The Wall Street Journal reports that the United Food and Commercial Workers (UFCW) has come out against the proposed $24.6 billion acquisition of Albertsons by Kroger.
According to the story, the union's president, Marc Perrone, said he was concerned about "a lack of information provided by the companies about the merger, including on potential store divestitures. The labor group is also worried about the viability of stores that could be sold and whether buyers might be saddled with heavy debt loads, he said … UFCW International plans to discuss its concerns with legislators and the Federal Trade Commission, which is reviewing the deal, Mr. Perrone said, and lobby the companies for more information. The union, which represents about 350,000 Kroger and Albertsons workers, expects to discuss with state-level officials how the merger could affect state operations."
The Journal writes that "Kroger said the company is working with regulators to develop a plan for store divestitures to ensure that any divested locations are sold to qualified operators with appropriate management experience and financial stability. The company said it wouldn’t close any stores, distribution centers or manufacturing facilities as part of the deal, or lay off front-line workers from stores that might need to be divested for regulatory approval."
And, the story says, "Kroger and Albertsons have agreed to sell up to 650 stores to secure regulatory approval, according to securities filings. Kroger has said the companies are receiving good interest from prospective buyers on stores they expect to divest."
The UFCW announcement comes as the Economic Policy Institute (EPI) came out with a study saying that if the Federal Trade Commission (FTC) allows the deal to go forward, it will "reduce the number of outside employment options available to workers, lowering grocery store workers’ annual wages by a total of $334 million—about a $450 loss in annual wages per worker."
MNB ran that story yesterday, and it elicited a response from a Kroger spokesperson:
"The report also egregiously ignores Kroger’s public commitment to invest an additional $1 billion to increase wages and expand industry-leading benefits starting on day one following close. This commitment builds on the incremental $1.9 billion Kroger has invested in wages and comprehensive benefits since 2018. Higher wages and more opportunities for our associates would help all grocery workers by raising the bar for compensation in areas in which we operate.”
- KC's View:
I think the UFCW objections, as stated, are a little disingenuous. Kroger and Albertsons may not be providing information that the union agrees with, but I'm not sure they can be accused of not providing information.
I continue to believe that this is all going to come down to how the FTC decides to define competition in a 21st century context. I don't think you can use 20th century constructs, but where the FTC goes on this one is, at the moment, a mystery to me.