Peanut butter pretzels are among the many better snacks that can be found in the aisles of Trader Joe's, but the store is currently being tied into knots over the popular munchies.
According to NPR's food blog, The Salt, Trader Joe's is being sued over its peanut butter pretzels by Southern California company, Maxim Market, who are claiming to be the original creators of the snack.
In the lawsuit, Maxim claims it invented the peanut butter-filled snack back in the early 1980s and have been supplying the grocery chain with the snack, which is sold under the private Trader Joe's label, for over 25 years. In 2011, Trader Joe's cut business ties with Maxim and switched to ConAgra Foods.
Journalist Alfred Lee, who wrote about the lawsuit in the Los Angeles Business Journal, told "Morning Edition" host David Greene that Maxim is suing both Trader Joe's and ConAgra Foods, "for alleged breach of contract and also alleging the existence of a peanut butter pretzel monopoly."
"I realize that sounds kind of funny, but this isn't some bite-sized niche, if you will. It's a market worth tens of millions of dollars," Lee said.
The Huffington Post reported that Maxim sold $9 million worth of peanut butter pretzels each year. It was also reported that the grocery store in return sold the snacks at a gross markup of approximately 35 percent.
According to Lee, ConAgra has bought up almost all the peanut-butter pretzel manufacturing capability in the country. ConAgra bought National Pretzel, Maxim's most recent supplier, and worked out a deal with Trader Joe's to cut Maxim out as a distributor.
"Maxim is a middle man that doesn't own its own factories and ConAgra has bought up most of the peanut butter pretzel manufacturing capability in the United States," Lee explained. "And Maxim is saying that this deal prevents them from essentially doing business."
Trader Joe's, once dubbed "the most secretive retailer in America" by Fortune, is known for cutting out the middleman and partnering with the manufacturers of its own foods.
NPR reported that a judge will determine whether a contract was actually breached and whether the Trader Joe's-ConAgra deal "impedes competition in the peanut-butter pretzel market."
"We pioneered these items," Maxim's owner Terry Kroll told the Los Angeles Business Journal. "We took something from nothing and built it into their top-selling savory snack."
