In BNLfood Investment SARL v. Martek Biosciences Corp., Maryland District Judge William D. Quarles Jr. dismissed BNLfood Investment SARL’s antitrust suit against Martek Biosciences Corp., finding that BNLfood failed to prove that Martek had anti-competitive contracts that prevented BNLfood from entering the U.S. market for baby-food DHA and ARA additives. Belgium-based BNLfood accused its rival, Martek, of “locking up” all the major players in the U.S. baby-formula market by getting them to sign sole-source agreements declaring Martek their exclusive supplier of DHA and ARA. BNLfood also contended that Martek was prompting customers to sign by offering them unusually low prices and then notifying them of price hikes unless they signed a sole-source agreement. BNLfood further claimed that Martek was selling its products at a loss, but Martek argued that the price of the additives was falling due to competition from Chinese companies and other rivals.
In dismissing BNLfood’s suit, the court held that even though a reasonable jury could find that Martek’s sole-source agreements excluded competition, and that potential competitors faced high barriers to entry, including “entrenched buyer preference” for Martek’s products, BNLfood still failed to furnish enough proof to state a claim. According to the court, there were other explanations for why the formula makers had chosen to go with Martek, such as BNLfood’s higher prices, the fact that the company had not completed all the FDA-required clinical testing when it made its overtures to the manufacturers, and the formula makers’ concern that BNL’s products could be allergenic for some babies.