National Public Radio pointed to a report by Alfred Lee from Los Angeles Business Journal regarding Trader Joe's alleged patent infringement. Southern California supplier Maxim Marketing is seeking legal action against Trader Joe's for its famous peanut butter pretzels by claiming that it originally invented the product. Maxim has also named packaged food giant ConAgra Foods in the lawsuit. Trader Joe's reportedly pursued a supplier relationship with ConAgra after severing its supplier agreement with Maxim.
Telling Morning Edition host David Greene, Lee said, "They're suing for alleged breach of contract and also alleging the existence of a peanut butter pretzel monopoly. I realize that sounds kind of funny, but this isn't some bite-sized niche, if you will. It's a market worth tens of millions of dollars."
According to the lawsuit, Maxim reportedly supplies $9 million worth of peanut butter pretzels annually, with the specialty grocer selling the popular snacks at a 35% price markup.
Lee said that despite the fact that Maxim has worked with independent manufacturers to be able to supply the lovable snacks for Trader Joe's, ConAgra allegedly bought out majority of the manufacturers who had the capability to produce the peanut butter pretzels in the US. This, said Maxim, was followed by Trader Joe's opting to switch businesses to ConAgra.
NPR sad that Trader Joe's is known to have not been very vocal about its business, and that the privately-held company also did not make any public comments or had responded to the lawsuit in court.
The media outlet said that the lawsuit would most likely not see the light of day, as companies usually have the right to choose its own suppliers. As Maxim is a middle man, it was normal for a business to go straight to the manufacturer to obtain its supplies to cut costs, NPR added. It would be curious on how the court will side with Maxim and determine that there was a breach of contract and a competition issue.
