(CN) - Hershey is hurting competition among Southern California's vending-machine operators by offering discounts to its biggest client, one vendor claims in court.
While Canteen Corp. of America is the largest vending machine company in the United States, serving 5 million customers every day from 18,500 client sites, First Class Vending Inc. believes it is just as big in Los Angeles - perhaps the largest vending machine operator in that area, according to its Jan. 22 complaint.
Canteen is not a party to the action, filed in Los Angeles County Superior Court and naming only The Hershey Co. as a defendant.
Bell Gardens, Calif.-based First Class Vending, or FCV, says it buys Hershey's products for resale through Vend Catering.
But Canteen has allegedly been buying its Hershey products for at least the past four years from a distributor called Vistar, enjoying "rebates, discounts and/or allowances substantially in excess of those available to FCV thus placing FCV at a severe competitive disadvantage."
FCV insists that "its volume of purchases from Hershey are (sic) as large, nearly as large or perhaps even larger than its major competitor Canteen."
In addition to destroying competition in the SoCal vending-machine business, Hershey's conduct is causing FCV to reduce prices and operate with lower margins, costing it sales and profits, according to the complaint.
The company seeks damages, restitution and an injunction for Hershey's violation of the California Unfair Trade Practices Act.
It is represented by Maxwell Blecher with Blecher Collins Pepperman & Joye.
The Hershey Co. based in Delaware with headquarters in Hershey, Pa.
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