The NAM and the Grocery Manufacturers of America filed a brief urging the Texas Supreme Court to review a lower court decision relating to calendar marketing agreements (special product promotions) that manufacturers offer to retailers. The lower court ruled that a manufacturer with a large market share violated the Texas Free Enterprise and Antitrust Act by using these special promotional programs solely because of the adverse impact on competitors. Our brief argued that the antitrust laws are designed to protect competition, not competitors, and that Coca-Cola's competitors were free to display their products and offer special promotions of their own. We also argued that the Texas law illegally reaches conduct in markets outside that state, adversely affecting interstate commerce.
On October 20, 2006, the Texas Supreme Court overturned the lower court’s decision. It held that plaintiffs, who were bottlers of competing products, had failed to prove an effect on overall competition in any relevant market since consumers could avoid higher prices at one store by simply “going down the street” to another store. Although “consumers may have paid more on occasion in a particular store,” there was no evidence that the calendar marketing agreements “caused consumers to pay higher prices generally.”
The court also held that the Texas Free Enterprise and Antitrust Act does not apply to competitive injury alleged to have occurred outside the state.