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industry averages. He asserted that the commission rate paid by
the otros growers for petitioner's services was simply the 10
percent of sales actually paid by those growers to petitioner.
He believed that the fact that petitioner paid a portion of the
commissions to the Canelos growers does not change that fact. He
asserted that petitioner would not have made the payment to the
Canelos growers had petitioner been an independent party
operating at arm's length. Dr. Frisch concluded that the
commission rates paid by the otros growers provide the best
evidence of an arm's-length commission rate for petitioner.
Dr. Frisch stated that petitioner performed essentially the
same functions for the otros growers as it performed for the
Canelos growers. He stated that one difference in the
transactions consisted of the quantities involved--over the years
in issue, the otros growers accounted for approximately 3.3
percent of the total produce sold by petitioner, with the Canelos
growers accounting for the rest. According to Dr. Frisch, the
normal practice for produce distributors was to charge the same
commission to large growers as to small growers. Thus, he
stated, the fact that the Canelos growers were larger than the
otros growers does not imply that they would pay different
commission rates to an unrelated marketer. Consequently, Dr.
Frisch concluded that no adjustment to the otros growers'
commission rate was needed for the difference in volume.
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