HASTINGS, Minn. (CN) — Walmart and Post Consumer Brands may have forgotten who has his mind on his money and his money on his mind. The cereal and retail giants became targets of a lawsuit Tuesday by Broadus Foods, a cereal brand founded by Calvin Broadus, alias Snoop Dogg, and No Limit Records founder Percy Miller, better known as Master P.
Post, the rappers claim, agreed to produce and distribute their cereal brands under false pretenses.
Snoop Dogg and Master P had created their brands Snoop Cereal (redeveloped after another cereal goliath reportedly objected to “Snoop Loopz”) and Momma Snoop with the explicit objectives of creating a company they could pass on to their children, providing low-income families with affordable breakfast options and providing an example of a high-profile minority-owned brand.
As a result, the rappers say they balked when Post offered to purchase the company outright, but agreed to a partnership where Post would manufacture and distribute the cereals under a profit-sharing agreement, treating Snoop Cereal like one of its own products.
“Unbeknownst to Broadus Foods, Post was not on board with their goals and dreams and had no intention of treating Snoop Cereal equally as its own brands,” the rappers say in their complaint, filed by Minnesota attorney Howard Helgen in Dakota County District Court where Post is headquartered.
“In reality, Post ensured that Snoop Cereal would not be available to consumers or that it would incur exorbitant costs that would eliminate any profit to Broadus Foods,” the rappers say in the complaint. “Essentially, because Snoop Dogg and Master P refused to sell Snoop Cereal in totality, Post entered a false arrangement where they could choke Broadus Foods out of the network, thereby preventing Snoop Cereal from being sold or produced by any competitor.”
The duo, who are also represented by Los Angeles civil rights attorney Ben Crump, point to failures to keep Snoop Cereal in stock at Walmart stores around the country as evidence of this scheme. The cereal was launched in Walmart stores this past July, but the rappers say that within a few months could not be found in many stores.
“Many Walmart stores showed online and in the Walmart employee’s in-store application that Snoop Cereal was sold out or out of stock,” the rappers say. "However, upon further investigation by store employees, each of these stores had several boxes of Snoop Cereal in their stockrooms that were coded to not be put out on the store shelves.”
“Post essentially worked with Walmart to ensure that none of the boxes of Snoop Cereal would ever appear on the store shelves,” they continue. “This automatically resulted in losses to the product which cut into the profits that Broadus Foods was supposed to receive.”
Snoop Cereal had sold well when it was available but failed to reach sales targets in part because it was effectively pulled from the market. the rappers say. They also claim Post had sought “vague chargebacks” from Broadus Foods resulting from the poor sales and say costs for the cereal’s manufacture were “well above what it should cost to produce this cereal.”
Walmart is not off the hook in the rappers’ book, either. “Walmart has furthered this arrangement by taking on a few of the products but not providing a location for those products on their shelves,” they say in the complaint. “This has permitted Post to profit from their own cereal brands while keeping a competitor from having their products on the shelves.”
They also take issue with the retailer’s decision to sell the cereal for over $10 a box, which they said “goes directly against Broadus Foods’ goals of providing affordable food.”
Broadus Foods’ complaint includes claims against Post of breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, breach of contract, fraud, negligent misrepresentation and collusion and conspiracy. Walmart also faces the collusion and conspiracy claim, along with separate claims for aiding and abetting a breach of fiduciary duty and tortious interference with contract and business relations.
Crump issued a brief press release Tuesday morning regarding the suit. “Snoop Dog and Master P founded Broadus Foods with the vision of creating a family-owned company that promotes diversity in the food industry and provides opportunities for minority-owned products,” Crump said in the statement. “Broadus Foods aimed to inspire economic empowerment among minorities and contribute to charitable causes addressing hunger and homelessness.”
Post, Crump added, “allegedly sabotaged the success of Snoop Cereal by preventing it from reaching consumers through deceptive practices.”
Post issued a brief statement on the suit: "Post Consumer Brands was excited to partner with Broadus Foods and we made substantial investments in the business. We were equally disappointed that consumer demand did not meet expectations."
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