Tag: Independent Business

Heard of the Robinson-Patman Act? If you spend money, you should.

Small retailers have a law to help them compete but is little used.

P

Have you noticed a considerable decline in local and regional retail businesses over the years?

Small groceries, pharmacies, hardware, music shops, bookstores have lost out to what we now call “Big Box”.

Some of this can be contributed to changing shopping tastes.  Big Box can offer the stock and breadth of products that smaller retailers cannot.  I admit that I go to Big Box for this reason.  Also, Big Box has a stronger online presence that some retail businesses have either not adapted well to or refuse to. 

Robinson-Patman Act

Local and regional retailers do have the support of the Robinson-Patman Act.  It was enacted in 1936 by Senator Joseph T. Robinson of Arkansas and Representative Wright Patman of Texas.  The Act was designed to restrict price discrimination by large suppliers and protect small retailers from national chain stores.  Suppliers could offer discounts to retailers who bought in bulk, but criteria had to be available to any retailer, without favoritism to individual ones.

The 1980’s saw enforcement begin to wane, as challenges to price discrimination began being seen as anti-competitive.  Businesses were allowed to violate either the law or the spirit of the law and get away with it.

Walmart and Pepsi Collusion

In late 2025 The Institute of Local Self Reliance sued the Federal Trade Commission (FTC) to make public censored details from the case involving PepsiCo and Walmart.  Brought by three Walmart customers, the suit alleged that PepsiCo was informing Walmart what other retailers were paying for the product and conspiring with Walmart’s knowledge to charge them a lower price, in keeping with Walmart’s well-known message of having lower prices.  The Trump Administration subsequently supported the decision by the current FTC to not pursue it any further.

Legislation

On March 19, 2026, Senator Chris Murphy of Connecticut filed in Congress the Fair Prices for Local Businesses Act.  In effect it would strengthen the Robinson-Patman act by eliminating loopholes that currently allow large companies from striking better deals with suppliers than their smaller rivals.  In other words, it would further codify as illegal the arrangement that occurred between Walmart and PepsiCo. 

Conclusion

One thing I advocate is strengthening anti-trust laws to allow for a greater definition of what anti-trust and anti-monopoly behavior is.  This can allow judges have better clarity as to what is in violation and what isn’t.  I support this law.  Equally important, it should go further and eliminate bulk discounts to large retailers.  Testimony from local and regional retailers on this would be welcome, and the media picks up on it as a priority. 

Contact your Senators and ask them to support this legislation.  At the same time ask them to support the Break Up Big Medicine Act, a bi-partisan legislation by Senators Hawley and Warren.  This targets Big Pharma and its acquisitions of health care companies and pharmacies.

 

 

What the F.T.C. Can Learn from Al Capone

F.T.C. needs broaden anti-trust laws to better insure convictions.

Al Capone

A century ago, gangster Al Capone was alleged to have been involved with prostitution, illegal gambling and murder, including the St. Valentine’s Day murder.

I say alleged, because Mr. Capone was tried but never convicted of any of the above.  In 1931 the Justice Department changed its strategy and convicted him of tax evasion.  He was given an 11-year sentence and was released early, in 1939.  His health subsequently declined and he died in 1947.

Had there not been laws on tax evasion that could land a person in jail, Mr. Capone may very well have continued his crime spree.

Failed Attempt

The New York Times reported on January 20, 2026 that the Federal Trade Commission (FTC) announced it will reopen its pursuit of anti-trust charges against Meta, parent of Facebook, regarding its acquisition of both Instagram and What’s App.

The judge in the original case, Judge James E. Boasberg, ruled that Meta did not violate anti-trust law with the two acquisitions. 

Judges should interpret the law and not legislate from the bench.  If Judge Boasberg believes that Meta did not violate anti-trust law with these acquisitions, it is important to know where in federal law he justifies his position.  The F.T.C. originally sought charges that the Sherman Anti-Trust Act of 1927 was violated.  Meta argued that it faces competition from apps like You Tube and Tik Tok. 

There is a video on YouTube from 2010 where Mark Zuckerberg states at a company address that Facebook does not acquire companies for the company itself, but to acquire the individual or individuals behind it.  In other words, he explained this as his method of acquiring top talent.  However, as a result, the companies these people started, all tech companies, simply disappeared.  Nice way to quietly get rid of any rising competition, isn’t it? 

Analysis

If the F.T.C. is serious about revisiting this, the people there really need to look at why they lost the first time.  If they apply the same evidence, they may get a similar result, even if ruled by a different judge.  Perhaps looking at Meta’s (previously Facebook) ENTIRE acquisition history may provide additional evidence of anti-trust, monopolistic behavior.  If they feel they still have a weak case, perhaps amending federal law to provide them with a wider net would bring Meta, and possibly others, to justice. 

Hostile Takeovers – How to Cease Hostilities

Businesses need help from wasting time and money on this.

In the News

Paramount continues to pursue Warner Brothers Discovery, though management has clearly indicated the Netflix deal is in the company’s best interest.

At the same time, Cincinnati based Cintas Corporation has announced a third attempt to acquire Massachusetts-based UniFirst.  Both companies provide employee uniforms and related services but in separate parts of the country.

What is the link between the two?  They both involve using the tactic known as the hostile takeover.

Definition

A hostile takeover is an acquiring company seeking to obtain control of another company, often a competitor, against the recommendation of either senior management or the board of directors.  The pursuer will sometimes appeal to the shareholders directly to force a vote on the bid. 

This tactic was used by Standard Oil Company to acquire refineries a century ago.  Since the Depression it was rarely used until the 1980s.  The Reagan administration pursued deregulation, which led to a different, and sometimes aggressive, approach to corporate governance. 

Anheuser-Busch

One that made headlines in 2008 was the acquisition of Anheuser Busch by Belgian-based InBev.  It is now known as AB-InBev, which is now the world’s largest brewer.  By the way, it was the world’s largest brewer PRIOR to the acquisition.  During negotiations InBev promised not to close any breweries, but it did not promise to maintain current employees.  As a result, some 1,400 jobs were eliminated—jobs perfectly legitimate one day were now gone the next day.

Analysis

In my opinion, hostile takeovers deviate far from the founding principle of capitalism.  That principle is having an idea for a product and service and acting on it in an environment where those ideas can become real and make a profit.  Having to battle competition is also part of this principle.  Hostile takeovers are nothing more than a power grab meant to either dominate the market or specific companies.

Some may argue that they are pursuing growth.  They also argue that some companies are bloated and inefficient and an outsider needs to come in and straighten things up.  Nothing wrong with pursuing growth.  But growth can (and should primarily) be pursued through internal research and development.  As for inefficiencies, some companies may have them.  But they should be urged to change through persuasion rather than bullying tactics.  Some may not change, and they may fail.  Business failure is also a principle of a capitalist economy.

How to stop this

Some pursued companies have adopted tactics known as a “poison pill,” meant to provide roadblocks.  An example would be issuing additional shares to existing shareholders, thus making it difficult for the acquirer to obtain a majority stake.

The federal government could also create a law that would allow the victim to declare a hostile takeover has been pursued.  The aggressor would then be prohibited by law from making any further attempt to acquire the other.  If the victim does not declare, the pursuit may continue.  This would allow the pursued to keep its resources and not waste either time or money with lawyers to try and fend it off. 

Does this make sense? 

Should this not be pursued?

Independent doesn’t mean you have to go it alone

There are organizations that can help the independent thrive as independent

There are organizations that can help the independent thrive as independent

Are you an independent business?  Do you want to stay independent?  Does your independence feel threatened by those that are bigger than you?

One is the National Federation of Independent Business (NFIB).  Their motto is as follows:

We are a nonprofit, nonpartisan, member-driven organization that advocates on behalf of America’s small and independent business owners—both in Washington, D.C., and in all 50 state capitals.

They are a business advocate, gathering member opinions nationwide in order to steer policy priorities.  They focus on taxes, healthcare, labor and regulations.

They also focus on competitiveness, working that both government and massive businesses make it impossible for them to compete.  Their website has a video on their anti-trust advocacy.

Another institute is the Center for American Entrepreneurs.  Their motto is as follows:

CAE is a nonpartisan Washington, DC-based research, policy, and advocacy organization that works with policymakers at the federal, state, and local levels across the country to build a policy environment that promotes new business formation, survival, and growth. We pursue this objective through a wide range of activities

They work in advocacy through an Advisory Council and provide issue analysis through a Research Council.  They also have a Board of Directors made up of entrepreneurs, startup investors and startup mentors.

There is also the U.S. Small Business Administration.  Their historical role has been to approve small business loans.  However, they are also involved with small business disaster relief.  In addition, their website provides links to various issues with starting a business, including how to win federal contracts. 

In  December, 2016,  Forbes magazine published the article, “43 Reasons You Should Support Small And Independent Businesses.”  They are primarily quotes from small business owners themselves.  If you identify with one or more of these, you may want to start a campaign to promote them to the general public.  In addition, they offer an Entrepreneurs and Small Business newsletter you can sign up for.

Cintas and UniFirst Visions aren’t Uniform

This is a classic example of what’s wrong with mergers and acquisitions today. 

Cintas Uniforms Truck

On January 7, 2025, Cintas Corp. announced a $5.3 Billion offer to purchase rival UniFirst.  Both companies’ core business is corporate uniforms.  Cintas is headquartered in Mason, OH, over 20 miles north of Cincinnati.  UniFirst is in Wilmington, Massachusetts. 

This proposed acquisition has an interesting history.  Cintas proposed acquiring UniFirst in February 2022, but the offer was rejected.  Management has now rejected this second offer.

Steve Watkins of the Cincinnati Business Courier quotes Cintas CEO Todd Schneider saying:

 “We call on the UniFirst board, its controlling shareholders and management team to immediately engage with us to reach a mutually acceptable definitive agreement that delivers the full value of this combination for shareholders and other stakeholders…We firmly believe in the compelling strategic fit between our two companies, and our offer would deliver immediate and compelling value to UniFirst shareholders…The combination would also amplify the benefits of Cintas and UniFirst’s ongoing technology investments to drive growth and benefit our collective customers and employee-partners.”

UniFirst issued a response, saying:

“The board conducted a careful review of the unsolicited proposal and determined that it is not in the best interests of UniFirst, its shareholders and other stakeholders,” adding the decision was made based on the offer price, business risks and feedback from its largest shareholders.

Cintas

Cintas is 3½ times larger, with $9.6 Billion in revenue, versus $2.7 Billion for UniFirst.  UniFirst has an interesting strategy, though, to fight back.

UniFirst posts on its website suggestions directed at customers of companies acquired by Cintas to consider switching to them.  And there is more than one company listed.  How about that!

Resistance Strategy

Cintas is not a bad company.  Watkins published an article in 2024 that highlights its positive work culture. 

Analysis

Cintas’s approach to acquiring UniFirst is a classic example of what’s wrong with mergers and acquisitions today.  It is a business chess game where the opponent is forced to play.

If someone came out of the blue to tell you what is in your best interest, would you like that?  Is this a way to win friends and influence people?  I know that many people preach about the benefit of “persistence”, but in this case “persistence” is really bullying, isn’t it?

If a company’s management is actively pursuing an acquirer, do their homework and find “the right fit”, that’s one thing.  A merger may be a better option than an acquisition, though.  In this case bullying tactics are used where the only real question the acquirer asks is “what’s in it for me?” 

Corporate Directions

Cintas’ approach to its employees is totally different to its acquisition process, isn’t it?  It is like they act as a Jekyll and Hyde company.  Do you believe companies should engage in bullying tactics with their competition?  Is this how you operate?  Does the end justify the means here?

FIGHT THE POWER!

Achieving power over others through consolidation does not justify pursuing growth.

Make America Great Again…

That is a great campaign slogan, no matter what your opinion is of Donald Trump. However, he seems to define it in mainly terms of removing illegal aliens and implementing tariffs. I also would like to make America great again, but focus in a different direction

This America still exists but not in the numbers some fifty years ago. Beginning in the 1980s numerous industries began to go down the road of consolidation. For acquired private firms it often resulted in a major culture shift. For publicly traded companies, an acquisition was often sold as to what was in the best interest of shareholders. In the last 50 years many shareholders for public companies are mutual funds, pension funds, and other investment firms that have only a financial and not personal interest in the firm. This strategy has often been at the expense of employees, customers and communities. These three have also been at a similar disadvantage at some privately held companies too…. (Contd. – page link below)

Pages: Page 1, Page 2