Analysis of Antitrust Challenges to Category Captain Arrangements

Abstract

Category management (CM) is a widely practiced supplier–retailer process for managing entire product categories as strategic business units and for customizing them on a store-by-store basis to produce enhanced business results through a focus on delivering consumer value. A particular form of CM involves “category captain” (CC) arrangements, in which a supplier, often the category leader, takes on a significant role in the retail management of the category, including the brands of competing suppliers. Although CC arrangements are capable of yielding benefits to competition, they may also enable a CC to take advantage of its role in ways that restrict competition and harm consumers. Recent antitrust litigation that targets CC arrangements illustrates the nature and magnitude of competitive issues that can arise in the arrangements. Competitive concerns about CC arrangements have also attracted the attention of public policymakers in the United States and abroad. In response to public policy developments and in recognition of the significance of CM and CC arrangements in the marketing field, Journal of Public Policy & Marketing recently collaborated with the American Antitrust Institute to convene the Roundtable on Antitrust and Category Captains. This article assembles and archives the findings, analysis, and commentary from the roundtable, and it examines antitrust issues that may attend CC arrangements.