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Grocery Wholesalers Face Anticompetitive Lawsuit

Grocery wholesalers SuperValu Inc. and C&S Wholesale Grocers face a class action lawsuit alleging the two companies "conspired to allocate markets, customers and territories" in New England and the Midwest for the purpose of "fixing, raising, andmaintaining prices." DeLuca's Corp., a Boston grocer, filed the complaint on June 19.

The complaint contends that in 2003 SuperValu agreed to exit the New England market in exchange for C&S's agreement to refrain from competing in the Midwest. As a result, prices in both regions that had benefitted from competition between the two entities have been inflated and supply reduced.

SuperValu is the dominant wholesaler in the Midwest, with 2007 sales of more than $9 billion. C&S reported sales of more than $19 billion in 2007, and is the dominant grocery wholesaler in New England.

SuperValu and C&S previously have referred to the agreement as an "asset swap," in which SuperValu exchanged its New England properties for Midwest distribution center obtained by C&S from another bankrupt grocery wholesaler. DeLuca contends this an inaccurate classification of the move in part because C&S closed the distribution centers received in the swap shortly after the deal was completed.

The class action lawsuit is requesting three times the amount of actual damages that resulted from this anticompetitive agreement. Specific figures were not disclosed.

SuperValu and C&S have 20 days from receipt of the summons to file a response.

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