UFCW speaks for members in supermarket merger
by President Mark Ramos
The proposed merger between Albertsons Companies Inc. and the Kroger Family of Companies raises legitimate questions among our members about how a merger might affect their union contracts and jobs throughout the industry.
There is no denying the sheer size of this merger, should federal regulators allow it to proceed. Kroger, owner of the Ralphs and Food 4 Less chains in Southern California and a host of other chains from coast to coast, is the largest supermarket operator in the United States, with 420,000 employees working at more than 2,700 locations. Albertsons is the second largest, with 290,000 employees at 2,300 stores nationwide, including Albertsons, Pavilions and Vons outlets in Southern California.
All told, the deal is estimated to be worth $24.6 billion.
The regulatory hurdles are significant, so there’s a good chance the regulators in Washington, D.C., won’t allow it to go through. The current administration in Washington, D.C. is much more concerned than the previous administration was about concentrating too much marketing power in a single company.
While Kroger and Albertsons insist that grocery prices would go down due to efficiencies of scale, we know from prior experience that the opposite result is more likely. Reduced competition would mean even higher prices for consumers than they’re already paying.
What’s more, the two companies have stores in overlapping territories, many of which are within a few blocks of each other. A merged company probably would need to sell off as many as 375 of those stores to a third party or form a spinoff company that would operate them.
Many of our members have been through similar situations before. We remember all too well what happened when Albertsons acquired Safeway back in 2014. To appease the regulators, the merged company sold 146 Albertsons, Pavilions, Safeway and Albertsons stores to a small Northwestern chain called Haggen. While Haggen was a well-meaning union employer, it botched the expansion and was forced to declare bankruptcy within a year, causing thousands of workers to lose their good union jobs.
The UFCW is determined that this sort of thing won’t happen again. We are making our position clear to regulators and to our friends in Congress that this merger must not be allowed to proceed without a full investigation into its impact on consumers and workers.
Our concerns were heightened when Albertsons announced it would pay out $4 billion in dividends to its shareholders, threatening to hollow out the company and make it unable to compete with Kroger if the merger is not allowed. The payout also might endanger Albertsons’ commitment to pay billions into its workers’ pension funds. Unfortunately, federal courts allowed this unfair cash grab to proceed over our objections.
Time will tell what will come of this massive merger proposal. In the meantime, our union will continue to work tirelessly to protect our members’ wages, benefits and workplace standards. Any combined entity would be obliged to respect all current contractual agreements with Local 1428 and our UFCW allies in the region.
Whatever happens, we expect the employers will continue their relationships with our union. They cannot make any changes on matters affecting member work conditions without the agreement of our membership.
The members of UFCW Local 1428 can feel assured that their union will stand up for them in every way possible. Always.
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