Proactive Investors - Walmart Inc (NYSE:WMT) faces legal challenges from rapper Snoop Dogg over alleged collusion with Post (NYSE:POST) Consumer Brands in sabotaging his entry into the breakfast cereal market, Snoop Cereal.
A lawsuit from Snoop and fellow hip-hop veteran and businessman Master P was filed on Tuesday, accusing the "diabolical actions" aimed at ousting Broadus Foods, dubbed the first Black-owned cereal company in the US, from competitive standing.
According to the plaintiffs, Post Consumer Brands, after a failed buyout attempt, conspired with Walmart to falsely list Snoop Cereal as 'out of stock', effectively barring it from store shelves.
Broadus had partnered with Post for the production and distribution of Snoop Cereal, aiming to provide affordable breakfast options and establish a high-profile minority-owned brand, but the rappers claim the manufacturer and distributor "had no intention of treating Snoop Cereal equally as its own brands".
The complaint outlines a series of grievances, including Post's alleged "vague chargebacks" and inflated production costs, alongside Walmart's pricing of the cereal at over $10 a box, contrary to Broadus Foods' mission of affordability.
Also, as the rappers refused to sell Snoop Cereal to Post, the cereal maker "entered a false arrangement where they could choke Broadus Foods out of the network, thereby preventing Snoop Cereal from being sold or produced by any competitor".
Walmart was accused too, with the complaint alleging that it "furthered this arrangement by taking on a few of the products but not providing a location for those products on their shelves. This has permitted Post to profit from their own cereal brands while keeping a competitor from having their products on the shelves."
Civil rights attorney Ben Crump, representing the rappers, emphasizes their vision for Broadus Foods to promote diversity in the food industry and support charitable causes.
The name Snoop Cereal reportedly had to be redeveloped by Snoop, who was born Calvin Broadus, after another cereal group objected to the name Snoop Loopz.