posted by
Stacy Jackson
If you haven't already begun thinking about the decision handed down in April on the Feesers, Inc. v. Michael Foods, Inc. & Sodexo, Inc., you may want to start now. Not just start thinking about it, but reviewing with your legal department the ways you have been contracting/pricing. (By the way . . . this litigation started before Sodexo dropped the “h” from their name, thus the old-school spelling in the court documents).
The Feesers ruling is tough for some of us to wrap our minds around since there seem to be potentially precedent-setting implications on how we view competition and price discrimination in the foodservice industry. It’s also an important ruling that may change the way our
ContractPro® users take advantage of potential risk-analyzing features.
I’m no lawyer nor do I have a law degree, but I have done some reading on the case. I can point you to some sources online to help you get background information, but ultimately you should seek your corporate counsel’s advisement on any changes to your contract management practices.
With that said, here are some case points directly from the International Foodservice Distributors Association (IFDA) Decision Summary document (
http://tinyurl.com/IFDAsummary, dated July 8, 2009 (last accessed by this blogger on June 24, 2009):
- Foodservice management companies and foodservice distributors as competitors. See pages 1 – 8 (pretty much the entire document speaks to this concept throughout it’s pages)
- Robinson-Patman Act (RPA) liability and the supply chain (the fact that Sodexo does not purchase directly from Michael Foods was not determinative; Third Circuit Court and US District Court said that adding a link in the supply chain did not remove potential for RPA liability). See page 3.
- Pricing discrimination between foodservice management companies and distributors. See page 3.
- Methods of compliance under the District Court’s orders in this case. See page 4.
- Factual and legal background of the case. See pages 4 & 5.
- Feesers establishment of price discrimination. See pages 5 – 9.
After learning about the ruling and reading a bit more about the data weighed by the judge in making her ruling, we decided to outline several areas of the
ContractPro® solution and
Answers Systems' services that clients have at their disposal, which may help them understand gaps in compliance with the RPA. Currently ContractPro® clients can . . .
- Track committed volume versus actual volume
- Record competitive information when pricing
- Analyze average pricing over a specified period to understand inconsistencies in contracting between distributors and foodservice management companies, as well as GPOs - or between any two entities that may be considered competitors, for that matter
- Archive and pull contracts and associated historical activity on contracts
- Call on dedicated business intelligence staff that can assist in development of special reporting required
In addition to these existing features and services, Answers Systems is beginning to engage our clients’ legal counsel to determine special reporting needs, dashboards, etc. In partnership with legal departments, we hope to help clients understand and monitor risk.
Current customers - if you haven't talked to your legal department about reporting they may need from the ContractPro® solution, we encourage you to do so. Together you can discuss new reporting needs with your Answers Systems representative.
If you aren't a ContractPro® user but would like to know more about how to gain access to these types of key metrics, please contact us to set up a demonstration.
ADDITIONAL READING:
"Private Injunctive Relief Under the Robinson-Patman Act" New York Law Journal, May 19, 2009, http://tinyurl.com/lxoyul
Food and Ag Antitrust Case Update: Feeser's v. Michael Foods
ID ACCESS, “Feesers Wins Price Discrimination Suit vs. Michael Foods, Sodexo”
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