ELIZABETH, N.J. -- A Superior Court judge here has upheld the right of Wakefern Food Corp. here to use the services of a Texas-based private-label food broker and that broker's right to compete with local brokers to represent private-label suppliers in the New York-New Jersey area.
The decision, which involved the issue of preferred -- sometimes called "in-house" -- brokers, could signal a blow to small-sized brokers. Many such firms have argued that distributors that hire preferred brokers force private-label vendors to work with those brokers -- to the possible exclusion of smaller, locally based brokers that have represented their products in previous years.
A similar issue was key to an earlier suit by independent brokers in Idaho against Albertson's, Boise, Idaho, and its private-label broker, Federated Foods, Arlington Heights, Ill.
Galen Watje, the attorney for the nine locally based food brokers who filed the current suit, told SN last week that the plaintiffs plan to appeal the decision. The suit, filed in 1995, claimed that Wakefern and Marketing Management Inc., Fort Worth, Texas, had caused the brokers to suffer economic hardships by deliberately interfering with their existing business arrangements with private-label suppliers and had violated the Robinson-Patman Act by seeking to exclude them as the cooperative's private-label representatives.
Watje previously represented the 13 food brokers in the Boise area, who filed suit in mid-1993 against Albertson's and Federated Foods. That case was settled at the end of 1995.
The brokers that filed the case, all based in New York or New Jersey, were A&D Sales Associates, C&H Sales, Chadlin Enterprises, Entress Co., Herb Greenberg & Sons, Moran Marketing, Reuben Lapidus/Julius Levy & Co./Freedman Co., Pavlak Marketing and Slattery Marketing.
Wakefern contracted with MMI to be its preferred private-label broker in late 1994 as part of an effort to bolster ShopRite brand sales.