Gerber and Perrigo Face Lawsuit Over Alleged Price Fixing of Infant Formula

Gerber and Perrigo, two major infant formula manufacturers, have been hit with a proposed class-action lawsuit accusing them of conspiring to artificially inflate prices for store-brand formula sold at retailers like Walmart and Walgreens. The lawsuit, filed in federal court in Alexandria, Virginia, alleges that Perrigo, the nation's top supplier of store-brand formula, illegally agreed with Gerber to block competitors from entering the market.

According to the complaint, Gerber gave Perrigo the "first right of refusal" to its excess formula supply, which a competitor could have used to sell to retailers. The plaintiffs, who are consumers from four different states, are seeking a court injunction to bar any anticompetitive deals between Perrigo and Gerber, as well as more than $5 million in monetary damages.

The lawsuit claims that Perrigo violated antitrust laws by illegally agreeing with Gerber to prevent competitors from cutting into the market for store-brand infant formula. "Gerber agreed to give Perrigo the first right of refusal to Gerber's excess formula supply, which a competitor could have used to sell to retailers," the complaint states.

Why this matters: The alleged price fixing scheme by Gerber and Perrigo could have significant implications for consumers, as it may have led to higher prices for store-brand infant formula. The lawsuit also highlights the importance of fair competition in the market and the potential consequences of anticompetitive practices.

This proposed class-action lawsuit mirrors a separate case against the same companies filed by a potential store-brand competitor, P.L. Development, which a judge recently denied to dismiss. Gerber and Perrigo have denied any wrongdoing, stating that they compete fairly with other infant formula manufacturers.

The consumers who filed the lawsuit are seeking an injunction to ban these alleged anti-competitive deals between Gerber and Perrigo, as well as over $5 million in damages. The case is set to proceed in federal court in Alexandria, Virginia, as the plaintiffs aim to hold the infant formula giants accountable for their alleged price fixing scheme.

Key Takeaways

• Gerber and Perrigo sued for conspiring to inflate store-brand formula prices.
• Lawsuit alleges Perrigo illegally agreed with Gerber to block competitors.
• Plaintiffs seek injunction and $5M+ in damages for alleged price fixing.
• Case highlights importance of fair competition in infant formula market.
• Gerber and Perrigo deny wrongdoing, claim they compete fairly.