Maxim Marketing Corp. on Wednesday filed suit against ConAgra and Trader Joe’s in Los Angeles County Superior Court for breach of contract, intentional interference with contractual relations and violation of California antitrust law.
“The lawsuit alleges that the actions of Trader Joe’s and ConAgra breach a number of their obligations to Maxim and also violated California antitrust law—the Cartwright Act, which allows for treble damages and attorney’s fees,” said Maxim CEO Terry Kroll in a statement. “ConAgra, the international food giant, has devastated my small business, which I started in 1981. Another big player in the food industry, Trader Joe’s Co., is named in the complaint as a partner in the destruction of Maxim’s 25-year business relationship of making peanut butter-filled pocket pretzels for Trader Joe’s.
“Maxim is a small Aliso Viejo, Calif., company with 10 employees. Maxim pioneered the peanut butter-filled pocket pretzel in 1988 and began selling them to Trader Joe’s with an initial 100-case order. For the next 25 years, Trader Joe’s bought the pretzels from Maxim and sold them in its stores. The pretzels became one of the best-selling items at Trader Joe’s.
“That all came to an end in 2013 when ConAgra, which had bought the pretzel company that made the pretzels for Maxim, cancelled its manufacturing arrangement with Maxim. Soon thereafter, ConAgra began selling the identical pretzels—down to the exact same bag—to Trader Joe’s.
“I was certainly surprised by ConAgra’s and Trader Joe’s actions. I have been working in the food industry for over three decades. I was shocked by Trader Joe’s taking part in this plan to destroy a small business. I’ve worked with Trader Joe’s for over 25 years. It made me quite sad because Trader Joe’s used to be a small family-owned business, too.
“While ConAgra and Trader Joe’s may both have reduced their costs by cutting out Maxim as the supplier, the price to consumers of peanut butter-filled pocket pretzels at Trader Joe’s remains the same—$3.79. If there were a cost saving by wiping out Maxim, it has certainly not been passed on to consumers…
“The complaint asks for over $60 million in damages for the destruction of Maxim’s peanut butter-filled pocket pretzel business.”
