Contractors can't get better deals than distributors, judge rules.
Sodexo and egg/potato supplier Michael Foods have been found guilty of price discrimination by a U.S. District Court. The United States District Court for the Middle District of Pennsylvania found that Michael Foods discriminated against plaintiff Feesers, Inc., a regional foodservice distributor, by charging it higher prices than it charged Sodexo. Sodexo, meanwhile was found to have “unlawfully induced or received such price discrimination in violation of the Robinson-Patman Act.”
The court enjoined Michael Foods from discriminating as to price against Feesers and Sodexo from continuing to receive or induce such price discrimination. Feesers was not seeking any damages, only injunctive relief. The decision ends more than five years of litigation for Harrisburg-based Feesers, which says it brought the lawsuit in order to level the playing field between broadline food distributors like Feesers and food management companies and group purchasing organizations.
“We are very happy with this result,” says Feesers Chairman Lester Miller. “Big food management companies and GPOs like Sodexo were getting unbelievable pricing discounts from suppliers like Michael Foods. The same discounts were not available to independent distributors like Feesers, and many of them were being driven out of business.”
Feesers filed its complaint against Michael Foods and Sodexho on March 17, 2004, in the federal district court in Harrisburg, alleging price discrimination in violation of the Robinson-Patman Act.
Michael Foods and Sodexo countered that Feesers and Sodexo were not in “actual competition” for purposes of the Robinson-Patman Act because Sodexo provides food management services to its customers, whereas Feesers is a food distributor. The court found, however, that both Feesers and Sodexo procure and distribute food for the same institutional customers and thus are in actual competition for the same food dollar.