In Wholesale Grocery Products Antitrust Litigation, Minnesota District Court Judge Ann D. Montgomery granted defendants’ motion for summary judgment, and dismissed the claims of the last two plaintiffs in a suit alleging wholesale grocery suppliers SuperValu Inc. and C&S Wholesale Grocers Inc. conspired to inflate prices by entering into a non-compete agreement. The consolidated antitrust action, filed on behalf of grocery stores in 13 states, alleged that their grocery suppliers, C&S and SuperValu, violated the Sherman and the Clayton Acts by colluding to consolidate regional market power. According to the plaintiffs, C&S and SuperValu exchanged their distribution centers, located in each others’ territories, and then entered into an agreement not to solicit customers of each others’ transferred facilities for five years after the exchange.
In its portion of the suit, plaintiff D&G Inc., claimed that C&S’ absence from the Midwest market allowed SuperValu to inflate prices. The court rejected this argument, holding that although the asset exchange agreement consolidated SuperValu’s market share, D&G’s ability to switch to an alternative supplier after it grew tired of dealing with SuperValu is proof that the agreement did not create the sort of market power that would allow SuperValu to charge higher prices without losing customers.
The other plaintiff, DeLuca’s Market Corp., claimed that C&S had used its newfound market power to decrease the quality of its service and to charge DeLuca’s a higher freight rate than the one DeLuca’s had previously negotiated with SuperValu. The court rejected DeLuca’s argument as well, holding that not only were its claims contract disputes, but DeLuca’s failed to show that C&S’ prices were supra-competitive.