Merchandising

Hand sanitizer maker suing Kroger for $85M

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December 8, 2020

The nation's largest grocery retailer, The Kroger Company, is being sued by K7 Design Group for allegedly not accepting delivery of hand sanitizer.

K7 Design group, which is a New York family operation that makes products under the brand of "Ultra Defense," filed an $85 million lawsuit last week in federal court in Cincinnati, Ohio, according to a press release.

"Because Kroger reneged on a purchase order, K7 has been left with a tremendous quantity of hand sanitizer for which K7 has no other use and which it has been forced to store in its overflowing warehouses. And, after it had refused to take delivery, Kroger tried to use its immense market power to force K7 to absorb losses that, both in equity and because of K7 and Kroger's contract, should be borne by Kroger," Andrew Tomback, partner, McLaughlin & Stern, LLP, representing K7, said in the release.

The sanitizer supplier said it was contacted by every major retailer for products as the global pandemic hit the U.S. Kroger placed an order for about $5 million of hand sanitizer, which K7 supplied and then Kroger made a follow up order for over $100 million of hand sanitizer, according to the release.

But Kroger allegedly refused delivery of its second order and refused to pay for or to accept delivery of the vast majority of the hand sanitizer that K7 had manufactured specifically for Kroger, according to the release.

"By the summer of 2020, however, Kroger had fallen behind in taking delivery of the goods it ordered and since then has only fallen further and further behind, leaving K7 with no choice but to file suit against Kroger for the $85 million Kroger owes to K7 on the product Kroger so desperately wanted and purchased in May 2020," stated the release.