A U.S. judge has mandated Walmart (NYSE:WMT) and Energizer to confront lawsuits filed by consumers and retailers, alleging violations of antitrust laws through a collaborative effort to increase disposable battery prices.
In a ruling on Friday, U.S. District Judge P. Casey Pitts asserted that the plaintiffs in three proposed class actions had reasonably claimed that Walmart, in pursuit of favorable treatment in its stores, exerted pressure on Energizer to inflate wholesale battery prices and prevent other retailers from offering lower prices.
The plaintiffs contend that this alleged conspiracy originated in 2018 and put other retailers in jeopardy of being ostracized by Energizer, the largest U.S. disposable battery manufacturer, if they priced their products lower than Walmart, the world’s largest retailer.
They argue that this collusion resulted in elevated checkout prices for Energizer and Berkshire Hathaway-owned Duracell, which collectively control 85% of U.S. battery sales.
According to the complaints, 24-packs of Energizer Max Alkaline AAA batteries sold at Walmart averaged $16.24 in the summer of 2019, about one-third higher than the previous year.
Judge Pitts, situated in San Jose, California, expressed that the accusations align more with an agreement to fix prices rather than independent decision-making by Energizer, which would typically prioritize lower retail prices for maximum sales.
The judge cited an Energizer sales representative informing the CEO of the plaintiff retailer Portable Power that Energizer’s pricing policies were “1000% about Walmart.”
Energizer declined to comment, citing the ongoing litigation, while Walmart, headquartered in Bentonville, Arkansas, did not immediately respond to requests for comment. Notably, Duracell is not a defendant in this case.
In their attempt to seek dismissal, the defendants argued that Energizer’s decisions to exclusively contract with Walmart and set minimum retail prices to discourage discounting were entirely consistent with rational, unilateral business conduct.
Todd Schneider, legal representation for the plaintiff retailers and some consumers, remarked, “We look forward to bringing this matter to trial.”
The lawsuits aim to secure compensatory and triple damages for violations of federal and state antitrust laws, as well as state consumer protection laws.
The cases in the U.S. District Court, Northern District of California, are as follows: Copeland et al v Energizer Holdings (NYSE:ENR) Inc et al, No. 23-02087; Portable Power Inc v Energizer Holdings Inc et al, No. 23-02091, and Schuman et al v Energizer Holdings Inc et al, No. 23-02093.