Perrigo has agreed to pay $10 million to settle a proposed class action accusing the company of striking an anticompetitive deal with Gerber to maintain a monopoly over store-brand infant formula, according to a motion described this week. The settlement, which still needs a judge's sign-off, would resolve claims brought by consumers who say the arrangement drove up what families paid for formula sold under retailer labels rather than name brands.
Consumer plaintiffs filed the proposed settlement with Perrigo in federal court in Brooklyn, New York, on Tuesday, according to Reuters. The plaintiffs alleged that Perrigo conspired with Gerber Products to block new entrants into the store-brand infant formula market and inflate the prices passed on to consumers, framing it as a scheme to protect Perrigo's position as a top US supplier of store-brand formula. Store-brand formula, sold under a retailer's own label, can cost less than comparable branded products, which plaintiffs' lawyers say made the alleged conspiracy especially costly for budget-conscious families.
Who the Settlement Covers
The deal would cover customers who bought store-brand infant formula manufactured or sold by Perrigo since April 2020, and plaintiffs' lawyers estimate the class could include millions of people across the United States. Law360 reported that the agreement was described in a motion filed in New York federal court on Tuesday, pegging the payout at $10 million to resolve claims that the company cut an anticompetitive deal with Gerber to maintain its market position.
Perrigo has denied any wrongdoing, and the same denial applies to Gerber Products, which is not part of this particular settlement. As part of the agreement, Perrigo said it will cooperate with plaintiffs in their ongoing lawsuit against Gerber, including making its directors, officers and employees available to testify and handing over transaction data relevant to that case.
Limits on Future Dealmaking
Perrigo also agreed to refrain for three years from entering agreements with other infant formula businesses that would limit competition for store-brand formula without a legitimate business reason, a restriction aimed at preventing a repeat of the conduct consumers alleged. The settlement still requires approval by a judge before it can take effect, and the court filings do not specify when that review might occur.
The case is identified as Thomas Conry et al. v. Gerber Products et al. in the U.S. District Court for the Eastern District of New York, though an earlier Reuters report on the litigation in 2024 had identified the matter as pending in the U.S. District Court for the Eastern District of Virginia. Perrigo, which trades under the ticker PRGO.N, separately told investors it expected its infant-formula business to generate about $360 million in 2025 revenue, a figure representing less than 10% of the company's 2024 net sales, per an earlier Reuters report on the company's strategic review of that business line.
