PHILADELPHIA (CN) - The Winn-Dixie grocery chain joined a federal antitrust suit against a mushroom marketing co-op that allegedly controls more than 60 percent of the $800 million mushrooms U.S. consumers buy every year.
Winn-Dixie on Monday joined civil litigation that began in 2006, which claims that dozens of mushroom producers in the Eastern Mushroom Marketing Cooperative colluded to fix prices and limit production, artificially raising the prices of mushrooms by 8 percent.
Trade publications rate Winn-Dixie as the nation's 24th largest food retailer, and the 45th largest retailer overall in the United States. It reported $7.3 billion in revenue in fiscal year 2009. Its corporate parent Southeastern Groceries also owns the Harveys chain.
Winn-Dixie claims that since 2001 the Eastern Mushroom Marketing Cooperative, the lead defendant, has bought up competing farms and sold them at a loss to buyers with property deeds that prevent the buyers from growing mushrooms on the farms.
The Department of Justice sued the co-op and won in 2005, according to the complaint, and U.S. District Court Judge Thomas O'Neill in Philadelphia ordered the restrictions removed from the properties.
Winn-Dixie claims the co-op used $3 million in members' dues in 2001-02 to stifle competing farms in Ohio, Georgia, Texas and Pennsylvania, and reduced the national mushroom output by millions of pounds. It claims the co-op used its vast market power - including 90 percent of the mushroom market in the Eastern United States - to pressure non-EEMC growers to join the organization, by methods that include refusing to sell them mushrooms to meet temporary supply shortages.
Ninety-eight percent of the mushrooms sold in the United States are Agaricus, or "white button" mushrooms, and co-op members control more than 60 percent of them nationwide and 90 percent in the East, according to the complaint.
In 2009, Judge O'Neill dismissed the producers' claims that the deed restrictions and minimum co-op prices fell under the Capper-Volstead Act, which allows agricultural organizations to form trade organizations for the "mutual benefits and members thereof." He found that the inclusion of M. Cutone Chelsea, a food store and not a grower, nullified the group's claim to be solely an agricultural association, according to the complaint.
In November, the producers filed a motion to stay the plaintiffs' class certification.
Winn-Dixie seeks damages conspiracy and attempted monopolization under the Sherman Act, and unlawful acquisition under the Clayton Act.
It is represented by Krishna Narine with Meredith & Narine.
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