McCormick May Face U.S. Suit on Pricing

The staff of the Federal Trade Commission is prepared to recommend a lawsuit against spice maker McCormick & Co. over claims that the company discriminated in the prices it charged various retailers, according to sources familiar with the investigation. At issue is whether the company paid different allowances, mostly in the form of discounts, to retailers for shelf space and prominent visibility in the placement of its spice products. Manufacturers can pay such promotional expenses, but are not permitted to discriminate among retailers unless they are trying to match prices by the competition. The sources said the staff will argue that McCormick allegedly gave these discounts selectively to certain retailers. Regulators are worried that such a practice could mean higher prices for consumers. McCormick, based in Sparks, Md., said it does not believe it has engaged in any wrongdoing. “McCormick takes pride in conducting its business honestly and ethically,” Chief Executive Robert J. Lawless said.