Got the following email from an MNB reader:
I loved your conversation about corporate succession plans and the need for accountability on the part of the CEO and the Board in their respective roles. In my work, it’s crucial to be confident in understanding a firm’s succession plan. I can’t count the number of times that in doing due diligence work on a company, or a mutual fund, or the active management of any type of investment vehicle how often we have rejected investing with a firm who can’t clearly define their succession plan.
Responding to our coverage of the proposed Kroger-Albertsons merger, MNB reader Patrick Smith wrote:
I would be surprised if there is not some consternation in management circles of major suppliers. This merger, if it happens, will really tip the balance of power to Kroger and will give manufacturers far less options … Consumer and labor groups may have a silent ally with the largest of food manufactures and processors.
Another MNB reader had a comment about this week's Senate subcommittee hearing:
I'm sure Vivek Sankaran will fight for this with all his heart and soul. He stands to make $50 million from the Albertsons dividend payout according to Forbes (article from October 14, 2022).
In my coverage of the hearing, I wrote:
One person I was really impressed with was Michael Needler, Jr., CEO of Fresh Encounter, a 100-store company who was representing the interests of both his brethren and the National Grocers Association (NGA). He made the point that, as a retailer who has grown his company considerably through the purchase of distressed retail assets, he is "not opposed to growth," and actually is "agnostic" about the Kroger-Albertsons acquisition. However, he emphasized a familiar - and to my mind, legitimate - NGA refrain, that guardrails that should be in place through enforcement of the Robinson-Patman Act are virtually non-existent, and that predatory pricing by power buyers like Walmart, Kroger and Albertsons is a far greater threat to viable competition.
Prompting this email from an MNB reader:
For 25 years I was an attorney at a major consumer products manufacturing company. (Before becoming a lawyer I had some experience at the retail level - independent as well as chain.) While as an attorney in those 25 years, compliance with R-P was not among my responsibilities, I was familiar with the statute and what was happening at ground zero level. To begin with, the statute is subject to some interpretation. The sales people in large measure were reacting to what competitors were offering. The major chains etc. stretch the limits of the statute in their demands. They had to do it because their competitors did. It became a sort of race to the bottom in complying on both sides and the lack of federal enforcement is certainly a factor. Add to that I strongly suspect that more often than not the sales people were making concessions that they never had reviewed. Brokers get involved. The higher ups didn't often get into the details - they just told the sales people to make the numbers or else. R-P covers a lot more than just "pricing". There are many other "incentives and services" that major accounts get that are not offered to independents. R-P covers a lot more than just pricing discrimination. It is not a level playing field out there. Independents survive largely because they have lower overhead.