LOS ANGELES -- Thirteen food brokers have filed suit in Superior Court here against Rite Aid Corp., charging the drug store chain is attempting to interfere with existing contracts and to capture the compensation paid to them by the manufacturers they represent.
Wakefern Food Corp., Elizabeth, N.J., on similar grounds -- neither of which was decided in the plaintiffs' favor.
Rite Aid, based in Camp Hill, Pa., operates about 4,000 drug stores in the United States. Chain officials could not be reached for comment last week.
According to the suit, Rite Aid said last fall it would make all purchases directly after Jan. 1 by dealing only with manufacturers or other vendors and ceasing to deal with brokers or other manufacturer representatives. The suit says Rite Aid has admitted that eliminating the reps would enable the company to capture the commissions that would otherwise be paid to the reps, thereby resulting in a cost savings for the chain.
The brokers filing the suit -- who said they represent small manufacturers, usually with annual sales under $10 million -- claim Rite Aid's conduct is unethical and violates federal and state laws prohibiting large retailers from using their buying power to extract compensation paid to the sellers' sales agents in the form of price reductions.
