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Breach of contract suit says Trader Joe's is milking suppliers

Up until last year, National Dairy Products LLC and Dairy Smart Inc. had a working relationship with Trader Joe's, a company with which some Georgia consumers may be familiar. The specialty grocer allegedly broke its contracts with the two companies. This was the impetus for the breach of contract lawsuit the two companies commenced against Trader Joe's.

The two companies were contracted to assist Trader Joe's in keeping up the standards for which it has become known. National Dairy Products LLC handled tastings and worked with ice cream makers to give Trader Joe's the frozen treats it provides to its customers. The company also handled invoicing, made sure the orders were accurate and received by Trader Joe's in a timely manner and in the correct quantities.

Dairy Smart Inc. acted as a broker for dairy items -- such as butter, yogurt and the like -- purchased by Trader Joe's for resale to its customers. The lawsuit accuses Traders Joe's of going to its suppliers and telling them that if they wished to continue working with the company, they should stop working with National Dairy and Dairy Smart and work with Trader Joe's directly. The complaint also claims that one supplier was essentially forced to provide Trader Joe's with a significant discount for its products to remain working with the company.

It will be up to the court to determine whether the claims made in the breach of contract complaint are valid, but only after Trader Joe's is given the chance to contest the allegations. Any Georgia company in Trader Joe's position has the right to defend itself against such accusations. Sometimes, the party filing the complaint may have breached the contract first, causing the other party to terminate it.

Source: foodnavigator-usa.com, "Trader Joe's move to cut out the middlemen in dairy supply chain left key vendor & broker "high and dry," says lawsuit", Elaine Watson, July 11, 2014

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