Kason Industries Inc., Customer Allocation Conspiracy, New York 2010

Kason Industries Inc., a Georgia manufacturer of food service equipment hardware, has been exposed for its role in a customer allocation conspiracy that has cost the company a hefty $3.3 million fine.

The Newnan, Georgia-based corporation pleaded guilty on May 19, 2010, in U.S. District Court in Atlanta to participating in a conspiracy to allocate customers for food service equipment hardware sold in the United States and elsewhere. The conspiracy, which took place from December 2004 until at least December 2008, was aimed at reducing and eliminating competition in the sale of the food service equipment hardware manufactured or sold by Kason Industries.

The company’s former president, Peter A. Katz, was also charged on May 6, 2010, with one count of participating in the conspiracy. Katz pleaded guilty and is scheduled to be sentenced on January 5, 2011.

The customer allocation conspiracy involved fabricating parts, such as cafeteria hardware, equipment legs, and casters, as well as fabrication supplies and walk-in refrigeration components. According to court documents, Katz and co-conspirators agreed to allocate customers, not compete for one another’s protected customers, submit intentionally high prices or bids to certain customers, exchange prices to customers, and sell food service equipment hardware at collusive and noncompetitive prices.

The investigation into the customer allocation conspiracy is ongoing and is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Atlanta Office. Anyone with information concerning customer allocation or other anticompetitive conduct in the food service equipment hardware industry is encouraged to contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

Kason Industries Inc.’s guilty plea and $3.3 million fine serve as a reminder of the importance of fair competition in the business world. The company’s actions, however, have had serious consequences, and it is essential that businesses prioritize transparency and integrity in their dealings.

Kason Industries Inc., a food service equipment manufacturer, was sentenced to pay a $3.3 million criminal fine for conspiring to allocate customers in the food service equipment hardware market, including walk-in refrigeration equipment, in New York. The conspiracy occurred from December 2004 to at least December 2008.

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