Tortilla Maker Accused of Monopoly

A California man has accused the world’s largest tortilla maker, Gruma Corp., of flattening competitors so that it can jack up the price consumers pay for the Southern California staple.

The Los Angeles Superior Court lawsuit, filed Wednesday, also names the state’s largest grocery chains as co-conspirators in a monopoly scheme that purportedly has forced smaller competing tortilla makers out of the market.

A spokesman for Gruma, the main tortilla provider for Irvine-based fast-food chain Taco Bell Corp. and retailers such as Wal-Mart Stores Inc., could not immediately be reached for comment.

The suit, filed by Martin Diaz of Los Angeles, said Gruma controls more than 90% of the corn and flour tortilla markets in Southern California and has set out to block competition from “mom and pop” operations that gained a foothold in the fast-growing market.

The lawsuit added that the Irving, Texas-based company, whose parent company is headquartered in Mexico, has accomplished this by paying to keep its rivals’ products off store shelves and by gaining control of corn flour supplies.

According to the lawsuit, beginning in 1990, Gruma began paying “millions of dollars” to Ralphs Grocery Co., Vons Cos., Food 4 Less of Southern California Inc. and other grocery chains “to exclude placement of competitors’ tortilla products on supermarkets’ shelves.”

Gruma subsidiaries Mission Foods Corp. and Guerrero Mexican Foods sell tortillas under several brand names, including Buena Comida, Super One, El Ranchito and Calidad, some of which Gruma acquired during a 1980s buying spree.

“Having suppressed competition, the Gruma entities raised prices on their tortillas virtually every year, over at least the past decade, thereby causing injury to plaintiff and virtually every member of the class,” the suit said.

In January, a federal judge in Houston dismissed an antitrust lawsuit brought against Gruma by 17 smaller tortilla makers over the shelf space payments.

Gruma operates the largest tortilla factory in the world in Rancho Cucamonga. Ralphs and Food 4 Less are owned by Kroger Co. Vons is owned by Safeway Inc. A Kroger spokesman declined to comment and a Safeway spokesman was not immediately available.