U.S. Foodservice Agrees to $30M Settlement in Government Pricing Case - Modern Distribution Management

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U.S. Foodservice Agrees to $30M Settlement in Government Pricing Case

The foodservice distributor denies any wrongdoing in five-year-old case.

National foodservice distributor U.S. Foodservice, Rosemont, IL, has entered into an agreement with the Department of Justice to resolve a civil investigation of past pricing practices involving government contracts from 2000 to 2005.  The company will pay a settlement of $30 million.

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The distributor denied any wrongdoing and said that it stands behind its pricing practices.

According to the Wall Street Journal, prosecutors had alleged that the distributor created shell companies to buy food products and then resold those to U.S. Foodservice at a higher price. That was passed along to the U.S. government.

U.S. Foodservice, previously owned by Dutch company Ahold, was sold to two private equity firms – Clayton, Dubilier & Rice and Kohlberg Kravis Roberts & Co. – in 2007.

U.S. Foodservice set up a website dedicated to the settlement at usfoodsettlement.com.

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