the board of directors?

“A. 1936, I think it was.

“Q. And are you a member of the executive committee?

“A. Tam.

“Q. And do you recall the first year when you became a

member of that committee, approximately ?

2d a have been the late ’40’s, I suspect, somewhere in

ere.”

Tae Court: In the late ’40’s he became a member of what

committee :

Mr. Repetto: The executive committee.

Txe Court: In the late 40˙8.

Mr. Reretro: I would now like to read from page 19,

questions 5 and 6; and page 20, question 3.

[72] „. Is there a particular reason why Falstaff has

never built a brewery?

“A. Falstaff did not necessarily have to build a brewery.

It got its acquisitions, or rather developments by acquisi-

tions. 5

“Q. Beyond the fact that they —the history shows that

their breweries have all been acquired, is there a particular

reason why they could not build a brewery?

* , Mar. Farr: I object to the question. There is nothing to

indicate that Falstaff could not have built a brewery.

Mn. Carr: That's what Im trying to establish,

whether there was any reason why they could not. bros

un Wrewnes : Your question again, please?; .°

-*(Whereapon, the previous question was reed by the re

—

nn Wriunss: Why, I guess they could build anything

‘they wanted to build. Obvieusly, of course, finances and the

RIE eee ee e eee

added up, would be my answer to you. ang FONE

To your knowledge has Falstaff ever been denied

financing!

“A, Not that I know of.” ~

1731 I would now like to read from the . of

Ferd Gutting. The deposition was taken the first day of

May 1967—was taken in St. Louis, Missouri. Again I

would like to read introduetory material showing Mr. Gut-

ting's position. I will read from page 2, question 1; page 3,

88 1 through 9; page 4, question 1; page 55 ques-

tions 3, 4; page S question 1.

. “Q. Sir, would you state your full name, please?

may? Ferd J. Gutting.

. And your current address?

“A. No. 4 Meadow Acres, Laslue, Missouri.

8 ou state, please, your current employer?

Brewing Corporation. |

nat us, please, your position with Falstaff at this

“A. Vice President, planning.”

Te Court: Vice president of —

Mn. Repetto: Planning.

wor er a period of time have you been vice

ent in charge e

2 dar what period of time were vou assistant

. e HAC

Ware eee een, postion with r rag ‘was

we ne a Std IAN

Special project coordimator in the fnance depart-

For how long a period of time did you hold that po-

sition with Falstaff

A. From January 1, 1958 until about a week ago.

n other words, until a week ago your duties as spe-

cial project: coordinator coincided with your job as

“A. Tes.

“Q. During the time when you were specisl project eoor-

dinator, and I believe you said assistant treasurer of

finance—

A. Yes.

“Q. Was it a part of your duties to study possible plant

‘sites for future buildings of plants, or breveries ‘by Fal-

staff? —

“A. Tes.

“Q. Was it also a part of your duties in that capacity to

examine possible plants or breweries that might be ac-

quired by Falstaff? 8

40 A. Ves.“ :

175] I would now like to read from Mr. Gutting’s deposi-

tion, page 36, question 1; page 37, questions 3 and 4; and

page 38, questions 1, 2, and 3.

. Was it planned at the time * * * ”

Te Court: This is page 36, question 1?

Mu. Reretro: Yes, your Honor.

“Was it planned at the time that you mace this projec-

tion that Falstaff beer would be brewed in the Narragan-

sett plant and shipped to existing Falstaff markets? |

. Yes, this was a distinct possibility.

. At the time that you placed this figure of 50,000 bar-

Tels on this sheet, f 3 .

_ «Bam. Court: A little slower, please. I didn’: get that. At

tme time what?

At the time that you placed this figure of 50,000 barrels

on this sheet, had you had any discussions with Falstaff

; 50

management as to the shipping of Falstaff beer brewed at

Narragansett outside the New England area | :

Le. there were such Giseussiéns,

. With whom did you have such discussions?

“A. bah de a T don’t temember specifically but in all

Wembhoerner ‘tas 8 rey ER N mst it ‘ 17

“Q. And what areas were discussed by you with [76]

these other people as to where you would ship Falstaff

brewed in Narragansett plants? 2

other than the possibility that any excess capacity at the

Narragansett plant could be used to supply beer to the

East Coast Falstaff distributors, for example.

“Q. Now, I ask you what does an East Coast distributor

D.C; Virginia; North Carolina. 8

“Q. This is the East Coast as a sales region of Falstaff,

is that true?

ren read f )

would to again rom the deposition of Joseph

Griesedieck, page 84.

M. Reperto : —i-e-s-e-d-i-e-c-k.

Tun Covnr: Page? 5

Mn. Rererro: 84; questions 1, 2, and 3.

8 7 65 bea oa A l oe as to the effective area

to which you co ip from the Narragansett plant?

_ SA. Prior to the acquisition? — |

des, we certainly examined that as to just what

market we could service on Falstaff where we were already

selling, you know, less expensively than out of an existing

other than the

We dete

down tha Falstaff has ä new — —.— pro-

esses; it has expanded the capacities of various breweries

which it acquired; and it has modernized them. Not only

that, but the Government proposes to show at this point

that Falstaff had been advised by experts that building a

brewery was indeed not conjectural but very possible,

Tur d Court: Building a brewery?

Mn. Copy: Yes, your Honor.

Tn Court: A brewery by it, you mean?

{78] Mn. Copy: Les, your Honor.

Tae Court: An additional brewery by it.

Mn. Copy: In this connection we would like to offer in

evidence a report by Arthur D. Little, Inc.

Tue Court: Now you said that the building of an addi-

tional brewery was what again?

Mn. Copy : Not merely conjectural but possible.

TRR Covnr: But possible?

Mr. Copy: Yes, your Honor; according to Arthur D. Lit-

tle, Inc., which is a management consultant firm, which re-

turned a report to Falstaff on or about April 12th—at

least it is dated April 12th—1960, running over 100 pages

We would seek to offer this as Government’s Exhibit 10.

Mr. Gone: No objection.

Tue Covnr: It may be marked Government’s Exhibit 10;

report of Arthur D. Little Compan

ee dee et dt report is that

the building of an additional brewery by Falstaff was not

merely conjectural but rather a possibility? Is that what

you said?

Mn. Copy: Yes, your Honor. If I may read from it.

Mn. Gonmd: I might say that I do not agree with that

fragmentary description of a 118-page report.

Tue Count: It is not too enlightening at best. [79]

Didn't we have some discussion about that report in cham-

rs?

Mn. Gorrne: We did, your Honor.

T Court: ee

what part of it was pertinent for my consideration.

Mn. Gortne: It seems to me at the session we had, at the

: ial conference, there was merely some general de-

_ teription of what this report was about. And I think it was

» exhibited to your Honor merely to show what kind of prob-

the. Government said they had. My recollection was

the Government had:in.mind—although I do not hold

critical ance to them, but it

entire should go in and all

Government's Exhibit 106.

af a of report of Arthur D. Little, Inc. to Falstaff

pice repo ttle, Inc

Corporation, dated April 12, 1960, marked Gov-

ernment's Exhibit No. 10) a

[80] Mz. Copy: Very good. In one area of the report, on

page 107, it is stated:

At is evident that,

Mx. Gonmo: What page, Mr. Cody?

Mn Gon: Thank you. f

Mr. Copy: (Continuing)

deo the brewing facilities recommended for the fu-

ture, none are proposed to be of ‘conventional’. design. The

reason for this\is twofold—to decrease capital-costs and in-

‘erease operating savings in order to increase net earnings

re to increase. the ratio of net earnings to net

worth. 15

Tue Covrt::It is now 12:30. We will stop here and re-

vum at 2:00 Oelo en

Mn. Copy: May I read one more paragraph? f

Irn Cova: I think it would be detter to read it at 2:00

(No RECESS)

181 1 a4rrRNoονν ,“ỹ¶, a;

JFF

to make this part of that exhibit which we had intro-

sed previously.

Tun Covet: ‘Now you are referring to Exhibit No—

MI. Rererro: Exhibit 6, your Honor.

Tum Court: Suppose you show it to Mr, Goring. If he

has no objection, it may be added thereto. —

Mn. Rxrxrro: I would like to read from that last page,

your Honor, of the supplemental interrogatories.

Tur Court: Last page of Exhibit 6—go ahead—supple-

mental interrogatories.

«Ma. Rererro: It is headed “CERTIFICATE.”

J, the undersigned Harry J. Pettey, do hereby cer-

tify that I am Secretary of the Falstaff Brewing Cor-

poration; and that the minutes of the Board of

Directors of the Falstaff Brewing Corporation make

reference to the Arthur D. Little report dated April

15, 1960 as follows::

That is Exhibit 10, your Honor.

Minutes of Meeting Held February 23, 1959

[82] ‘After a brief explanation by Mr. Joseph Griese-

dieck on the reasons for hiring Arthur D. Little, Ine., on

motion duly made, seconded and unanimously carried, it

"RESOLVED, that the firm of consultants of Arthur D.

Ine. be retained for research and consultation, by

e Management of this Company, in the areas of long

range planning and growth.’

Minutes of Meeting Held December 21, 189

Mr. Griesedieck*also informed the Directors that the re-

ort of the D. Little company was expected shortly

“mentioned a few of the recommendations that have

been indicated will be contained in this report.’

Minutes of Meeting Held Jume 27, 1960

Ar. Griesedieck also invited comment of the Directors

with respect to certain goals that had been set for the fu-

ture as the result of the Arthur D. Little report.’

u Wrrxrss Wusrzor I have hereunto set my hand and

‘the seal of said Corporation this 24th wi of en 1967.7

Signed Harry J. Pettey.”

188 IT would now like to read, your Honor, from Exhibit

10, which is the Arthur D. Little study. I read from a page

ee te I:

22 Je gou A

“aye, 8

Tan Count: "Houten ee

Tur G RT 1 of the report.

Ses awe Fam reading the fret paragreph of tht

page.

“Herewith we seh so a report summarizing the results

of combined ‘teamwork by Falstaff Brewing Corporation

the ADI, proposal ‘of Decemh - 17, 1958, In essence, the

ee ee ee as-a request that it study

what actions Falstaff should take to maximize its profit in

the years to come. The conclusions reached as a result of

the team’s study and deliberations may be very briefly

summarized as follows: To improve its position and give

itself maximum assurance. of success in the future, Falstaff

should review and improve its operations in every aspect

of its business.

1840 There follow from that paragraph, your Honor,

nine separately numbered paragraphs outlining the areas

paragraph 3. looked into. I wish now to read from page 2,

i ort . Under present methods of operation, it

is frequen y necessary for beer to be shipped substantial

distances. This is especially true when cross shipment is

required to meet local demands in excess of local capacity.

Furthermore, the area which could be served economically

by efficient brewing plants might be substantially expanded

even to overseas territories—if signifieant reduction

could be achieved in transportation costs. Bulk movement

and the shipment of beer in concentrated form would ap-

peer ce be fields well worthy of attention because of the

at ia] savings which could be achieved by successful

_ “which of these it should be possible for Falstaff to reach

_ ‘successfully with efficient advertising [85]. and selling ef-

fort. It is recommended that in the future Falstaff sell in

major areas of population concentration, where its adver-

Sone and sales effort would be efficiently employed. More-

‘over, it should seek to serve these areas by selling through

branches, where feasible, rather than distributors. Where

distributors are employed, they should be selected as to

sales potential with a view to maximizing profitability.

Sales effort and support should be avoided in areas where

‘sales potential is unlikely to produce significant profitabil-

_ ity. Many of these principles can also be helpfully applied

in areas presently served by Falstaff.” :

On page 3, paragraph 8—it is numbered 8.

“ “Growth and Market Entries.”

Tux Cover: What is that again, please?

“Growth and Market-Entries. An average rate of growth

of 10% a year is proposed, and a series of advances into

‘markets and construction of supporting productive facili-

ties is recommended that is believed to be in Falstaff’s in-

_ ‘terest. As might be expected, during the introductory pe-

riod, while facilities expansions have been made to [86]

“serve markets not yet fully developed, it may not be possi-

ble to achieve the financial margins recommended, but it is

confidently expected that improved profitability will result

‘from the programs suggested.”

: — read from page 5 under the heading “Falstaff Must

Grow.”

This report counsels Falstaff to plan for and to seek

FSrowth. Yet growth is not taken as a desirable objective in

itself. Why, therefore, should Falstaff grow? It is believed

_ ‘that growth offers Falstaff several ‘advantages which make

expanded size desirable. To achieve these benefits will re.

_ Quire expanded operation. Among the reasons for seeking

: growth are the following:

4 Falstaff makes its most attractive return from mar-

_ kets which it penetrates to a substantial degree. Other

- things being equal, Falstaff should therefore seek greater

enetration in the areas that it now serves and where its

ereentage of the market is less than 10 percent. To do 80

of-the:conntry, the: northeast quarter-of the. United. States,

three-quarters. of:the beer sold in the coun-

obtain the higher returns. now ienced by Falstaff in

New Orleans, San Jose and St. Louis. This will require

growth in both productive and sales organization. a

8. Inoreased penetration in both its existing and ne

{88}. “2. Falstaff seeks national—and perhaps interna-

tional— distribution in order to achieve such geographie

e ee volume of operation as will permit the exploita-

of favorable profit opportunities wherever they exist

and will provide maximum security against seasonal and

Paige 10 tinder s hesding called “The Falstaff Market.”

Ae few paragraphs, beginning at the top of page

TTT

in numbers in the beer drinking ages, will in time afford a

larger market. This is so despite the down-trend in per

eapita beer drinking, which is so slight that with popula-

tion growth the industry can look forward to increased

sales. However, as stated before, Falstaff’s sales increases

since 1945 have shown that the company can capture in-

greased shares of the existing market even in a period of

no market growth. Falstaff’s own prediction suggests that

its sales will nearly double in its present markets by 1975.

However, as stated before, Falstaff does not now serve the

greater part of the major beer markets of the central and

northeastern U.S. Sevanty-three percent of the beer con-

sumed in the U.S. is drunk in these regions. Moreover,

eighty percent of consumption in these areas takes place in

_ Nith the information always in the order shown in the leg-

* 68

191] Page 14 under à heading “Order of Sales Expansion.”

“From what has been said with respect to future mar-

kets, it is evident that Falstaff’s sales effort should be

planned to-achieve deeper penetration of existing markets

and also to reach into the new areas of concentration of

population. In general, greater penetration of existing

markets is needed where penetration is less than 10 per-

cent, to improve the profitability of sales in those areas.

Falstaff must reach the centers of population

that it does not now serve. Not to do so would be to omit

too large a portion of the total market. Moreover, the con-

centrated market groupings proposed should permit

efficient ‘selling and distribution, with resulting higher

Experience has shown that Falstaff secures easier

entry into a market if the new territory is contiguous to

areas where Falstaff is already sold. Presumably this

comes about from spill-over of advertising effect and by

word of mouth reputation. Likewise, advertising and sales

effort devoted ti contiguous new territory can be expected

to have beneficial effects in the existing adjacent Falstaff

markets. In order to have these benefits both in new areas

and in existing territory, it is suggested [92] that Falstaff

in the next six years should extend its sales coverage basi-

cally in the following order:

4. Intensify marketing effort in its present areas where

— is below a level of satisfactory profitability

2. Investigate and correct the California loss operation,

starting immediately. .

“3. Enter Detroit in the spring of 1961.

“4, Enter Chicago in the spring of 1962.

5. Enter the East Coast and Southeast Florida areas in

the spring of 1965. © FL

“In entering new areas, Falstaff have the oppor-

to decide whether to do so ough branch opera-

tions or through distributorships. Falstaff’s experience has

indicated that its sales are most profitable where they

are made through Falstaff branches, The profitability of

branches in larger centers of population is especially no-

ticeahle Whether this is due to more efficient selling or ad-

vertising effort, the price differential to Falstaff from

branch sales, or the reduction in transportation costs with

shorter delivery distances must be investigated further. It

_, suggests, however, that Falstaff should arrange to sell to

the new concentrations of population through branch [93]

operations supported. by production or packaging plants

convenient to them. As will be noted below, it is proposed

that in some instances, if justified as the result of more de-

_ tailed analysis, service to a major market drea can be

begun by means of a local packaging plant prior to or inde-

_ pendent of the establishment of a productive plant in that

area.”

Page 16 under a heading, “Table of Plants and Schedule.”

4. Expand Galveston production by adding brewing fa-

cilities to produce at an annual rate of 1 million barrels.

This addition to Falstaff capacity should come into produe-

tion in early 1961. 1

2. Build a new plant in Southern Galifornia and an-

other in Michigan at or near Detroit, both to come into

produetion in early 1963. These plants are to be sized for

500,000 barrel annual output on one-shift operation. How-

ever, if current figures show more capaeity is needed by

the time construction starts, make the necessary capital ad-

“ditions to operate the same plants on additional shifts.

“On the basis of engineering analysis and actual experi-

mental data, determine if Detroit should be tripled in size

and Fort Wayne vacated instead of modernized.

“3. Start construction of an East Coast plant— [94]

Probably near Baltimore—sized like those in southern Cali-

fornia and Detroit, to come into production early in 1965.

Vote that, except under special circumstances, all of the

. facilities proposed are new rather than rehabilitated old

_ breweries. The reasons for this suggestion are discussed in

Part ITI in the section referred to above.”

I vil now read from pages 107 and 108 under the heading

8 ding vs Buying Facilities.” ,

“It is evident that, of the brewing facilities recom-

. mended for the future, none are proposed to be of ‘conven-

tiohaP design. The reason for this is twofold--to decrease

capital costs and inerense 0 rating savings in order to in-

crease et Garnen Per ves d to increase the ratio’ of net’

earnings to net worth. a

Taking “past Galvecton history os sn exeunple it ta der

that by the time original purchase price, cost of bottle hop

replacement and cost of originally contemplated conven-

tional brewing addition were combined, a total of approxi-

mately 14 million dollars would result. All of this equip-

ment would have to be fitted into existing space thought

suitable years ago when Southern Select aequired its prop-

erty. 95) The net production capacity would have been

about 1.2 million barrels annually.

“In contrast, a complete brewery with facilities of the

newly proposed design and an annual 1-shift brewing out-

put of 1 million barrels is estimated to cost 16 million dol-

lars. It would incorporate lahor-saving possibilities esti-

mated to be worth about $400,000 annually. It would be

built on new ground, allowing space for a good, industri-

ally engineered lavont. A plant of lesser brewing capacity

—for example, 500,000 barrels per vear on a 1-shift basis

would cost $10,500,000. The same plant to work three

shifts and produce 114 million barrels could be built for

approximately 18.5 million dollars.

“There appears to be ample reason, based on these esti-

mates, for building rather than buying. Thus, we conclude

that major new market entrances need not be predicated

on the availability of a brewery Falstaff could purchase.

This, in turn, allows better control of marketing strategy

and timing, and eliminates worries of adverse Governmen-

tal anti-trust action. While operating cost savings have

been mentioned, it also seems likely that the fastest way

to achieve markedly reduced labor usage [96] is to build

new breweries of new design, particularly where manning

requirements have not been established by precedent.

“In spite of all the seemingly apperent advantages of

building vs buying and renovating, this report cannot cate-

ee recommend © seyhe build, ate buy.“ Under

ce reumstances, existing facilities may still

prove to be beneficial; but such situations will likely be the

exception in the future rather than the rule they have been

in’ the: past; since in any event the plants bond be suff

ciently modified to achieve low-cost production.”

M Honor. For introductory mate-

rial T would like to read from page 2, questions 1, 2, 3, and

4j and page 4, questions 1, 2, 3, and 4.

ho Sir, would you state your full name, please?

17 “A. Alvin Griesedieck, Jr.

And your home address? :

“A. 19 Squires Lane.

“Q. Is that in St. Louis?

“A. St. Louis 31, Missouri.

Are you currently employed by Falstaff i

“A. Yes, sir.”

In addition, I will read page 3, 1 through &

Tu Courr: Page what?

Mn. Rurerro. Page 3, 1 through 8. I haven't gotten yet to

page 4, your Honor.

“Q. What is your present position with Falstaff?

“A. Director of marketing, vice president, director of

2 0. For how long a period of time have you held that

ion?

. About eight years.

“Q. Would that be approximately 1960 that you first be-

came director of marketing?

believe it was 61, seven years.

_ “Q. Did you replace Mr. Vollmer as the director of mar-

keting?

. Yes, sir. /

3 At the time you became director of marketing was

At the time that Mr. Vollmer mov | over [98] into his

‘Mpacity as vice president of planning? .

A Yes.

“Q. Prior to being vice president, director of marketing

what was your position with Falstaff?

4A. Advertising manager.

„. In your capacity as marketing director, which would’

en report to you?

“A. Well, in the first few years he was not the—he didn’t

report directly to me because he was not the general sales

manager. We have had a number of title changes. Mr.

Bruce Wightman was the general sales manager at that

time, and he reported to me and Mr. Dependahl reported to

him.

. Did there come a time when Mr. Dependahl reported

directly to you?

“A. Yes. That took place probably in, oh, I would guess

it was about 63 that Mr: Wightman retired and he has re-

ported to me [ 99] since that time.”

Now I would like to read from page 37, questions 2

through 5; page 38, 1 through 6; page 39, 4 and 5; and

page 41.

“Q. Sir, I show you Plaintiff's Exhibit 53 and ask

whether or not you have seen that previously?

„A. Yes, Ihave. | :

. Are you familiar with that report, sir?

“A. Not—in the past I was quite familiar with it. I

ey have to say, you know, I have not looked at it re-

cently.

„. Do you recall when the last time was that you saw

thik reort?: jai! U6er e rats Divot te

“A. My recollection would be several years ago.

„. Was this report discussed by you with any other

management people in Falstaff? (9 98

“A. Tes. .

„. With whom would you have discussed this; with

. Mr. Vollmer, Mr. Griesedieck.

„. Mr. Griesedieck, you mean Joseph Griesedieck ?

“A. Joseph Griesedieck. / idee

Were you the director of marketing at the time this

study was submitted by Arthur D. Little?

“A, I believe I was just, had become the director of Mar-

keting at the time this was completed.

100 . Was the information compiled in this study

used by you in connection with entry into the markets of

Detroit and Chicago?

“A. It had an influence on the decision.

„Tou say influence, you mean that—what do you

mean by it had an influence?

“A. Well, I believe one of the points brought out in this

study is the need for Falstaff to expand into the metropoli-

tan markets, you know, of the country. This, of course,

us to feel that we had to, you know, start moving

in that direction.

. Sir, do you recall the year when Falstaff entered the

Detroit market?

“A. III take a guess at about the year 1960.

.Was that at a time when you were director of mar-

ing that they entered Detroit?

“A. I’m not positive on that, whether I'd be—

. I show you Plaintiff's Exhibit 53 and again direct

your attention to page 14, particularly under the caption of

‘Order of Sales Expansion’ subparagraph 3, No. 3, and re-

lating to the entry into the Detroit market. You see that

statement, sir?”

Tue Court: In other words, am I to understand the

1101] Little report has been marked somewhere along the

line as Exhibit 531

Mn. Rererro: Yes, your Honor; as Exhibit 10 in this

case. It is Exhibit 53 for purposes of deposition.

Mr. Gorrne: It is now in the record as Exhibit 10.

Tun Court: I understand that. But when he referred to

Exhibit 53 it wasn’t clear to me he meant also Exhibit 10.

But that is what you are referring to.

Mn. Repetto: |

I show you Plaintiff’s Exhibit 53 and again direct

your attention to page 14, particularly under the caption of

‘Order of Sales Expansion’ subparagraph 3, No. 3, and re-

‘lating to the entry into the Detroit market. You see that

statement, sir? ;

A Yes.

Was that instrumental e aarp emeesin enter the

Detroit market in 19617

MX. Farr: I object to the question on the ground it's al.

ready been asked and answered.

“A. I believe I have already stated that certainly, you

know, this had an influence on our decision to enter De-

troit.

“Q. Was there a decision within e narben division

of Falstaff in which you were involved [102] to follow the

plan as put forward by Arthur D. ee een ene mma

which you have now before you!

A. Would you let me have that again, please?

“( Whereupon, the previous question was read by the re-

porter)

“Tre Wrrness: We were guided by the study but I don’t

believe that we ever considered it a Bible that we, you

know, had to follow as a time-table.”

I would now like to read from Exhibit 3(c) which ig the

1961 annual report of Falstaff. 2

TRA Court: That would be 1961, would it?

Mz. Reperro: Yes, your Honor. Page 4, under a heading

“Sales hit an all-time high.”

The sales department, through its branch and distribu-

tor organizations, brought to the public an all-time record

quantity of 5,128,048 barrels of Falstaff in 1961. This vol-

ume, which amounts to more than 70 million cases of twen-

ty-four 12 oz. bottles or cans, was achieved not only

through additional sales in many of Falstaff’s established

markets, but also through the opening of entire new terri-

tories where Falstaff became avaliable for the first time.

Key market expansions included [103] the metropolitan

areas of Detroit and Toledo and additional high volume

markets on the East Coast of Florida as far south as Cape

Canaveral.***”

The paragraph goes on, your ema:

. I vie Fas osha} offer into evidence 12 press release

rom alstaff Brewing Corporation, Public Relations

Department, October 10, 1963.

og Goxina: Welt vou give me the number of the docu-

men ,

(A pause) 5

Mn. Reverro: No. 16.

Tn Court: Government’s Exhibit 11.

(Copy of press release from Falstaff Brewing Corpora-

tion, October 10, 1963, marked Government’s Exhibit No.

11)

Tus Cobnr: Press release dated October 10, 19632

T Crzrx : Yes, your Honor.

Ses Reretro: I start out with the first paragraph, your

onor.

Falstaff Brewing Corporation has opened additional

markets in the Chicago area, it was announced today by

Charles W. Dependahl, general sales manager.

~*Dependah! said that Monte Merkel, formerly division

‘sales manager for southern California, [104] has moved to

Chicago on special assignment to work with five newly ap-

pointed distributors. Merkel is no stranger to the Windy

ity, as he formerly played offensive guard with the Chi-

cago Bears during the 1942-43 seasons.

3 ting on the move, Dependahl said, This is an-

other step toward our ultimate goal to make Falstaff avail-

able to beer consumers all over America. Expansion into

‘Chicago is another planned move in that direction.

An Chicago, Falstaff will be priced competitively with

other nationally advertised brands,’ he added, ‘and with

this move, our distribution now blankets the state of Illi-

nois.’ In addition to the city of Chicago, the new distribu-

_ tors will serve beer retailers in Cook, DuPage and Lake

Counties.”

There is another paragraph which I will not read.

Would you excuse us one minute, your Honor?

eye (A pause)

Mz. Rererro: Your Honor, in referring to a further al-

ternative, shipping into New England,—

Tx Covnr: Referring what, please?

MI. Rererro:—To another alternative, to shipping [105]

into New. England, reference to an opportunity to buy

an existing brewery in New England, a small brewery that

Vas not the leading brewer in this particular market,—

Tm Count: What about it?:

Mn. ‘Rererro: ‘A would like to read intorrogetory 1. This

is Exhibit 2, question 1. The question is

“Name each brewing company acquired by Falstaff since

1933 %

Tun Count: Name what, please?

Mn. Repetto:

“Name each brewing company acquired by Falstaff since

1933, excluding the meme Beewing Company, and

as to each state:

“the date of the eee the consideration paid and

the geographical location of the acquired facilities.”

Tus. Cover: And the date again was what, the acquisi-

tion date?

Mn. Rarxrro: “Acquired by Falstaff since 1933,” listing

“the date of the acquisition, the consideration paid and

the geographical location of the acquired facilities.

“the capacity, in barrels, of the acquired facilities at the

time of the acquisition. -

[106] “the geographical area in which the beer of the ac-

quired brewery was sold at the time of the acquisition.

“whether the acquired facilities were remodeled by-Fal-

staff.so as to increase its capacity and, if so, the date or

dates thereof, the amount in barrels of the increased capac-

ee and the cost thereof.

geographical area which was served from such ac-

aired facilities, whether so remodeled or not, as of Janu-

ary, 1965.

the amount of beer produced at such acquired facilities,

whether so remodeled or not, during the year 1964, and the

capacity of such facilities.”

I am wonderi now, your Honor, as I look at it, it is

about six pages of reading for the point that they acquired

PAARL their history small breweries and expanded

them. Do you wish that I read through the six pages to

make that point or is the reference to the point enough?

‘Te Covrr: I don’t think it would be an unjust imposi-

tion on the Court’s time if you were to read it. Certainly f

is not a situation where you are reading a lengthy depos

tion. If you are relying on anything in it, [107 1 think

you ought to read it It should. be a port af the record here.

We don’t want the record incomplete.

Ma. Rzrerro ; I will read it in that ease. Answer: “1. (a)

through (f)—The information ealled for by the first inter-

-@ogatory regarding acquisitions of Falstaff Brewing Cor-

‘poration was given in detail to the United States Depart-

ment of Justice in connection with most of such

\aequisitions and is the possession of the plaintiff.”

72 Mn. Gonne: Excuse me just a minute. This, I take it,

should be read for your Honor’s benefit but we can supply

the court reporter with the full text of this tomorrow. It

would save time and suit your Honor’s thinking.

Tux Court: I don’t think it is going to take so long. I

: like to hear it. Go ahead. Let’s see what it is all

about. . ö

Mn. Rererro: f

» “The present Falstaff Brewing Corporation, as a busi-

ness entity, was formed immediately prior to the advent of

national prohibition in 1920. During the ensuing 12 years,

business activities consisted of the production of soft

drinks and hams and bacons at a plant on Forest Park

Boulevard, formerly used as a [108] brewery. It was not

until 1933, when prohibition was repealed, that Falstaff en-

_ tered the brewing business with its product, Falstaff beer.

Its plant had a capacity of about 100,000 barrels per year.

In 1934 an idle brewery in St. Louis, formerly operated by

Otto Stifel Union Brewing Company, was leased and used

to produce Falstaff beer. This brewery had an annual ca-

‘pacity of about 250,000 barrels. It was purchased for

$600,000 in 1944. The capacity of this plant was not sub-

‘stantially increased from the time it was leased until its

operation was discontinued in 1952. The principal market

for these two breweries was comprised of Missouri, south-

ern Illinois and Arkansas though some sales were made in

the territory beyond this natural market area.

In 1935 Falstaff acquired the Krug Brewery in Omaha,

‘Nebraska, pursuant to a plan of reorganization approved

by the United States District Court in proceedings under

‘then Section 7B of the Bankruptcy Act. The cost was ap-

‘proximately $430,000. This facility was used to produce

Falstaff beer, which was sold principally in the surround-

ing market area, consisting of Nebraska, [109] Colorado,

Kansas and Iowa. At the time of the acquisition, the Omaha

brewing facility had an annual capacity of about 150,000

barrels. In 1941, capacity of this plant was increased by

‘approximately 350,000 barrels through the expenditure of

about $1,000,000 in remodeling. In 1947, through an addi-

ee ta pr

ye 1014 N N N

at Increase in Coat of

Date 2 ae Capacity Remodeling

1937 10,000 barrels $ 200,000.00

19053 aa ene dane nde

tacky, a nd part of Tennessee. In conjunction with the plant

at Fort ayne, Indiana, the New Orleans facility supplies

Falstaff beer to markets in Georgia and South Carolina.

During 1964, the New Orleans plant produced 1,007,967

Ohio. Subsequently,

eastern States of

5 a ryland, Virginia, West Virginia, Florida, and Washing-

ai “In 1956, Falstaff acquired the brewing facilities of Gal-

gyeston-Hoyston Breweries, Ine. at Galveston, Texas for

1.271.771. The capacity of this brewery was 400,000 bar-

els. In 1958, remodeling was undertaken at a cost of

493,390,000, "which increased the annual capacity 200,000

», barrels 7 77 1961, additional ceri was undertaken at

48, cost of $7,000,000, resulting in [113] an increased capac-

4 iy of 600,000 barrels. The principal market served by this

facility is Texas. Initially, following acquisition, it served

en that part of the Texas market in the general vicinity

‘$f Galveston and Houston. In 1964, 1,190,927 barrels of

alstaff beer were produced. The brewery's capacity is

1.200.000

70 .

1956, Falstaff acquired: the brewery of Mitchell

ing Company at Kl Paso, Texas for $1,500,000: Its ca-

The market served by this brewery. is principally western

Texas, Arizona and New Mexico. This is substantially the

same market supplied at the time of acquisition. — |»

An 1957, aff acquired: by merger (resulting in the

of Falstaff and this has remained substantially unchanged.

Shortly following this acquisition, Falstaff's original plant

on Forest Park Boulevard in St. Louis was dismantled and

the real estate sold.

.“The information set forth above is approximate. It is

impossible to give precise delineation of those marketing

areas into which Falstaff beer produced at each plant is

shipped because this is constantly changing to some degree

and because more than one of the breweries supply the

same states or parts thereof, Further difficulty is encoun-

tered in defining markets precisely, because of the neces-

sity, in periods of peak demand, to make cross shipments

to even out supply. Generally speaking, however, the geo-

graphical boundaries given comprise the principal market

for each plantTL

Tour Honor, I think I will bow out at this point and

{115] let Mr. Sagat continue. 5

Tue Courr: The Court has no objection.

Mn. Saat: Your Honor, pursuing the point further that

Falstaff might have entered New England by buying a

brewery, I would like to read the interrogatory and the an-

twer to interrogatory No. 10ol =»

Tux Counts Interrogatory No. 10% Exhibit No. what? Is

this the original or supplemental 7 a 33

I. Saar: These are from the original.

Mn. Reperro: Exhibit 2, your Honor.

Mn. Sacar: Interrogatory No. 10 reads:

List and identify the brewing companies which sought

to sell or indicated an interest in selling its facilities to

Tollowing are brewing panies which sought to sell

or indicated a serious interest in selling their facilities to

Goebel Brewing Company”

{116] Tux Cover: What is that again?

MA. Sagar: dn

Goebel Brewing Company

heck Brewing Company.?“

Would your Honor like me to spell these names for

accuracy : Drewrys— D. r. e- w- r. -s; Stegmaier Brewing

Company—S-t-e-g-m-a-i-e-r; Goebel Bréwing Company—

G-0-e-b-e-l; Glueck Brewing Company—G-]-u-e-c-k.

The answer to this interrogatory continues further:

“Over the past fifteen years a number of inquiries

have been received from or on behalf of small brewers

to determine whether Falstaff had an interest in ac-

Auiring them or their assets. Falstaff had no interest.

It is not believed that these inquiries could, of them-

“selves, be considered to manifest a serious interest in

selling their facilities to Falstaff.”

I would now like to introduce into evidence as an exhibit

the cross-examination testimony of Joseph Griesedieck in

- United States v. Pabst Brewing Company.

I Court: When was this deposition taken?

Mn. Saar: This is not a deposition. This is the cross-

‘amination testimony of Joseph Griesedieck in the case of

nited States of America v. Pabst Brewing Company.

£117] Ma. Gore: I will object to that on the theory that

at can properly come in if and when Mr. Griesedieck

dees the stand. It is certainly not a piece of evidence gen-

“ay

‘erally regarded as proper evidence in chief in the case, tak.

ing a hunk out of some entirely unrelated causes.

MI. Copy: Mr. Griesedieck testified—'° atk,

‘ant Falstaff, testified in a Section 7 case nis F

Tun Covrr: You mean in some other proceeding

M. Copy: Tes your Honor. He testified at that trial

during a Section 7 ease and he made certain statements re-

lating to not that particular trial or the issues involved

what Falstaff had done in the past. What,

and when he testifies in this case, if he testifies

to that—what you have in mind—you may cross-

eon pat oe, 8 testimon He the contrary that

M int) this case up to now ing to

come from this individual? balan

Mn. Copy : Not that I know of, your Honor.

11181 Tae Cour: Wait until there is if you want to

show inconsistencies, if that is the only point.

Ma. Copy: Very well. I will bow to the Court’s ruling. I

dan t see what the problem is. |

Tum, Court: I can’t see the admissibility of it because

some individual, concerning whom no statement has been

mene i this case, made some allegedly inconsistent state-

ment

Mz. Copy: We don’t allege them to, first of all,—the in-

255 Tun Cor: I don't tee" how any testimony in a case

against Pabst has anything to do in this proceeding at the

IT Court: What has that got to do with the merits of

Mr. Copy: Eventually— 15 1

~Tagansett mpany was failing, so far as 3

[119] ‘What was done in the past doesn’t necessarily gov-

‘ern what was done in this instance.

MI. Copy: No, of course not. But eventually I think the

Government will say that there were breweries similar to

those previously acquired by Falstaff in other portions of

the country available and serving this portion of the coun-

try; so, therefore, it was not necessary to acquire No. 1.

“Te Court: I will sustain the objection. Let's get along.

MX. Saar: I would now like to read from the deposition

of Joseph Griesedieck at page 114. }

Tux Covrr: Joseph

e I

4% nr: Would you mind spelling it again? I seem to

have difficulty—

Mn. Sacar: Certainly. It is G-r-i-e-s-e-d-i-e-c-k.

Tux Covrr: Taken when, please? ;

Mn. Saqar: It was taken on April 26, 1967.

Tun Court: April 26, 1967.

Mn. Sacar: I will read from page 114; questions 2, 3, 4,

5, and 6. .

“Q. Did Falstaff ever consider acquiring a brewery of

the size of Dawson, are you familiar with that

11201 “A. Yes, Dawson was offered to us. We didn't

have the slightest interest.

“Q. You didn’t look into it at all?

“A. No, I knew with the size of it, it was much too small.

The size of Dawson is what? |

A. 150,000, 200,000 barrels, I’m not sure, but it’s a very

‘small plant. e

. Was there ever any examination made of the Daw-

A. No. N

. Did they contact you?

A. Yes. The president of the brewery contacted me at

ee tr trade meetings. Lhave forgotten when.”

At this point I would like to refer the Court to—

Tre: Covar: Have you read all you intended to read

from the deposition of this witness?

Mn. Sacar: Excuse me.

Tun Cover: Fr

to read with respect to questions 2, 3, 4, 5, and 61

Mr. Saar: Yes, I have in regard to those questions; yes.

Tue Couur: Very well. Now what do you want to read!

M. Star: What I would like to do at this point is

121] refer the Court to the stipulation, which is Exhibit 1,

partictlarly to. paragraphs — I would like to

read these to the Court especially because the names of

small bréwers which sell in New England appear in those

paragraphs.

Tue Court: Is: this the stipulation as to the line of com-

merce in which Falstaff was engaged

Mr. Sacat: That is one paragraph of the stipulation, yes.

Tue Court: Very well; same stipulation, Go ahead.

Mr. Sagat: 8:

“In 1965, the following brewers, among others, operated

breweries with the capacities and ‘at the locations set forth

below and sold beer produced at these breweries in areas

of New England and in areas of the State of New York.”

At this point in paragraph 8 there is a list of brewers and

their locations. with the normal annual productive capacity

in terms of 31-gallon barrels of each of the listed brewers.

I will indicate these.

11221 Standard

iter Rochester,

Brewing Co., Inc. New York 500,000 barrels

The West End Utica, 800,000 barrels.”

Brewing Co., Inc., New York

Paragraph 9 reads as follows:

“In the following: brewers, among others, operated

LE eter emer

beer produced at these breweries in areas

of the State of New York.

uffalo,

Breweries, 1 New York”

no listing for normal annual productive capacity. Then

“The William Simon Buffalo,

; New York 250, 000 barrels

Dunki

New York 105,000 barrels

Paragraph 10 reads as follows:

An 1965, the following brewers, among others, operated

breweries with the iti

5 Tour Honor, could we please have a minute?

Tx Court: Go ahead. Take it.

. ae

came a ee a

Mu. Sacar: Your Honor, pursuing the same point,

Astaff might have entered New England by buying a

—— h fe Bind Eaten en er.

pg - Are you through reading from, paragraph

10 of the stipulation / Arete

Mn. Sacar: Tes, I am.

Tx Court: Now you want to do what 7

Mu Sagar: I would like ta read from the deposition of

Joseph Griesedieck, first at page— at

Tre Court: Joseph whot Neo

M. Sacar: Griesedieck:

Tus Court: —

Mn. Sacat: Same gentleman.

1124] Tue Covnr: Go ahead. That is the deposition a

April 26, 1967

Mn. Sagat: N Thin te at‘ page 232, questions 3 & 4;

page 233, questions 1, 2 8, 4 end 5; page 234, question 1.

Tue Court: Very well.

MI. Sagar: First from page 232, questions 3 and 4:

“Q. During the period, I'll preface three or tour ques-

tions with the same period, during the period 1960 to 1965,

January of 65, did Falstaff have any negotiations with the

FTC

A. We discussed potential possibilities or advantages

‘of u merger with Genesee at some point. I don’t remember

when the dates were.

eee

to the possibility of an acquisition? :

“A. Not to a great degree. We visited their plant. They

came and visited us. We had I think one discussion in Mr.

MeClellan’s home, and it was pretty nn telt we sang

eauldn t get together and that was it.“

Tu Corr: Was the time fixed for this entern a

Mr. McClellan’s home?

. Mn. Sacat: I believe Mr. Grlesedleck state, 1

don't remember when the dates were.“ That is on 7 —

e same

ö FFFFFFFF C.

e ene des di an instance where’ ‘iby ‘odntletea

yout

4 Trede Wen v n ge e sti}

arr Very cursory by myself only; ~~ Meeks

. Any examination or inspection made as to their dis-

A. Not to any degree, no. sini wees

“Q. When you say the difficulty was price, are you say-

ing that they wanted more than you were willing to pay?

“A. That’s right.”

Page 234, question No. 1. ee

“Q. Do you recall the capacity of the brewery?

& Not exactly, it was a little over a million barrels, I

think \ int

Te Cover: I think, gentlemen, we will take a short

[126] recess at this point.

. (Recess)

III. Sagar: I would like to read now from the deposition

of Alvin Griesedieck at page 23, questions 3, 4, and ö; and

IT Court: The various depositions that have been re-

page 24, question No.2:

. With whom did you discuss the 3 Brew-

ing Company?

A. Joseph Griesedieck.

And what was the substance of that discussion?

“A. You mentioned at this time, namely 1962, Tm not—

“Q. That's true.

“A. I don’t recall, you know, the year or years at which I

had any discussions but whatever period of time it was

that he, I think, visited the Genesee Brewery, you know, we

had e:discnssion relative to this being a potential acquisi-.

tion, and these were—this is what was discussed.

. Was any investigation or study made of the Genesee

rewing Company under your supervision?

. J don't think we ever really made any marketing

studies specifically such as this study here.

“Q: Sir, I show you Plaintiff's Exhibit No. 12 and ask

you whether or not you have seen that previously? 0

A. No, I don't recall ever seeing this.“

Tue Cour: Plaintiff’s Exhibit 12—what was that?

Mn. Sagar: That is what I was checking for. Suppose I

withdraw that statement for the meantime. ..

I now would like to read from the deposition of [128

nner. 1967. Page 44,

questions 1, 2, 3, 4, 5, 6, and 7.

Question No. 1:

“Was anyone else at Falstaff during the period 1963 to

1965 conducting investigations or analyses of plants in the

East or New England, by plants I mean brewers?

“A. PPP

cussing :

“A. No. Mr. Vollmer, of course, was involved in some of

the studies,

“Q. Were you ever requested to visit and examine the

Dawson Brewery in Massachusetts?

“A. No.

“Q. Were you ever requested to visit the Diamond

Ca a: No. e Ee *

Were you over requested to vist the Hall Brewery

—

A. No.

Nee you ever requested to visit the Genesee Brew-

ery in Upstate New York?

“A. No.

. Were you ever requested to visit the Utica Brewery

[129] in Upstate New York?

A. No.”

Now on page 45, question 1:

. Were you ever requested to visit the Ruppert Brew-

ery in New York City?

“A. No.”

At this point the Government will introduce evidence to

show that Falstaff needed and desired entry into New Eng-

land. The Government will first establish that Falstaff de-

sired to achieve for itself nationwide distribution of its

beer.

I I would like to introduce into evidence a press release

dated June 4,1961— —

THe Court: Press release, June 4, 1961.

Mn. Sacat:—as Exhibit 12.

Mr. Gontwo: Will you give me the number of the docu-

ment

T xx Covnr: Is there any objection, Mr. Goring?

Mn. Gorrne: I just want to locate the documents, and I

can’t locate them well by those exhibit numbers. But Mr.

Repetto can help me.

Tue Court: Government’s Exhibit 12.

(Falstaff Brewing Corporation press release, June 4,

1961, marked Government’s Exhibit No. 12)

Mn. Saear: In this press release there is a reference

[130] to a statement by Harvey Beffa, who is described as

Executive Vice President and General Manager.

Tue Court: Executive Vice President and General Man-

ager.

Mn. Sagat: And I will quote from this press release. In

referring to Beffa it says:

“He added: ‘Our goal is to make Falstaff beer available

to the public throughout America. This current expansion

is another planned step in that direction.’ ”

‘Tue Cover: He was referring to what?

Mn. Sagar: He was referring to the naming of ten new

as part of an expansion program in Falstaff’s

}

eee eee eee eee

D. eber,

N Covnr: — booklet. or. n issued —

6 Me ese it is issued seasonally. if I

_ “Copy of Summer 1961 edition of “The Falstaff Shield”

marked Government's Exhibit No. 13)

Mr. Sacar: There is a statement in the section called

“New Frontiers for Falstaff” which reads as follows:

bus it is that, although our goal is eventual national

distribution, each move into new territory will be preceded

by long months of careful research and planning.”

: 0 ee ee Sy eee 1961 edi-

tion of “The Falstaff Shiel a

Tu Cobnr; Nun be marked Exhibit 14

(Copy of Fall 1961 edition of “The Falstaff Shield”

marked Government's Exhibit No. 14)

‘Ma’ Sadars In u Section of this edition of “The Falstaff

Shiela” there is a section entitled “Another Giant Stride.”

And under that there is a statement which says:

- “Falstaff took another giant stride toward national dis-

ee ee ene menos memes Jane 5.”

the Falstaff Brewing Company dated February 16, 1962,

la! er een It may be marked derer nente i

southern: Florida, quotes Alvin Griesedieek, Jr., who is de-

eee e FFECCCC CC

saying

At is * step bowürd e tende geal tins A0

Falstaff available to Deer convamers all over America. This

current expansion is another planned step in that direc-

tion. Our distribution now blankets the state of Florida.“

I would like to introduce as Exhibit 16 the March-April

1962 edition of “The Falstaff Shield.”

Tae Court: Government’s Exhibit 15.

(Copy of March-April edition of “The Falstaff Shield”

marked Government's Exhibit No. 16)

MI. Sagat: This edition of The Falstaff Shield” refers

to Falstaff having opened up new markets in the South-

east. There is a statement in it which reads as follows:

% We are confident that the investment will prove to

be a sound one that will bring [133] us another step closer

to our ultimate goal of national distribution.

I would like to introduce a press release dated—excuse

me a minute, please. I would like to refer to Exhibit 11,

which is a press release dated October 16, 1963. In this re-

lease there is a statement by Charles W. Dependahl who is

described as General Sales Manager. Dependahl said:

This is another step toward our ultimate goal to make

Falstaff available to beer consumers all over America, Ex-

passion: into: Chinage: is: another’ planned: move in, thet

direction.“

I would now like to introduce as Exhibit 17 the state-

ment of Joseph Griesedieck, called “Brewing’s Bright Fu-

ture,” which consists of remarks made by Griesedieck at.a

panel discussion before the New York Society of Security

Analysts.

Te Court: It may be marked Exhibit 17.

(Copy of document entitled “Brewing’s Bright Future”

—Remarks by Joseph Griesedieck at panel discussion be-

fore New York Society of Security Analysts, October 16,

1964, marked Government's Exhibit No. 17)

Im Cobnr: The date of that? Would you give us n

5 the datei ia 1,3

5 Tun Cx: 2It appears to be undated.

Mr. Sacar: May I see that? The panel discussion took

place on Friday, October 16, 1964.

In this statement of remarks on page 16 Mr. Griesedieck

answers the following question : The question is

2 is Falstaff’s reaction to industry trends in beer

Mr. Griesedieck answers: i

“For long range planning we are aiming for national dis-

tribution. Naturally this involves coming East.”

I would like to refer the Court to Exhibit 6, which is an-

swers to supplemental interrogatories. In response to

question 7—

TE Court: Interrogatory 71

Mn. Sagar: Interrogatory 7, (a) and (b). The defendant

has written:

“Attached hereto and made a part hereof are excerpts

extracted by Harry J. Pettey, Secretary of defendant,

from minutes of annual meetings of stockholders held

during the period, and relating to the subjects, specified

in this interrogatory.”

11351 One of the excerpts from annual meetings of share-

holders’ the meeting of April 27, 1964 where Harry

J. Pettey certified that what I will read is a true and

exact copy of the excerpt from that annual meeting. It

“He, Mr. Griesedieck, mentioned several new markets

that had been opened including Chicago, IIlinois and Wash-

ington, D.C. National distribution is still Falstaff’s even-

tual goal.

I would ‘now like to read from the deposition of Joseph

wane Court: Taken when? That is the one of April 26,

7 |

Mn. Sagar. This is April 26, 1967. Page 13; questions 1,

. ‘This is a document yon did not submit to us.

However, we do have it in a possession. I mya like to

von to examine page 14, the opening part of that para-

graph, would you read that just to yourself?”

This docum nt mentioned in the deposition is the re-

marks before the Security Analysis which the Government

has introduced, I believe, as Exhibit 17. 6

A. Which paragraph are you referring to?

[136] “Q. You made reference to the fact that it was in

the middle of a paragraph and I just wanted you to see

that that was the start of the paragraph. Now, I ask you if

you would again turn in the Exhibit 3A to page 16.”

Tue Court: What is that again? I didn’t get that.

Mn. Sacat: At this point they are simply trying to iden-

tify the particular—

Tue Court: The answer was in the form of a question, I

take it: ‘‘Which paragraph are you referring to?’’ Is that

it?

Mn. Sacat: The second question reads:

“You made reference to the fact that it was in the middle

of a paragraph and I just wanted you to see that that was

the start of the paragraph. Now, I ask you if you would

again turn in the Exhibit 3A to page 16.”

TRR Court: All right. What have we got there?

Mr. Sadar:

“Mr. Farr: He means this one, Mr. Griesedieck. Turn to

page 16 in that.

“Q. I direct your attention now to the lower righthand

corner where there is a quote attributed to yourself and

ask if you would read that to yourself, please?

[137] “A. I have already read it.

“Q. Do you recall the date of the meeting before the Se-

curity Analysts in New York?”

Answer on page 14 of the deposition:

“No, I don’t, offhand.

“Q. Does October of 1964 bring to mind—

“A. I really wouldn't remember. I’d have to check on it.

“Q. Directing your attention to page 3, hind the

date noted there as October 16,1964—.

“A. Well, that must have been the date. . *

. Do you recall that at approximately that time you

were in New York at this meeting?

. Now, in making the ima ‘For the long-range

‘Manning, we are aiming for national distribution. Natn-

rally this involves coming east. This can only be accom-

plished as our produetion capacity is expanded.’ In October

of 1964, did you have at that time any ee 3 in

5 mind as to expansion into the East?

} ot particularly, I think our posi-

that it would depend on what the opportunities

ning markets became.”

was

ducted prior to that, frankly.

40. In conjunction with that study of the market, was

there any feasibility study made as to the possible building

of a brewery in that area, the New England area?

4A. Not specifically New England, no.

„J. Was there a study conducted as to the feasibility of

building a brewery in the Northeast? ,

“A. No.”

Now I go on to page 76 of the same deposition.

Tun Covnr: 761

Mn. Saar: Yes. Question No. 1 on page 76:

Mr. Griesedieck, Id like to show you again Exhibit 3A,

page 16, and the ag sie again in the lower righthand

corner of the page. a look at that again, please. In

relation [139] directly to the statement that naturally this

involves coming East, what did the word ‘East’ mean at that

time in your statement? Gy

“Mr, Farr: Will you indicate what that time is?

“Q, The time of the speech, October, 1964.

“A. Well, at that time, we had been talking to Narragan-

sett, s0 I presume I was referring to that.

40. Does that then coincide with the following state-

ment: ‘For the present, it is likely that our pattern of con-

tiguous growth, that of ourself in an area,

then spreading out to surrounding areas will continue.’

very limited as to who knew about them. We weren’t about

to'make any public statements at that stage as to the fact

we were considering this“

I now go to page 19 of the same deposition; questions 2

[140] Tan Cover: Page 191

Mn. Saaat: Les.

In the last few years, let's say 1962 to date, have the

national brewers’ sales been progressing at a larger rate

than the large regional brewers?

A. Generally speaking, yes.

“Q. Has this been a matter of concern to Falstaff?

“A. Definitely.”

Page 20; questions 1, 2, 3, and 4.

“Q. Have the national brewers been making inroads into

the existing Falstaff markets? ;

“A. Definitely.

“Q. Have they been hurting the sales of Falstaff in their

current regional markets?

“A. Yes.

A, We haye always discussed within our Board of

Directors our ambition that don’t think it’s been publicly

stated—that we feel in order to be competitive with the

so-called national brands that we have to become national

because this prestige factor is of vital importance. The

ability to advertise on a national basis is important and so

that while our timetable has certainly never been pinned

down on the specific basis, we have always taken [142] the

ition that when the right opportunities are made avail-

able for opening a particular market, we would attempt to

look into it, but this involves many factors in different

markets. That’s about all I can say on that subject.”

I now turn to the same depositon, page 23, question 1.

This is the question:

In the period 1960 to 1965 was there any discussion by

the Board of Directors about the possible acquisition of

a brewery in the Northeast as defined previously?

“A. Tue period 1960 to 1965, yes.”

I now turn to page 32, question 3.

“Are there certain factors that are inherent in national

distribution that give them an advantage over a large

regional or a regional brewer?

Answer on page 33:

“Several, in my opinion.”

Page 33, question 1:

“Would you list them for me, please?

“A, One, I think I stated earlier, the opportunity to use

a national vehicle for advertising such as a television spec-

tacular, or a vehicle such as the Tonight Show.“ We are

limited to [143] regional marketing and advertising op-

90 Another is the prestige that is gained from

all over the country for the great mass

el back and forth today, they can get it

ey want, and they begin to think of this as a

product that must be better, and then the period of years

845

—

markets, where they were selling at or under us and that ig

bound to create a desire on the part of the consumer to up-

grade himself to what he calls a bargain situation.

. Are there any others that come to your mind?

“A. There may be others. These are the principal ones

that we see.

. Does the weather have any effect on sales?

“A. Well, again, being national, of course, there is some

protection there. The weather is definitely a factor. To the

degree that a market is limited to a brand, the weather can

be more of a factor than if he’s spread all over the coun-

try. If [144] it happened to be cold in one area and warm

in another, it balances itself out. If you’re limited in scope

and if you happen to have an abnormally cool spring or a

heavy snow, like Chicago this winter, those brands are

much more penalized than that brand that may also be sell-

ing in California at the same.time where they are having a

heat wave or something, so it's a factor, although probably

not as important as some of the others I mentioned.”

On page 34, question 1:

“Does Falstaff have labor contracts with each of its

plants or does it have a labor cantract universally

throughout?

“A. Each plant separately. 8

“Q. Is this true of the brewing industry, do you know?

“A. Generally speaking.

. Do labor troubles, strikes, things of this nature have

an effect on sales?

A. Definitely.

. Would there be a difference between the national

versus the regional?

AA. There is an effect on all brewery sales when there’s

strike in an area. Those brands who are shipping in

"Where they are not on strike [145] definitely have an ad-

regional.”

de, “cea er HER NOON a strike, are they

“Q. By reason of the diversification of the +

brewer, is he more able to stand a price competitive situa-

tion in a particular market? = gaa pe

“A. Quite frankly, they are the ones that are causing the

priee oompetitive fights, yes; I’d say so.”

Page 36, question 1:

“What would be the basic ingredients for a brewer to

go national in his sales?

“A, Money, first of all; a good product; and a good

wholesale organization.

. Would it be necessary for a national brewer—

“A. And talent.

. Excuse me:

3 “A. And talent of maigement, if you want to call

it that. 2

“Q. Talent in the management level or in the local re-

gional level where they would be selling?

4. All the way through the organization, primarily the

top management level.

„Would a brewer ***”

Tue Court: Is this page 36 you are still on?

Mr. Sacat: Yes, I am still at page 36. I am now at ques-

tion 5.

Would a brewer need regional plants to go national?

“A. In today’s market, I would say 80, yes.”

Tun Court: “Regional plants.” Those are breweries,

aren't they!!! | %

Ma. Sacat: Brewing plants or production facilities, I

„. Has it ever been discussed in the last five ‘years

since 1960, has it been discussed before the Board of Direc-

tors who will be the most successful. in the brewing indus-

try! ms a?

“A. You mean pe HE or the manner rin which

ac N e

manner in which they operate?

A. Certainly, there have been many discussions in [147]

our Board as to the belief that those brands who are na-

tional who have a complete range of product in the sense of

different priced brands and those brands with a strong

wholesale organization and a good marketing operation are

the ones that will be the most successful. This has been the

—certainly a prediction that I made even before 1960 and

this is what is happening in the industry today. alte

The foregoing deposition testimony and documents which

the Government has offered into evidence have been intro-

duced to show that there are advantages in being a na-

tional brewer and that Falstaff was very much aware of

these advantages and desired to have these advantages.

I would now like to read from page 39 of Joseph Griese-

dieck’s deposition. Question No. 1:

“Has Falstaff ever considered the possibility of intro-

ducing a second beer, a second brand of beer?

“A. We have given it a lot of thought many times, pri-

marily in the premium price area and have always come to

the conclusion that to do so would be prehibitively expen-

sive and would take many, many years and it was believed

that we shouldn’t take those resources away from Falstaff.

It’s [148] our belief that there is a limit to the number of

premium priced beers that could be developed from

scratch.

. Would this need or this desire for a second beer be

in conjunction with the hopes that one day you

will go national?

“A. I don’t recall whether it was discussed in context

with that or not. As I stated here earlier, we always said

we wished to go national but I think that the fact that we

felt the second brand of beer was important probably be-

came more of an issue from about 1960 on when we saw the

definite trend toward the national brand, the so-called pre-

mium priced brand, and the need to give these wholesalers

two brands.”

Page 55, question No. 1:

“It is true, is it not, that Falstaff has never built a

brewery?

‘two that

„A. Mr. Vollmer and I worked together on that, on those

moves, yes. He would probably have some knowledge of

them. I am sure he was involved at the time.”

Tur Court: 1 think it is 4:30. We will stop here, gentle-

men, until 10:00 o’clock tomorrow morning.

Ma. Copy: Your Honor, if it please the Court, I have one

matter to take up.

Tux Court: We will take it up tomorrow morning. The

Court has adjourned.

Adjourned at 4:30 p.m. until Wednesday, October 7,

1970, at 10:00 a.m.)

UNITED STATES OF AMERICA

IN THE DISTRICT COURT

OF THE UNITED STATES

FOR THE DISTRICT OF RHODE ISLAND

v. C. A. No. 3523

FALSTAFF BREWING CORPORATION

Before his Honor, Chief Judge Day

Wednesday, October 7, 1970

APPEARANCES:

For the Government: Philip F. Cody, Esq.

Bruce Repetto, Esq.

Kenneth A. Sagat, Esq.

Department of Justice

; Antitrust Division

For the Defendant: Hinckley, Allen, Salisbury &

Parsons; Matthew W. Goring,

Esq. of counsel.

Jerome M. McLaughlin, Esq.

St. Louis, Missouri

No.

Government's Exhibits’

Certificate, signed May 24, 1967, by Harry J.

Pettey, Secretary of Falstaff Brewing Corporation,

previously marked as attached to Government’s

Exhibit No.6

Falstaff Brewing Corporation press release dated

October 16, 1964 . :

Falstaff Brewing Corporation Quarterly Report

for period ending June 30, 1961 |

Copy of letter dated June 22, 1962, to Mr. Howard

Suslak from Joseph Griesedieck with two copies of

suggested Statement of Understanding attached

Copy of Memorandum entitled “Chronology of

Events, Ete., in L Negotiations”, dated April 30,

DEBE

Copy of letter dated ‘April 1, 1963, to Mr. Joseph

Griesedieck from Edward P. Bemberg with at-

.. tached. Statement of Understanding Reached in

Negotiations Between Liebmann and Falstaff

l of list and data schedule entitled: RE: L. B.,

Cc. , 42

Copy of Quarterly Report to Shareholders for

Period Ending June 30, 1963, Falstaff Brewing

Corporation i

Copy of document entitled “Excerpts from Execu-

tive Committee Meeting Minutes”

Copy of memorandum dated December 9, 1963,

marked “Personal”

Copy of Falstaff Brewing Corporation office mem-

orandum, with attached proposed letter to Honor-

able William H. Orrick, Assistant Attorney Gen-

eral, Washington, D.C.

Copy of memorandum dated December 12, 1963, en-

titled “Meeting Re East Co.”

Substitution for previously marked Government’s

Exhibit No. 1

Page

106

129

[153] SECOND DAY

Wednesday, October 7, 1970

10:00 am.

Ma. Rererro: Good Morning, your Honor.

I wonld like to first correct a mistake that was make yes-

terday. A document that was read into the record had a

certificate that makes references to several meetings—min-

utes of the meetings of the Board of Directors of the Fal-

staff Corporation, signed 24 May 1967 by the tary of

he Corporation, Harry J. Pettey, and it was attached to

it 6 incorrectly.

Tue Cover: Exhibit 61

_ Mr. Reperro: I would now like to remove that and offer

this document into evidence as Exhibit 18.

Mn. Gortne: No objection, your Honor.

Tux Covnr: Now the title of the document will be what,

“Certificate”? Exhibit 18.

3 (Certificate, signed May 24, 1967, by Harry J.

Pettey, Secretary of Falstaff Brewing Corpora-

tion, previously marked as attached to Govern-

81 ee 6, marked Government’s Exhibit

o. 18.

Tun Covrr: As to certain minutes of meetings. Is that

it?

_ Mr. Reperro: Yes, your Honor. There are three [154]

meetings listed. I would like the record to show all refer-

ence to this document as Exhibit 6 be read as Exhibit 18.

Tux Cuerx : The Certificate is dated May 24, 1967.

Mn. Copy: For the record, your Honor, perhaps we

might ask that all references to that particular part of Ex-

hibit 6 be read as Exhibit 18; Exhibit 6 still being in evi-

dence by itself.

Tux Covnr: Certainly. The record will so indicate.

Mn. Copy: Before we continue with our substantative

3 your Honor, there is one problem I would like to re-

a b

Mn. Gorrne: I am sorry, Mr. Cody. I cannot hear you.

Mn. Copy: I am sorry; I will speak louder.

Yesterday I was informed by Mr. Goring that he intends

But the fact is I suggest

il: the: witness appears. I

Tun Court: What do you say to that, Mr. Cody? At the

present. time there is a professed intention of Mr. Goring

to ball this witness at some tine.

Mn. Copy: I would be interested at this time to know ex-

actly why, this witness was. not designated before and why

he is designated now. That may help us in preparation for

his cross-examination and considerably shorten the time

needed for it and thereby aid the Court.

"Me. Gonne: I am quite prepared to inform the Govern-

ment and the Court on this point. The pretrial order does

in fact, as Mr. Cody has said, call for advance information

respecting witnesses proposed to be called and, in general

at least, the subject matter of the testimony which is to be

Now, I did not know this witness was available until

sometime in the last three days. I did not, when I learned

that he might be available, make then a decision that I

[156} should like to call him. The subject matter of inquiry

which will be made of this witness is within the bounds of

the subject matter to be adduced by other witnesses.

Tae Court: In other words, it is cumulative testimony.

Ma. Gonmo: It is accumulative testimony from a differ-

ent—well, shall I say from a different sort of witness,

whose experience will add a little to the stature of what he

says. The ground to be covered is not new.

Mn. Copy: May I have one minute, your Honor?

Tue Covrr: Certainly. /

{A panse.]

Copy: The only thing I would say, your Honor, is

does put the Government at somewhat of a disad-

UBT

; : In what way?

Mn r: In that if this witness is to testify within a

few days, that we may not have adequate time to totally

esearch his background. I would ask the Court in a gen-

eral way now, if we do need additional time to prepare for

eross- examination of this witness, whether that time will be

available. a |

Tax Court: In effect, you would be suggesting to me

this matter, which we had hoped to try within a given time,

ma be further continued. Is that what you are saying?

1157 Mr. Copy: No, your Honor. All I am saying is that

it may be necessary for the Government to ask for a day

or two to conduct additional research. I don’t know, for in-

_-stance, whether this man has written articles. We will have

to check into his background somewhat, whether he has tes-

tified in previous proceedings.

Tun Cover: I think what we will do is eross that bridge

‘when we come to it. .

MI. Copy: All right. Very good, your Honor.

Mn. Ser: Your Honor, yesterday the Government in

presenting its case was introducing evidence to establish

that Falstaff was a likely entrant into the New England

market. In particular, before adjournment, the Government

Vas presenting evidence to establish that Falstaff needed

and desired entry into New England. I will now continue to

“Offer evidence to establish that point.

Tux Court: Very well.

4 Mn. Sagat: I will now read excerpts from depositions

which, in establishing that point, show in particular the

~ corporate interest of Falstaff in expansion. I will first read

from the deposition of Joseph Griesedieck which, as indi-

cated yesterday, was taken on April 26, 1967. I will first

read from Page 91, questions 1 and 2.

.I show you this Plaintiff No. 6, Mr. Griesedieck, . . .”

1158 ‘Taz Court: Show what, please?

Mn. Saar: Plaintiff No. 6. It refers to a deposition ex-

Mbit which is—

Tux Court: Attached to the deposition?

Teme

f 2 N +

2 7 ORY 2

er : .

55 8 2 4

. bn

N 7 8 iy ‘

é 44 *

— . 2

a SE ER

2 1

8 8

lite

17175

Hig

273

Tpor on fo Pa 94, quest 1, 2,8, 4,5, ande

tbe aint * ’ 4

no cost study, as such, done?

was.

I ask now to look at Line 15 starting approxi-

. 4 "tho second column which shows the figure of

$20,000,000. Ee

“A. I guess I was really underestimating when I told

ten. It was twenty. :

97% Or $21.40 ag Now, Plant 7, I believe, is Fort

. same deposition, Page 109;

questions 3 and 4. No, excuse me. That is Page 100; ques-

tions 3 and 4.

. Was it part of the Falstaff marketing situation to

try to sell Falstaff at military installations :

A. We do that, yes.

. Is this an area in which vou would get people from

all over the country to gain acceptance of your name?

A. Certainly that’s a factor.”

_ I now refer to Page 179 of the same deposition; [161]

questions 2 and 3.

“Q. The negotiations with Narragansett terminated in

February of 62, is that correct? 2

“A. That’s right. 3

“Q. Mr. Griesedieck, I show you Exhibit No. 20. Would

you examine that, please?”

4 we 8 8

Tux Covnr: This is an exhibit again with that deposi-

tion?

MIX. Sagar: With that deposition ; yes, your Honor.

_. “—Sir, this is a press release from your corporation al-

legedly referring to statements made by you. Would this be

& type of press release that you would see and approve?

A. I would think so, yes.”

On Page 179, question 3—question 4.

Tae Cover: Question 3 or 4?

Mn. Saar: 3, I just read. Excuse me, your Honor. 4.

; 0. Directing your attention to the second page, first

paragraph relating to the expansion of Falstaff in the

$i long-range expansion program, particularly the quotation:

Tam Cover: Is this „second page” referring to Exhibit

0. eee e eee ö

N to us in St. Louis???

K. Well, that was part of it. The basic, the major expan-

sion was Fort Wayne, contemplation of Fort Wayne, which

was some twenty million dollars. We then estimated in the

ten-year period on the basis of an optimistic projection of

5 percent a year, we would have to have capacity in some

of our other plants, and we just took a rough estimate of

ten million dollars to round out this figure. This was not

based on any, let’s say, detailed, long range study. This

was just an estimate based on what we thought our capac-

ity needs for our existing markets would be in the next ten

years, assuming, as I stated earlier, annual sales increase

between 5 and 6 percent. That projection that you have

theré is the one that was used to rough up these figures.”

I will now go on to Page 181; questions 1, 2 and 3, Excuse

me, your Honor, that exhibit in the deposition, [163]

Plaintiff’s Exhibit 20, I would now like to introduce into

evidence as the Government’s Exhibit No. 19. This is a

press release, Falstaff Brewing Corporation, dated Octo-

ber 16, 1964.

Tue Court: Exhibit 19.

[Copy of Falstaff Brewing Corporation press re-

lease, October 16, 1964, marked Government’s Ex-

hibit No. 19.]

Mr. Sacar: On Page 181 of the deposition of Joseph

Griesedieck, Question 1—this question, as you will see,

your Honor, refers to the Plaintiff’s Deposition Exhibit 6,

which I mentioned a few moments ago.

„. Now, that document . .”

Tre Court: Was that Plaintiff’s or Interrogatory 67

M. Saat: That was Plaintiff's Exhibit 6 for the deposi-

tion.

Te Court: Oh, for the deposition.

Ma. Saar: [Continuing]

ee 99 85 hea

0. Now, that document, Exhibit 6, shows a plan of

twenty million dollars for the Fort Wayne plant, is that

dorrect :

A. Correct.

oe MQ; And an increase in barrels in the Fort Wayne plant

of approximately a million barrels?

. This doesn’t break it down unfortunately by plant,

so I would have to—they show a month—[164] this is a

monthly figure. This would be approximately a hundred

thousand barrels—I would assume that would be a million

roughly for a year.

“Q. At the time this plan was drawn up, what was the

plan for that additional capacity at Fort Wayne?

A. Well, it was in two phases. Phase 1 represented, I

haven't got the details, as I recall it Phase 1 was more in

the area of rehabilitation of the plant with some expansion.

Phase 2 represented an additional expansion program.

This was to be done either simultaneously or spread out.

‘We had no finalized decision on that. As I stated I think

earlier none of this was done except the installation of a

‘warehouse, which was part of this program.“

Tnow refer to the same deposition, Page 106.

Tux Court: You are going back now to Page 106.

Mn. Sadar: Question No. 2 which runs onto Page 1077:

“Q. Mr. Griesedieck, I am going to show you Plaintiff’s

Exhibit 7 and it is, as you heard, the proxy statement and

Td like you to take a look at it

THe Court: Proxy statement!

1165 Mn. Sacar: Yes, your Honor. That in this progeed-

ing is Plaintiff’s Exhibit No. 5.

“—and it is, as you heard, the proxy statement and I’d

ike you to take a look at it and see whether or not you saw

that before it was printed?

— Well, Tm sure I saw it in the Printer’s galley

proof.” 5

Now, for questions 1 and 2 on Page 107.

“Q. This is something that would be presented to the

Board of Directors to authorize to be issued?

“A. I'd like to ask my counsel that. I don’t know.

“Mr. McClellan: It was presented. I don’t know whether

they read it or not. It was presented.

. I'd like to direct your attention, sir, to Page 2, the

100

first paragraph of that section entitled, ‘Considerations

relating to the proposed acquisition,’ and ask you if you

will read that to yourself, please? Id like to direct your at-

tention to the sentence in the middle of that paragraph,

and I will quote: ‘On the other hand, Falstaff faces sharply

increased competition in its major markets, [166] particu-

larly in the South and Southwest where breweries are now

being constructed by Anheuser-Busch and Schlitz, the na-

tion’s largest brewers.’ This relates back to the statement

you made earlier today that you were facing more and

more increased competition in your basic marketing area

in 19641

“A, Well, actually I think this was developed in early

65, but the trend was certainly there, that's right.”

On Page 108 now, questions 1, 2 and 3.

„. What was the sharply increased competition in your

major markets that’s referred to here?

“A. I think they are referring to the potential competi-

tion developing out of the building of plants by Busch and

Schlitz in the Texas market, particularly where we have al-

ways been a large factor. It was quite obvious to us with

these plants in these areas where the local influence—par-

ticularly in Anheuser-Busch’s case, their promotions, their

gardens and all the rest of the things they have done—was

bound to create additional competition in the Texas market

as far as the South is concerned. This would enable these

brands to obviously become a [167] little more competitive

price-wise because of less freight and these have been our

major marketing areas and we were being cut into by these

brands even prior to their building these plans. It looked to

us that with the addition of these plants certainly they

were going to be more competitive.

“Q. Were you losing sales in your marketing area to the

nationals in late 64

“A. Late 64, the trend was beginning to be felt. Cer-

tainly it was being accelerated in 65.

„. Was there a similar loss of sales in your marketing

area during 637“ :

The answer on Page 109:

“J can’t recall. There probably was some although we

were probably gaining in others, so I can’t recall exactly. I

think the great acceleration of the premium or national

brands has been more, say, in the last three years. In addi-

101

tion, of course, Pabst has entered into the picture at that

point, too, as a competitor, not so much in Texas but in the

South.”

Txe Court: This deposition was taken when, in ’67?

Mr. Sacat: This was taken in 67, April of 67.

1168] I now read on Page 110 of the same deposition

questions 1, 2, 3 and 5.

“Q. Again, quoting in the paragraph on Page 2 in Ex-

hibit 7 :—”

—which I will just say is the Government’s Exhibit 5 in

this case—

At needs further diversification of markets for its

products, particularly in the Northeastern States and in

the popular centers of New York and Pennsylvania.’

Would you explain the need for the further diversification

of markets for its products?

“A. Well, it gets back to the philosophy that as an at-

tempt to become national, these were the areas where we

had to move, provided the proper conditions were to exist

either through facilities, distribution, market conditions, et

cetera.

“Q. Is the Northeast a high beer consumer area?

“A. Probably the highest in the United States as an

area.

“Q. Is this a desirous area to be selling beer in?

“A. Certainly it is. 5

“Q. Prior to this time, prior to the acquisition of Narra-

_‘gansett, was there no discussion before the [169] Execu-

tive Committee of Falstaff as to the possibility of entering

into this market, the Northeast market?

“A. Prior to the acquisition of Narragansett, prior to

the consideration of the acquisition of Narragansett?

“Q. Prior to the acquisition—strike that. Prior to the

consideration to acquire Narragansett, was there a discus-

sion before the Executive Committee as to the desirability

of being in that market?

“A. Sure, we have discussed at times the desirability of

being in that area as part of our total national program.

No specific proposal was proposed that I know of other

than the one we are talking about here if you’re speaking

with reference to New England. If you're speaking with

reference to other areas, there were other areas that I

102

think you're aware of, but nothing that we developed. I

mean, these were all things brought to us. We did not at

any time that I recall ever specifically say, the Board or

the Executive Committee, we want to be in New England

and we're going to go in New England next month or

something like that, if that’s [170] what you're referring

to. We probably said—I know we did—that it was our ulti-

mate ambition to be national, and to that degree, someday

we would have to sell the Northeast, but we would not be

able to do it without the proper combination of opportuni-

ties.”

On Page 112, question 4.

„. Was there any particular need to be in the North-

eastern States?

“A. Only that it represented the large beer consumption

area and that ultimately this was a market that we felt we

had to be represented in if we were to become a national

factor. Without being in that area of the country, nobody

could be a national factor because this is where the bulk of

the population exists.”

I now refer to the deposition of Alvin Griesedieck, taken

May 2nd, 1967.

TRR Court: May what?

Mr. Sacat: May 2nd, 1967.

I refer first to Page 7, questions 3 and 4.

Question 3:

“Was it a part of your function as director of marketing,

this would be subsequent to 1960, [171] 1961, was it a

function of your job that you consider new ways to sell

Falstaff beer in markets they were not then selling it in?

“A. Yes, I would say it was.

„. And were you concerned merely with those areas that

touched on the present Falstaff market, or were you con-

cerned with any area that Falstaff was not selling in?

„A. Generally speaking, I would say that I felt it was

my responsibility to, you know, to be abreast of, you know,

potentials of, yon know, for beer sales anywhere that we

weren’t selling, but primarily in areas contiguous to our

present marketing area.”

In the same deposition I will turn now to Page 26, Ques-

tions 1 and 5.

Tun Court: 1 and 5. You are going back to 1. Is that it!

103

Mu. Sagar: This will be Page 26, questions 1 and 5.

Tae Court: Page 26.

Mn. Saar: [Reading] f

“Q. I show you Plaintiff's Exhibit 52 and ask if you

would read the first page to yourself, actually just the

lower paragraph on the lefthand column unless to wish to

read the entire [172] article.”

Tun Court: Is this Plaintiff's Exhibit 52 an exhibit

marked in connection with the taking of that deposition :

Mr. Saar: Ves.

TR Court: Is it in evidence in this case?

Mn. Saar: No, it is not, your Honor.

Question 5 on Page 26—

THE Court: Page 26.

Mr. Sacat: [Reading]

“Directing your attention to the right-hand column on

that first sheet, the first full paragraph: ‘Yet in this area

in 1957 Fals

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