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PREATE FILES ANTITRUST SUIT TO BLOCK CHOCOLATE COMPANY MERGER

 HARRISBURG, Pa., April 15 /PRNewswire/ -- Attorney General Ernie Preate Jr. today filed a federal antitrust suit against a corporate merger which would put Whitman Chocolates out of business and cost Philadelphia 600 jobs.
 Preate will discuss the suit in remarks today at a rally of the Bakers, Confectionery and Tobacco Workers Union, scheduled for noon in the Caucus Room on the fourth floor of Philadelphia City Hall. Preate will be available for interviews at that time. The rally is intended to protest the merger.
 In a lawsuit filed in U.S. District Court in Philadelphia, Preate's Antitrust Section alleged that the acquisition of Whitman's by Russell Stover Candies of Kansas City, Mo., will substantially reduce competition in the gift boxed chocolates market.
 Preate also asked the court for a temporary restraining order blocking the acquisition pending its decision on the lawsuit.
 "We're taking this action because we are convinced this merger violates federal antitrust law," said Preate. "Our investigation has found that the merger would give Russell Stover a 45 percent share of the gift boxed chocolate market, with the next highest market share at just 21 percent.
 "And, while our suit must be argued strictly on antitrust law issues, I cannot, as a responsible public official, ignore the fact that this merger will put 600 people in the Philadelphia area out of work if we don't stop it. I don't want that to happen."
 Preate noted that he knows of two other offers to buy the Whitman company, one from a company which has said it would keep the plant and its 600 jobs in Philadelphia.
 Whitman's Chocolate's, a 150-year-old Philadelphia institution, is a division of Pet, Inc. (NTSE: PT). It had 1990 domestic sales of $100 million and has about 600 employees in the Philadelphia area. It is the third largest manufacturer of gift boxed chocolates in the country. The Philadelphia plant is Whitman's sole manufacturing facility.
 Russell Stover is the nation's largest producer of gift boxed chocolates, with estimated sales of $250 million a year. Russell Stover has announced plans to close the Whitman's plant in Northeast Philadelphia in June.
 According to the complaint filed in the case, a temporary restraining order is necessary to prevent the two companies from taking any action that would impair the commercial value and marketability of such assets as the "Whitman's Sampler" trademark and other assets which have been sold to Russell Stover.
 The suit alleges that the merger is a violation of Section 7 of the federal Clayton Antitrust Act.
 Preate noted that if Pennsylvania had a state antitrust law, his office would have been able to initiate this lawsuit sooner. Pennsylvania is the only state in the nation without a state antitrust law.
 Preate said the antitrust suit is supported by an exhaustive analysis done by John L. Stanton, a professor of food marketing at St. Joseph's University in Philadelphia, and a nationally


recognized expert in food marketing.
 In an affidavit filed with the antitrust complaint, Stanton said that if Russell Stover controls Whitman's, it would gain the ability to coordinate pricing between two former competitors and, thus, could avoid genuine price competition.
 According to the affidavit, "The acquisition would mean that the market was totally concentrated with the newly formed company dominating.
 "...it appears that the concentration will enable the new combined firm to effectively stifle price competition.
 "...I believe the transfer of Whitman's trademarks and other assets will result in significantly less competition in this market," Stanton said.
 The antitrust suit was filed today by Deputy Attorney General James A. Donahue III of Preate's Antitrust Section. Donahue said he will ask the court today to set a hearing date on the request for a preliminary injunction. He said he hopes to be able to hold a full hearing on the complaint by mid-June.
 /delval/
 -0- 4/15/93
 /CONTACT: Mike Moyle of the Office of Attorney General, 717-787-5211, or, home, 717-737-9439/


CO: Pennsylvania Attorney General's Office; Whitman's Chocolates;
 Pet, Inc. ST: Pennsylvania IN: FOD SU: TNM


LJ -- PH008 -- 6118 04/15/93 10:24 EDT
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Date:Apr 15, 1993
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