December 6, 2004

DECEMBER 6, 2004



            Attorney General Steven Rowe today announced that the State of Maine, Rite Aid Corporation, and Community Pharmacy, L.P., have agreed to a consent decree (an agreed-upon court order) that places conditions on the sale of five Community Pharmacy stores to Rite Aid. In the consent decree, neither Rite Aid nor Community admits to any violation or wrongdoing.

The conditions imposed by the decree are based on state antitrust law, which is intended to promote competition, and limit artificial barriers to entry in Maine markets.  The Community Pharmacy stores that will be purchased are located in Fort Kent, Madawaska, Houlton, Fairfield, and Gray.  Rite Aid was required to notify the Attorney General of pharmacy acquisitions in northern Maine under the terms of a 1995 consent decree.

            Under the decree, submitted today for court approval, Rite Aid and Community Pharmacy must limit the non-compete clauses of their agreement, which restrict Community’s ability to compete with Rite Aid, to the following areas and time periods:

Gray:   A five-year, five-mile restriction, using the store as the center of the five-mile radius circle, with a bulge including the entire municipality of Windham.

Fairfield:   A five-year, five-mile restriction centered on the store, with a bulge including the entire municipalities of Fairfield, Waterville, Winslow and Oakland.

Houlton, Fort Kent & Madawaska:   A five-year, fifteen-mile restriction centered on the store in each case.

In addition, Community will be restricted in its ability to compete in the Maine market for mail order prescription drugs, but only to a limited extent. Specifically, for a two-year period, it may not use any information gleaned from the pharmacies being transferred to solicit mail order customers within the geographic areas described above. The decree also requires Rite Aid to offer to terminate a lease it holds on property in Fort Kent owned by Paradis Brothers Enterprises, formerly occupied by Brooks Drug and a state liquor store. These premises are adjacent to the Paradis Family supermarket.   

Rite Aid and Community Pharmacies will each pay the State $2,500 to defray the Attorney General’s cost of investigation; in addition, Rite Aid will pay a $2,000 penalty for failing to notify the Attorney General of an unrelated transaction when it bought Frontier Pharmacy in Caribou approximately a year ago.

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