Energizer, Walmart sued for conspiring to raise battery prices (updated)

Energizer Holdings

29/04/2023 20:18

(Adds Walmart statement in paragraph 6)
    By Jonathan Stempel
       NEW YORK, April 29 (Reuters) - Energizer Holdings Inc
 ENR.N  and Walmart Inc  WMT.N  have been sued by consumers and
retailers in three proposed class actions accusing them of
conspiring to raise the prices of disposable batteries.
    According to complaints filed on Friday, Energizer agreed
"under pressure from Walmart" to inflate wholesale battery
prices for other retailers starting around January 2018, and
require those retailers not to undercut Walmart on price.
    Walmart rivals allegedly risked higher wholesale prices or
being cut off by Energizer, the largest U.S. disposable battery
maker, if they charged less at checkout than Walmart, the
world's largest retailer.
    The scheme resulted in higher prices from Energizer and
Berkshire Hathaway-owned  BRKa.N  Duracell, which together
control 85% of the disposable battery market, that inflation and
changes in demand could not explain, the complaints said.
    Energizer had been trying to recover sales lost in 2013 when
Walmart ended its exclusive battery contract with the retailer's
 Sam's Club unit, and created a team, Project Atlas, that worked
to ensure Walmart's prices would be lowest, the complaints
added.
    Walmart said it takes "allegations like this seriously and
will respond in court as appropriate," in a statement to
Reuters. Energizer did not respond to a request for comment on
Saturday. Duracell is not a defendant.
    The lawsuits, filed in federal court in San Francisco, seek
unspecified compensatory and triple damages under federal and
state antitrust laws and various state consumer protection laws.
They also seek injunctions to block Energizer from tying battery
sales to pricing, and require Energizer and Walmart to
"dissipate" the effects of their anticompetitive conduct.
    According to the plaintiffs, Energizer's share of the U.S.
disposable battery market has risen to more than 50% from 40% in
2018.
    The complaints quote an Energizer sales representative
telling the chief executive of Walmart rival Portable Power Inc,
which had been charging lower prices, on an early 2021 phone
call why Energizer was cutting it off.
    "She admitted that Energizer had adjusted its pricing
policies at Walmart's request, telling him, 'This is 1000% about
Walmart and wanting the best price,'" she was quoted as saying.
    Portable Power is leading the retailers' lawsuit.
    The cases in the U.S. District Court, Northern District of
California, are: Copeland et al v Energizer Holdings Inc et al,
No. 23-02087; Portable Power Inc v Energizer Holdings Inc et al,
No. 23-02091, and Schuman et al v Energizer Holdings Inc et al,
No. 23-02093.

 (Reporting by Jonathan Stempel and Mike Scarcella in New York;
Editing by Andrea Ricci and Leslie Adler)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))