Court Tightens Antitrust Use to Fight Merger

WASHINGTON — The Supreme Court today approved a major merger in the beef packing industry but refused to accept Reagan Administration arguments that companies be barred from using antitrust laws to ward off competition.

The court, on a 6-2 vote, approved of the June, 1983, merger of two beef packing companies, Excel Corp. of Wichita, Kan., and Spencer Beef of Arden Hills, Minn., a division of Land O’Lakes.

The merger was challenged by Monfort of Colorado Inc., the country’s fifth-largest beef packer, on the ground that after the merger Excel might lower prices to increase its market share and thereby injure Monfort.

But the high court found no evidence of unfair competition.

In reaching its decision, the court also refused to adopt a rule urged on it by the Justice Department that would bar competitors from filing such suits by denying them legal standing to “challenge acquisitions on the basis of predatory pricing theories.”

“We decline the invitation,” the court said. “As the foregoing discussion makes plain . . . predatory pricing is an anti-competitive practice forbidden by the antitrust laws. While firms may engage in the practice only infrequently, there is ample evidence suggesting that the practice does occur.”