“ConAgra, the international food giant, has devastated my small business, which I started in 1981,” said Terry Kroll, CEO of Maxim. “Another big player in the food industry, Trader Joe’s Company, is named in the complaint as a partner in the destruction of Maxim’s 25-year business relationship of making peanut-butter-filled pocket pretzels for Trader Joe’s. Maxim is a small Aliso Viejo, California company with 10 employees. Maxim pioneered the peanut-butter-filled pocket pretzel in 1988 and began selling them to Trader Joe’s with an initial 100-case order. For the next 25 years, Trader Joe’s bought the pretzels from Maxim and sold them in its stores. The pretzels became one of the bestselling items at Trader Joe’s.
“That all came to an end in 2013 when ConAgra, which had bought the pretzel company that made the pretzels for Maxim, cancelled its manufacturing arrangement with Maxim. Soon thereafter, ConAgra began selling the identical pretzels – down to the exact same bag – to Trader Joe’s.
“I was certainly surprised by ConAgra’s and Trader Joe’s actions. I have been working in the food industry for over three decades. I was shocked by Trader Joe’s taking part in this plan to destroy a small business. I’ve worked with Trader Joe’s for over 25 years. It made me quite sad because Trader Joe’s used to be a small, family-owned business too.
“While ConAgra and Trader Joe’s may both have reduced their costs by cutting out Maxim as the supplier, the price to consumers of peanut-butter-filled pocket pretzels at Trader Joe’s remains the same: $3.79. If there were a cost saving by wiping out Maxim, it has certainly not been passed on to consumers.
“The lawsuit alleges that the actions of Trader Joe’s and ConAgra breach a number of their obligations to Maxim and also violated California antitrust law; the Cartwright Act, which allows for treble damages and attorney’s fees.
“The complaint asks for over $60m in damages for the destruction of Maxim’s peanut-butter-filled pocket pretzel business.”
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