MADISON, Wisc. (CN) – The nation’s two largest grocery wholesalers, Supervalu and C&S Wholesale, conspired to allocate territories, restrain competition and inflate prices, according to a federal antitrust class action.
Gary’s Foods claims the defendants competed until 2003, when Vermont-based C&S decided to go after Supervalu territory in the Midwest.
“Rather than extend their competition to the Midwest or continue to compete in New England, the Defendants conspired to allocate territories: Supervalu agreed to
exit New England in return for C&S’s commitment not to enter Wisconsin, Iowa, and other states in the Midwest,” the complaint states. “This scheme 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 two defendants have combined annual revenue of $28 billion, according to the complaint. Gary’s also claims the defendants fraudulently concealed their conspiracy. Gary’s demands treble damages and punitive damages for the class. It is represented by Daniel Kotchen with Kotchen & Low of Washington, D.C.