Gerber, Perrigo must face lawsuit over ‘store brand’ infant formula - U.S. judge

Perrigo

06/02/2024 19:55

By Mike Scarcella
       Feb 6 (Reuters) - Consumer products makers Gerber and
Perrigo  PRGO.N  failed to knock back a distributor's lawsuit
claiming they conspired to curb competition for “store brand”
infant formula sold to retailers including Walmart, CVS and
Target, a federal judge has ruled.
    U.S. District Judge Nina Gershon in Brooklyn said in a
decision on Tuesday that P&L Development could pursue its
lawsuit for now against Nestlé-owned  NESN.S  Gerber and Perrigo
accusing them of violating U.S. antitrust law.
    The judge dismissed related claims against Nestlé S.A. as
falling beyond the court's reach.
    “Store brand” items that carry the logo of a retailer often
are sold to consumers at a lower cost than branded versions. P&L
Development manufactures, packages and distributes store-brand
pharmaceutical and consumer health products to major national
retailers, and it wanted to jump into the market for infant
formula.
    Jonathan Lewis, an attorney for Westbury, New York-based P&L
Development, said the next phase of the case “will further
validate the complaint’s allegations."
    Representatives for Gerber and Perrigo and lawyers for the
two companies did not immediately respond to requests for
comment. The companies have denied any wrongdoing.
    Dublin, Ireland-based Perrigo, according to the complaint,
dominates the U.S. market for store-brand infant formula,
producing such baby food for 68 major retailers. 
    P&L Development, which is family owned and operated, filed
its lawsuit in 2021, asserting that Gerber and Perrigo had a
supply contract agreement between them that could keep out new
entrants from selling store-brand formula to retailers.
    Gerber told the court in a filing that P&L Development was
“disappointed that a supply contract with Gerber never came to
fruition.”
    Gerber and Perrigo “sought nothing more than to comply with
a valid and lawful pre-existing supply contract,” Gerber told
the judge.
    Attorneys for Gerber said such contracts are “normal and
commonplace in commercial business arrangements that serve
legitimate purposes.”
    No trial date has been set in the case.
    
    The case is P&L Development, LLC v. Gerber Products Company
et al, U.S. District Court, Eastern District of New York, No.
1:21-cv-05382-NG-AYS.
    For plaintiff: Jonathan Lewis of Lowenstein Sandler
    For Gerber: Geoffrey Costello of Kelley Drye & Warren and
Carmine Zarlenga of Mayer Brown
    For Perrigo: J. Clayton Everett Jr of Morgan, Lewis &
Bockius

 (Reporting by Mike Scarcella)
 ((Mike.Scarcella@thomsonreuters.com;))