retail news in context, analysis with attitude

California Attorney General Bill Lockyer announced yesterday that his office will probe the agreement that exists between Southern California's three major supermarket chains - Safeway's Vons, Kroger's Ralphs, and Albertsons - guaranteeing profit-sharing and revenue-sharing in the event of a labor strike.

The agreement has been subpoenaed by Lockyer's office as it works to ascertain whether it violates state and federal antitrust laws.

Details of the agreement have not been disclosed by the chains, though they have acknowledged its existence and have maintained that it is completely legal and proper.

The United Food and Commercial Workers (UFCW) has challenged the propriety of the agreement, which has worked against its ability to divide and conquer in labor talks.

It was on October 11 that union members of the United Food and Commercial Workers (UFCW) union walked off the job at Safeway's Vons and Pavilions units, followed quickly by a lockout of union employees at Kroger's Ralphs units and Albertsons' stores, in what was termed a "show of corporate solidarity."

The face-off is over the union's desire to preserve or improve current wage and benefit packages, while the chains are looking for a wage freeze, cuts to health and pension benefits for current employees and a substantially lower wage and benefit package for new hires. Some 70,000 employees have been affected by the labor action.

Negotiations between the two sides, which so far have been sporadic and unproductive, are scheduled to begin again today.
KC's View:
Not being a lawyer, we're not ready to make a definitive statement on this issue. But it is hard to imagine how three major supermarket chains can agree to share profits and revenue if one of them either benefits or suffers because of a strike or lockout.

But we'll see.