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July 22, 2009 11:54 AM

Valassis Trial: Land O'Lakes Exec Says She Wasn't Coerced by News America But Did Overpay

By
Jim Edwards
(MoneyWatch)  Julie Lynn York, a promotions executive at Jack Daniels marketer Brown-Forman and dairy group Land O' Lakes, testified that News America Marketing never coerced her into making newspaper coupon buys, but she did admit over-paying for the agency's services.

The testimony came as News America launched its defense in a Michigan state court case in which rival coupon agency Valassis has accused NAM of using its virtual monpoly in supermarket advertising to force clients to also take newspaper coupon deals.
  • In the case, sources tell BNET that the judge has begun giving his instructions to the jury. Until a verdict arrives, BNET will continue reporting on allegations in the trial about the two agencies and their clients. See note to readers below.
York's testimony was significant because in the first portion of the trial, Valassis had used News America's own clients against it, eliciting testimony to show how unhappy they were that News America bundled its supermarket and coupon offerings together and priced them so that it was too expensive to buy them separately. York was asked:
Q. And did News America resist negotiating these in-store rates separately with Land O'Lakes? A. No, they did not. Q. Did News America Marketing at any time present the in-store FSI prices on a take it or leave it basis to Land O'Lakes? A. Take it or leave it as in you had to buy it all at once or you didn't? Q. Correct. A. No.
She added later:
A. I don't think anybody wants to do business with someone that is forcing them into business.
Valassis made back a little ground on cross-examination by demonstrating to York that she had been overpaying for Land O Lakes' promotions with News America. A Valassis lawyer established that LOL was paying a $5.25 CPM rate for NAM's services. York was then asked:
Q: This is a letter addressed to Wyeth from News America, it says we are confident rates will remain lower than they have in past years as News America is currently offering rates below $4 CPM for ROFR clients, you didn't know that, did you? A. I did know that. What is the date of this, please? Q. 2005. A. I did not know that.
York said she did assume that larger marketers with bigger budgets got cheaper deals because of the bulk rates they could muster. (Note to readers: BNET will break into its delayed-but-chronological coverage of the trial when breaking news happens. We'll continue summarizing trial testimony even after the verdict if needs be.)

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