retail news in context, analysis with attitude

In Minnesota, the Star Tribune reports that US District Judge Ann Montgomery has ruled that a "group of independent grocers will not get class-action status to press their antitrust cases against Supervalu Inc. and C&S Wholesale Grocers Inc. over a deal to divide up markets in the Midwest and New England," saying that "the plaintiffs had failed to establish a case that an agreement between Eden Prairie-based Supervalu and C&S, based in Keene, N.H., had caused a common injury to the myriad potential plaintiffs in the class.

The case dates back to 2003, when "Supervalu was looking to divest itself of underperforming retail stores, customer agreements and operating warehouses in New England," and negotiated a deal "in which C&S assigned to Supervalu certain Fleming assets for its Midwest wholesale operations, and Supervalu assigned to C&S its New England wholesale assets and certain retail assets." While the deal did include "a non-compete provision that barred Supervalu and C&S from supplying former customers served from a certain distribution center for two years, and each agreed not to solicit those customers for five years," the two companies maintained that there was no common harm to independent retailers affected by the deal.

A number of retailers disagreed, and filed suit, hoping to get class action status.
KC's View:
The irony, of course, is that, as the story makes clear, one of the things that prompted the deal was rival wholesaler Fleming filing for bankruptcy in 2003 and C&S acquiring some of its assets, which put it in a position to make the deal with Supervalu. And now,, almost a decade later, Supervalu is on the ropes and C&S is said to be one of the companies interested in buying - wait for it - Supervalu's wholesale business.

So Supervalu gets a small win in that it does not have to defend a class action suit. It is a small win, but these days, it'll probably take any wins it can get.

Man, it is like reading one of Ross Macdonald wonderful novels, in which detective Lew Archer generally finds that the mysteries of the present are inextricably linked to the hidden secrets of the past.