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United States v. Falstaff Brewing Corp., 410 U.S. 526 (1973)

United States v. Falstaff Brewing Corp.

No. 71-873

Argued October 17, 1972

Decided February 28, 1973

410 U.S. 526


Respondent Falstaff, the Nation's fourth largest beer producer, which was desirous of achieving national status, agreed to acquire the largest seller of beer in the New England market rather than enter de novo. The District Court dismissed the Government's resultant suit charging violation of § 7 of the Clayton Act, finding that entry by acquisition, which the court found was the only way that respondent intended to penetrate the New England market, would not result in a substantial lessening of competition.

Held: The District Court erred in assuming that, because respondent would not have entered the market de novo, it could not be considered a potential competitor. The court should have considered whether respondent was a potential competitor in the sense that its position on the edge of the market exerted a beneficial influence on the market's competitive conditions. Pp. 410 U. S. 531-538.

332 F.Supp. 970, reversed and remanded.

WHITE, J., delivered the opinion of the Court, in which BURGER, C.J., and BLACKMUN, J., joined, and in Part I of which DOUGLAS, J., joined. DOUGLAS, J., filed an opinion concurring in part, post, p. 410 U. S. 538. MARSHALL, J., filed an opinion concurring in the result, post p. 410 U. S. 545. REHNQUIST, J., filed a dissenting opinion, in which STEWART, J., joined, post, p. 410 U. S. 572. BRENNAN, J., took no part in the decision of the case. POWELL, J., took no part in the consideration or decision of the case.

Page 410 U. S. 527

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