As this issue of the 99Report goes to press, we are awaiting a critical decision by the Federal Trade Commission (FTC). Will the agency let the $24.6 billion Kroger-Albertsons merger go ahead or will it file a lawsuit to stop it?
We’ve come to this crossroad because on Nov. 15 the companies filed their plan to minimize the effects of the deal on such matters as competition, consumer prices, food deserts, wages and jobs for workers in the retail food industry. From that point, the FTC had 30 days to make its decision.
According to their plan, the companies would sell 413 stores nationwide to C&S Wholesale Grocers if the merger is allowed to go through. C&S currently owns the Piggly Wiggly, Grand Union and Southern Family Markets grocery chains. Some C&S-owned stores have contracts with the UFCW and some don’t, depending on where they’re located.
But this plan to divest stores doesn’t change a thing as far as our union and our allies are concerned. We remain steadfast in opposition.
We’ve learned from experience what can go wrong when one industry giant swallows up another industry giant.
Just nine years ago, when Albertsons absorbed Safeway, Vons, Pavilions and several other chains in a similar merger, it sold 146 stores to Haggen, a regional chain in the Pacific Northwest. That ended in one of the most spectacular business failures in business history when Haggen collapsed within six months. All of Haggen’s stores either closed or were absorbed by other chains, many of them non-union, and thousands of grocery workers lost good union jobs.
Meanwhile, nobody can say with a straight face that consumers benefited from the Albertsons-Safeway deal. Grocery prices haven’t gone down. Quite the opposite!
So, who benefits when these mega-mergers are allowed to go through?
Albertsons’ shareholders already have received a $4 billion dividend for signing off on the proposed merger. We can expect Kroger’s shareholders will benefit as well.
The simple truth is that this merger is motivated by profit. No proposal for divestments can change this fact. The claims made by Albertsons and Kroger that consumers and workers would benefit are false.
As Lina Khan, chair of the FTC, said at a recent forum hosted by UFCW Local 99 (see pages 6-7 for coverage): “Historically, when companies get really big, they have no incentive to fight for your dollar or care about how happy you are on the job. They know you don’t have anywhere else to go.”
Let’s hope the full FTC abides by the words by its leader and sues to stop the merger. If it fails to do so, the UFCW and our supporters in Congress, state governments and the Labor Movement can be expected to step forward with alternate ways to seek fairness for grocery workers and consumers.