Trader Joe’s faces commercial litigation over snack product

Category: Business Litigation

In general, the free market means that companies are allowed to do business with who they want with as minimal restrictions as possible. This is meant to spur competition which will result in increased overall efficiency and productivity in Michigan or in any other market. However, there are times when actions taken by a company can be considered too anti-competitive and therefore a monopoly. Trader Joe’s is now facing a lawsuit alleging it is conducting monopolistic practices.

The lawsuit filed by Maxim Marketing centers on Trader Joe’s peanut butter pretzel product. The plaintiff company alleges that Trader Joe’s has shut out all competition from the niche market. Maxim Marketing claims that it invented the snack product and supplied the defendant grocery company with the snack product for more than 25 years. The product was then sold under Trader Joe’s private label.

However, this all changed when Trader Joe’s decided to switch to ConAgra Foods, which Maxim was subcontracting to create the pretzels for Trader Joe’s. Both ConAgra and Trader Joe’s are being named as defendants in Maxim’s lawsuit. The plaintiff marketing firm claims that Trader Joe’s decision to work directly with ConAgra cut Maxim out of the picture and essentially prevents the marketing firm from continuing to do business.

On the other hand, just like any other commercial litigation lawsuit in Michigan and elsewhere, the defendants will have a chance to defend themselves in the court of law. Each party will have to present their legal arguments in court in order for a judge a make a final ruling. The judge will base his or her decision on the evidence and testimony presented in support of each side’s legal arguments.

Source: WBUR & NPR, Trader Joe’s Caught In Sticky Lawsuit Over Peanut Butter Pretzels, Maria Godoy, Feb. 21, 2014

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