On December 31, 2008, Gary’s Foods filed a class action lawsuit against grocery wholesalers C&S and SuperValu, alleging that the two companies violated the antitrust laws by conspiring to allocate territories and to limit competition.
Before the alleged conspiracy began, C&S and Supervalu competed aggressively in New England, where C&S is headquartered and where much of its grocery wholesale business was concentrated. In mid-2003, C&S sought to extend its competition with Supervalu by entering the Midwest. According to the Complaint, prices for wholesale sales and services were higher in the Midwest than in New England, and C&S’s planned entry into the Midwest would have substantially lowered prices to retailers. Rather than competing in the Midwest or continuing to compete in New England, Supervalu and C&S allegedly conspired to allocate the territories: Supervalu exited New England and allocated the territory to C&S in return for C&S’s commitment not to enter the Midwest. The Defendants closed six distribution facilities that had supported the wholesale industry in the Midwest and New England, and thousands of employees lost their jobs.
Gary’s Foods alleges that the collusion has caused substantial harm to retailers: prices for wholesale sales and services have been inflated, fewer manufacturer discounts have been passed on to retailers, and the supply of wholesale sales and services has been artificially reduced.
The law firm representing Gary’s Foods, Kotchen & Low LLP, seeks to recover on behalf of a class of all retail grocers harmed by the Defendants’ scheme. Kotchen & Low partner, Daniel Kotchen, stated, “we conducted a thorough investigation of the business practices of C&S and SuperValu, and believe that a substantial number of retailers have been harmed by the decreased competition between the two wholesalers.”