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Antitrust Class Actions Claim Energizer, Walmart Artificially Inflated Prices of Battery Products

Post Time:2023-05-04 Source:ClassAction Author:Kelsey McCroskey Views:

Energizer Holdings and Wal-Mart face at least two proposed class actions that allege the companies have artificially inflated wholesale and retail prices for Energizer disposable battery products to above competitive levels.

The antitrust lawsuits say that Energizer and Walmart, staring down “a dismal market outlook for disposable batteries,” agreed as early as January 2018 to participate in an apparent scheme designed to “slow price decline” for certain Energizer battery products. The initiative would allow the companies to charge “supracompetitive” prices and give Energizer disposable batteries and disposable battery-powered lighting products “preferential treatment in Walmart stores,” the cases state.

Energizer, purportedly “under pressure” from Walmart, its biggest customer, agreed to inflate wholesale prices for its battery products for all direct buyers other than Walmart in order to prevent the mega store’s competitors from undercutting its retail prices, the suits claim. This, in turn, allowed Walmart to increase its battery product prices to above competitive levels and thus forced other retailers to charge similarly high prices, the cases explain.

As a result of the foregoing, one complaint adds, consumers were forced to pay inflated prices for Energizer battery products.

The filings allege that Energizer also created a team, known internally as Project Atlas, which “policed” Walmart’s competitors to make sure that they charged “no less” than Walmart’s retail price for battery products and to “discipline those that did.” According to the lawsuits, if another retailer maintained lower prices than Walmart, Energizer would “further inflate the wholesale prices it charged” to that buyer “until it was no longer economically feasible for [it] to compete with Walmart.”

Seemingly in accordance with the defendants’ alleged agreement, Energizer routinely raised wholesale prices for all direct purchasers aside from Walmart, the suits claim. For instance, the company raised the price of its Energizer Max alkaline batteries and Energizer Ultimate lithium batteries by eight percent in 2019, the cases relay. Following this price increase, Walmart raised its retail prices for these products by almost 20 percent by the end of the year, and by nearly 40 percent by 2020, the complaints describe.

As the filings tell it, Energizer also issued similar price increases “at regular intervals” through 2021.

Per the lawsuits, “[in] September and October 2020, Energizer raised prices across its product lines by at least 10%; in April 2021, Energizer raised prices on its MAX line of batteries by at least 10%; and in June 2021, Energizer raised prices across its household battery portfolio by 11%.”

These price spikes are not justified by “other market forces” such as inflation, cost increases or growing demand, the suits argue. According to the cases, the market for disposable batteries is in decline and has “long been predicted” to be “displaced by new technology” or rechargeable batteries, which environmentally conscious consumers prefer.

Not only has the defendants’ alleged anticompetitive agreement forced Energizer’s direct buyers to pay inflated wholesale prices for battery products, it has increased prices at a retail level and “directly harmed consumers” who end up overpaying for these items, the complaints charge.

The plaintiff in one suit is a business called Portable Power, Inc., a California-based retailer and Walmart competitor that has directly purchased products wholesale from Energizer since 2013, the filings relay. Per the lawsuits, Portable Power was “disciplined” by the Project Atlas team in November 2018 because its Energizer headlamps were priced lower than those sold by Walmart. After Energizer apparently received complaints from Walmart about the plaintiff business’s “disruptive pricing,” Energizer allegedly raised its wholesale price for certain headlamps by around 50 to 85 percent in order to force Portable Power to similarly increase its own retail prices to “match or exceed Walmart’s.”

Further, Energizer also “targeted” Portable Power in January 2021 for again undercutting Walmart’s pricing, the cases share. As the complaints tell it, Project Atlas notified the plaintiff business that it was “among the top-ten Amazon sellers ‘in violation’ of Energizer’s ‘pricing policies’—i.e., that Portable Power’s retail prices were below the price floor Energizer had set with Walmart—for December 2020.”

“Energizer also told Portable Power the minimum price it had to charge—Walmart’s price—to avoid being terminated as a distributor,” the filings say.

Notably, an Energizer sales representative revealed in a February 2021 phone call with Portable Power’s CEO that Energizer’s “pricing policies” were “1000% about Walmart” and that “Project Atlas was driving Energizer’s wholesale prices and policing Walmart’s competitors’ prices,” the cases claim.

One lawsuit looks to represent any person or entity that purchased Energizer battery products directly from Energizer in the United States since January 1, 2018.

The other suit aims to cover anyone in Arizona, California, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oregon, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, West Virginia or Wisconsin who indirectly purchased Energizer battery products for personal use at any time since January 1, 2018.