(FORTUNE Small Business) – John Kerry can relate. The Democratic senator from Massachusetts is also a former small business man who ran his own bakery at Boston's Faneuil Hall Market. So when the following tale was told at a hearing of the Small Business Committee last year, Kerry knew it was no pulp fiction.

Seems that a supermarket manager told the maker of a grocery item that he'd be happy to stock the product--if the manufacturer, of course, would take care of the manager's BMW lease payments.

This brand of retailer ransom--known as slotting--is usually more mundane, if no less onerous. Supermarkets charge from $2,500 to $30,000 to allow even one product on their crowded shelves. The charges--albeit legal--create a powerful barrier, strong-arming smaller competitors in particular. And supermarkets wield it ruthlessly, critics say: Company owners fear retaliation if they speak up. When Small Business Committee Chairman Sen. Kit Bond (D.-Mo.) convened the first congressional hearings held on the subject, in 1999, witnesses wore hoods, disguised their voices, and hid behind screens. The Food Marketing Institute, an industry group, says that slotting fees are simply a means to offset retailers' restocking costs.

But slotting has been at the top of Kerry's agenda for the past year, raising hopes among long-beleaguered small manufacturers. FSB talked with Kerry about the probe.

Why are you fighting slotting fees?

I heard stories that I, as a lawyer, understood to be extortion. Even if a manufacturer's product was selling, all that a bigger competitor had to do was offer the retailer more money, and the smaller manufacturer would get squeezed out. I thought that was unfair. So I asked for a study from the General Accounting Office, but the GAO did not get cooperation from large chain retailers.

Why not?

I presume the chains like the practice and don't want to have somebody come in and upset it.

How did the Federal Trade Commission get involved?

We asked the FTC to investigate, and we're waiting for that report, which should be completed later this year.

It seems that people are scared to speak out. Why?

Small manufacturers know that they're going to be out there [in the market] afterward, trying to make things work. And if word spreads from retail establishment to retail establishment ... well, they're scared they'll get blackballed. They're worried about big distributors and retailers shutting them out and raising greater slotting restraints.

Why hold more hearings this year?

At this year's hearing we looked into produce and tried to get a sense of what's happening in the agriculture industry.

Will you propose legislation to stop slotting or regulate it?

I don't want to legislate by shooting from the hip. We still need more information--which we're gathering--so we'll be ready to move if we need to.

The Senate has given the FTC $900,000 to investigate slotting abuses. Is that enough money?

It's enough to get a preliminary understanding. I'd hate to see us have to spend huge amounts more.

So what can small manufacturers do for now? Can they talk in confidence?

Yes. Keep reporting to us. Be in touch with the Senate Committee on Small Business, the FTC, and the GAO. I ask all small businesses affected by the practice to tell their stories if they are interested in getting a fair shot. Without their cooperation, it is next to impossible to identify the practice and determine appropriate intervention. We've proven our ability to maintain your anonymity. Call my "Slotting Hotline": (202) 224-8496, or e-mail John_Kerry@Kerry.Senate.Gov.