At the Belt

So far this year, the federal trustbusters have won twelve criminal indictments against U.S. industry for price-fixing in various fields. The number is by no means a record; 37 indictments were returned in 1962 and 17 last year. But each case seems to get closer to the consumer's wallet. Last month a federal grand jury indicted eight leading steel companies on charges of rigging prices in the steel that goes into cars, refrigerators and washing machines. Last week the trustbusters-struck hard at the belt:in the biggest indictment yet brought in the food field, they made price-fixing charges against the twelve millers that grind 65% of the bakery flour used in the 40 states east of the Rocky Mountains.

The companies cited, which do a total business of $305 million a year, include the two largest millers, General Mills and Pillsbury. Since 1958, the Government charges, they have fixed prices in the flour made from the hard winter and spring wheat that goes into white bread. Along with these firms, three presidents and three vice presidents were named as conspirators. The suit against the millers is much less definite than the steel case in details about how, when, and where the millers met to set; it claims that they used two economics news services to spread the word on what the prices were to be, also had the prices published in a trade journal called the Southwestern Miller. If anyone of the conspirators was suspected of deviating from the set flour price, say the trustbusters, the others got on the telephone to enforce the agreements.

The flour companies intend to fight hard to beat the charges. "It is common knowledge in the milling industry," said Chairman Philip W. Pillsbury of Pillsbury, "that a good deal of bakery flour is sold at a loss." Since the Korean war, says he, the millers' profit margin in the sale of bakery flour has held at 1% of the retail price of a loaf of white bread. Actually, argues Pillsbury, the Government has a bigger hand than the millers in setting prices. The cost of wheat makes up five-sixths of the flour price, and Government crop-support programs are the major factor in determining the wheat price.

Indictment of the millers pointed up the fact that the trustbusters seem to be savoring the food industry: 24 antitrust cases against the industry are now under way, and 46 others are being investigated--amounting to more than 10% of all antitrust cases.

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