Minneapolis, MN, July 26, 2017 – Wholesale grocery supplier SuperValu, Inc. and a plaintiff class of certain retail grocers moved today for preliminary approval of an $8.75 million settlement related to plaintiffs’ claims that SuperValu and C&S Wholesale Grocers, Inc. conspired to allocate customers and territories.
In 2002, SuperValu was C&S’s largest and closest competitor in New England, where C&S was the primary wholesaler. C&S did not compete with SuperValu in the Midwest, where SuperValu was the dominant wholesaler and where Fleming Companies was SuperValu’s main competitor. In 2003, Fleming declared bankruptcy, and C&S announced that it had entered into an agreement to acquire Fleming’s Midwest wholesale grocery distribution business and begin competing with SuperValu in the Midwest. In September 2003, however, C&S and SuperValu entered into an asset exchange agreement in which C&S agreed to transfer Fleming’s Midwest distribution centers and related assets to SuperValu, and SuperValu agreed to transfer its New England distribution centers and related assets to C&S. As part of the written agreement, Defendants agreed not to supply former customers served by the exchanged distribution centers. When negotiating the asset exchange agreement, C&S wrote in an e-mail to SuperValu, for example, that “We are not interested in a transaction that leaves Supervalu in New England. . . . This is the basis of the deal.” After the asset exchange, SuperValu and C&S both closed the exchanged distribution centers and did not attempt to enter into each other’s respective territories – the Midwest for SuperValu and New England for C&S. Plaintiffs allege that SuperValu and C&S entered into a per se unlawful territorial allocation agreement.
The settlement class consists of grocers served out of SuperValu’s Champaign, Illinois distribution center from December 31, 2004 through September 13, 2008 that did not have arbitration clauses in their contracts with SuperValu. Kotchen & Low LLP is co-lead counsel for the class. Litigation against SuperValu’s co-defendant, C&S, is ongoing.