PORTLAND, Ore. (KOIN) – A local union representing grocery workers endorsed a pending merger on Monday between Kroger and Albertsons, two of the largest grocery chains in the United States.
The United Food and Commercial Workers Union Local 555 -- which represents over 33,000 retail, manufacturing, and health care employees in Oregon, Southwest Washington, Idaho, and Wyoming -- voiced support of the $25 billion merger that would require divestment from local stores.
If the merger is approved by the Federal Trade Commission, the agency would require a significant number of stores to be divested to a third party because of the size of the merged company, the union says.
As part of the merger, C&S Wholesale Grocers, LLC, agreed to buy hundreds of stores and other assets that would need to be divested, with many of the stores located in Oregon, Idaho, and southwest Washington, according to the union.
“After meeting with C&S on the divestitures of stores as part of the Kroger/Albertsons merger, we were pleased to find not only that they understood and liked the grocery business, but also recognized the importance of quality employees to their ongoing success. C&S has the opportunity to bring a long term strategy to a grocery industry focused on the short-term demands of shareholders and private equity investors,” UFCW Local 555 President Dan Clay said.
“Employees of Kroger and C&S will be better off than employees of other potential buyers whose actions never seem to match the image they project publicly. In a refreshing change of pace, C&S seems poised to deliver a much needed fresh perspective for employees and customers alike,” Clay added.
Ann Poff -- the union's vice president, and a Safeway employee -- notes that the parent company of Albertsons, Cerberus, "no longer wants to own" the company.
"It’s foolish to think that stopping this merger means everything will stay the same. Communities in the Pacific Northwest want to know basic goods and services necessary to care for their families are available at a fair price. Forcing Cerberus to continue to own Albertsons isn’t an option. If they don’t sell to Kroger, it will be someone else. Our members would rather work for people who run grocery stores over online or big box retailers. This merger, combined with a significant divestiture to C&S, represents a good outcome for workers caught in the wake of a private equity company that wants to sell Albertsons,” Poff added.
The support from UFCW 555 comes as some lawmakers are challenging the merger, including Washington State Attorney General Bob Ferguson, who filed a lawsuit in January to block the merger -- arguing that the deal would create a near-monopoly and says shoppers could see higher grocery bills.
“This merger is bad for Washington shoppers and workers,” Ferguson said in a January press release. “Free enterprise is built on companies competing, and that competition benefits consumers. Shoppers will have fewer choices and less competition, and, without a competitive marketplace, they will pay higher prices at the grocery store. That’s not right, and this lawsuit seeks to stop this harmful merger.”
In a Feb. 19 press release, Kroger claimed they would not increase prices post-merger, noting the grocery giant decreased prices after previous mergers.
"We believe the way to be America's best grocer is to provide great value by consistently lowering prices and offering more choices. When we do this, more customers shop with us and buy more groceries, which allows us to reinvest in even lower prices, a better shopping experience, and higher wages," said Rodney McMullen, chairman and CEO of Kroger. "We know this model works because we've been doing it successfully for many years, and this is exactly what this merger will bring customers – lower prices and more fresh, affordable choices."
In January, Kroger said they are working with the FTC and attorney's general on the proposed merger and divestiture plan and anticipate the deal to close in the first half of fiscal year 2024.
