It’s every American’s birthright: the chance to lug an industrial-sized bottle of ranch dressing across a parking lot to their SUV.
But should they have to go to a big-box store like Costco or Sam’s Club to do it?
A federal judge said maybe not.
Now the Federal Trade Commission is siding with a manufacturer that argues it should be free to refuse to sell its giant packages to smaller grocery stores.
Woodman’s Food Market, a chain with stores in Illinois and Wisconsin, last year sued Clorox in federal court, complaining that Clorox will no longer sell Hidden Valley Ranch dressing and other products in the same cheap, large sizes it sells to Costco and Sam’s Club.
Customers prefer the convenience of the larger packages, which the big-box retailers can sell at a lower unit cost, it said. Sam’s Club, for example, offers a gallon jug of Daily Chef ranch dressing for a penny-pinching $7.17.
U.S. District Judge Stephen Crocker earlier this year denied Clorox’s attempt to toss the case. By declining to sell twin packs of 40-ounce ranch dressing bottles to Woodman’s and instead forcing it to buy single 16-ounce or 32-ounce bottles, Clorox may have engaged in illegal price discrimination that places Woodman’s at an unfair competitive disadvantage, he ruled.
But Clorox has appealed that decision to the Seventh U.S. Circuit of Appeals. And in a court filing supporting that appeal, the FTC writes that “for decades, courts have recognized that manufacturers may decide with whom they will deal and that such choice benefits consumers.”
The law does not “require manufacturers to sell the same package sizes to all buyers who demand them,” it adds.
Clorox stopped selling giant packs of food-storage bags, cat litter, lighter fluid, bleach and salad dressing to Woodman’s in 2014. When Woodman’s sued, Clorox halted the sale of all of its products to Woodman’s in an attempt to render the lawsuit moot.
Woodman’s did not immediately respond to requests for comment on the FTC’s intervention in the case Friday.
But in its original lawsuit, Woodman’s says its stores “have the overall appearance of a warehouse food retailer, with industrial utility display shelves, products displayed on pallets and inventory stacked in shipping boxes” just like Costco and Sam’s Club, which it says are direct competitors.
Some customers will flee Woodman’s thanks to Clorox’s decision, it says. Others “cannot afford to purchase memberships at retailers like Sam’s Club or Costco” and are therefore unable to buy the giant bottles of ranch dressing and lighter fluid they crave, it argues.
Those customers will have to find the cash or endure just having normal-sized Clorox products.
A ruling in the case isn’t expected until the new year, at the earliest.