Stores Suing Supervalu for Alleged Collusion

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Stores Suing Supervalu for Alleged Collusion

Supervalu Inc. is facing a collusion-based lawsuit charging that it conspired with C&S Wholesale Grocers to divide up the regions in which they operate to avoid competing against one another.

Details of the lawsuit, which were revealed in recent published reports, said Mount Vernon, Iowa-based D&G, Inc. filed the case in Wisconsin federal court late last month on behalf of itself and other local retailers. The suit claims that the Minneapolis-based retailer/distributor and Keene, N.H.-based C&S Wholesale Grocers Inc. violated the Sherman Act by conspiring to allocate territories across the country when C&S agreed to not enter the Midwestern market if Supervalu exited New England.

The lawsuit claims a 2003 "asset swap" between the two distributors was "a conspiracy to allocate markets and refrain from competing" in a deal that consisted of Supervalu acquiring C&S' Midwestern retailers and C&S acquiring Supervalu's New England facilities.

After the swap, both companies shut down the acquired distribution facilities and terminated approximately 1,000 employees. D&G alleges that these actions of the two suppliers were an attempt to acquire and maintain monopoly power in regional markets.

According to the suit, the alleged anticompetitive acts forced local retailers to pay more for products because of the lack of competition.