General Cinema Unit Fined $1 Million for Price Fixing

A General Cinema bottling subsidiary was charged in U.S. District Court in Washington on Wednesday with conspiring to fix prices of cola drinks in the Washington area and immediately entered a guilty plea to the one-count felony.

The company paid a $1-million fine--the maximum penalty--and said it has agreed to cooperate with federal antitrust officials in their “continuing” investigation of the soft-drink industry. At least four federal grand juries in southern states are believed to be investigating pricing practices in the soft-drink bottling industry.

In court documents filed Wednesday, federal prosecutors did not identify co-conspirators other than to allege that one other firm and “various individuals” had participated. The information alleged that General Cinema Beverages of Washington conspired to fix the prices of “certain Pepsi-Cola and Coca-Cola soft-drink products” sold in the area over an 11-month period in 1984 and 1985. The charge marked the second time in 14 months that federal prosecutors have accused a General Cinema subsidiary of violating federal antitrust laws.

In August, 1985, General Cinema’s movie theater division was charged with conspiring with other theater owners in South Bend, Ind., not to compete for certain films. In that case, General Cinema pleaded guilty and paid a $750,000 fine.

General Cinema, headquartered in Chestnut Hill, Mass., is frequently ranked as the nation’s largest theater operator and the largest independent bottler of Pepsi-Cola products.

The company said it had hired an outside law firm--Skadden, Arps, Slate, Meagher & Flom--to determine whether any officers or directors had knowledge of the “improprieties,” but no such evidence was reported.