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The suit also alleges FCL changed its bylaws “solely with a view to jeopardizing Calgary Co-op’s interests” and has made it economically prohibitive for Calgary Co-op to withdraw from Federated entirely.

The lawsuit is the latest development in an increasingly acrimonious spat between two major Prairie brands. Calgary Co-op, which had sales of $1.3 billion in 2018, said last summer its move to a private grocery supplier — which will take effect in April — was necessary due to an increasingly competitive retail environment and the need to provide co-op members with wider product selection and better value.

However, FCL has said it was caught off guard by Calgary Co-op’s decision, which it says resulted in a $400-million reduction in FCL’s revenue. In November, FCL announced the move will force it to close its Calgary food distribution warehouse and lay off more than 200 employees. It said other job losses would take place across the Prairies.

According to Calgary Co-op’s statement of claim, following its decision to switch to Save-On-Foods’ wholesale arm, FCL created a new loyalty program that provides cash to member retail co-operatives who source at least 90 per cent of their goods from FCL and make a commitment to “fully support” the co-op retailing system.

Calgary Co-op alleges it was not consulted or provided any notice about the loyalty program, in spite of being the largest member of FCL. The retailer also alleges the loyalty program payments — which Calgary Co-op isn’t eligible for — will come out of FCL’s general revenues and will therefore reduce the amount of money FCL has available to distribute in fuel patronage returns. Calgary Co-op, which purchased $289 million in fuel from FCL in 2019, will therefore have less money to distribute to its own members via patronage cheques.