Supermarket News Senior Editor Bill Wilson recently reported on the class action lawsuit filed against United Natural Foods Inc. (UNFI) by Anapol Weiss, representing NYSM Organics LLC.
Background of the Lawsuit and Allegations Against UNFI
This lawsuit accuses UNFI of systematically and improperly applying prompt-payment discounts on supplier invoices, even when payments are delayed. Wilson’s article, which includes an interview with Anapol Weiss partner Patrick Huyett, provides insight into the legal complaint and the challenges facing smaller suppliers affected by these alleged practices.
The complaint, filed by Anapol Weiss in partnership with Aaron Katz Law and Wagstaff & Cartmell, charges UNFI with two counts of breach of contract, a quasi-contract claim for restitution, and a violation of the Massachusetts Consumer Protection Act. The lawsuit claims UNFI’s practice of taking unearned discounts has created financial hardship for small and emerging suppliers.
The Potential Impact on Small and Emerging Suppliers
Huyett shared with Wilson that some suppliers owe UNFI more in deductions than they receive for their products. “Because of the magnitude of these deductions, what we have discovered is that certain suppliers, especially smaller ones, quickly find themselves in a situation where they owe UNFI more in deductions than UNFI owes them for products,” he explained. The lawsuit further alleges that UNFI takes these discounts despite paying invoices beyond the discount eligibility period.
The complaint also asserts that UNFI benefits financially when smaller suppliers exit the market, as this enables the distributor to charge new suppliers substantial onboarding fees. This case seeks to stop these practices and secure restitution for the affected suppliers.
UNFI must now decide how to proceed, either by responding to each allegation in the complaint or by filing a motion to dismiss.
Read the full article here.
