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Ocean Spray sued over 'crippling competition'

12-Nov-2002

Last week we reported on the possible downgrade in share ratings for Ocean Spray following the resignation of the cranberry co-operative's CEO. Troubles continue this week with Northland Cranberries, a fellow cranberry grower and producer, together with Clermont, filing a multi-count federal antitrust lawsuit against Ocean Spray.

Citing anti-competitive behaviour, Northland Cranberries alleges that Ocean Spray "has engaged in anti-competitive tactics and unlawfully monopolised the cranberry products industry to the detriment of its competitors and consumers".

The focus of the lawsuit, claims Northland, is Ocean Spray's cartel arrangement with Canadian and other foreign producers designed "to tie up cranberry production and sales of cranberry concentrate, and Ocean Spray's abuse of its dominant position to eliminate its rivals, including Northland and Clermont".

In a statement this week, John Swendrowski, Northland's chairman and chief executive officer, said that the lawsuit seeks to ensure a competitive playing field for cranberry products as well as monetary damages in an amount to be determined at trial.

"Ocean Spray's stranglehold over the production and sale of cranberries and cranberry concentrate in North America has enabled it to stifle Northland and other competitors' efforts," he said.

Strong words indeed, to which he added: "We are unwilling to sit back and watch Ocean Spray carry out its plan to cripple competition in cranberry products through unfair methods.

Virtually everyone in the cranberry business has been negatively affected by Ocean Spray's market manipulation. The victims range from customers and consumers of cranberry products to the growers that have no alternative but to participate in the Ocean Spray cartel or face elimination. This lawsuit is all about creating a fair competitive landscape and forcing Ocean Spray to answer for its practices."

US based Clermont was the second largest cranberry processor in the United States behind Ocean Spray until "Ocean Spray's exclusionary tactics forced it to exit the business in 1999" claimed Northland Cranberries in a statement on Monday.

By all accounts, Northland and Clermont are determined to follow their words through with action. We await to learn the response from the opposing, and recently troubled, camp of Ocean Spray.

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