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Judge Dismisses Claims in Wholesaler Suit

MINNEAPOLIS — A federal judge here has dismissed retailer claims alleging that the 2003 asset swap between C&S Wholesale Grocers and Supervalu violated federal antitrust laws and resulted in inflated prices and fees.

The suit, filed in 2009 by retailers D&G Inc. and DeLuca’s Market Corp., also failed to meet standards for a class-action status, Federal Judge Ann D. Montgomery said in papers filed last week.

C&S, the Keene, N.H.-based wholesaler, in 2003 agreed to swap three Midwest distribution centers and retail supply contracts it acquired from bankrupt Fleming Inc. to Minneapolis-based Supervalu, in exchange for three warehouses and associated supply agreements in New England operated by Supervalu. The agreement included various non-compete provisions.

More news: Supervalu Sells Off Big Chains

D&G, which operates Gary’s Foods, Cedar Rapids, Iowa, argued that the swap agreement prevented the store from using C&S’s market entry as leverage in longstanding dispute over fees with Supervalu, its primary supplier at the time. DeLuca’s, a two-store operator based in Boston, argued that its upcharge fees increased and service decreased when C&S took over distribution to its stores from Supervalu.

The judgment rejected D&G’s argument on the basis that the retailer had practical alternatives to Supervalu even after the asset swap. DeLuca’s complaints amounted to a contract dispute but not anticompetitive behavior, the judge added.

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