From your Union President, Greg Frazier
On October 14, 2022, Kroger and Albertson’s announced the terms to join these companies into a model that would supply 85 million households with services at a price of 24.6 billion dollars. Kroger is still planning to take over Albertson’s operations on a future date still to be announced in 2024. The Federal Trade Commission (FTC) is still actively investigating the proposed terms to determine if anti-trust laws have or could be jeopardized. The FTC has hinted that they may not rule on the potential merger till sometime in the year 2024.
The FTC Chair, Lina Khan, along with various State Attorney Generals in Nevada, Arizona, Colorado, and California have begun holding public forms to hear the public’s concerns and questions pertaining to this mega merger, and to help them in determining their position on the matter. Your Union attended a public forum in Denver, Colorado, on November 1, 2023, which was a large and well attended event. FTC Chair Khan asked if there was anyone at the event that was for the merger, and the packed center went silent with not even one person speaking in favor of the mega merger. The overwhelming concern is what it will do to competition, creating food deserts, employee Union Pension and Health Funds, and reducing hours and benefits for employees and reducing Union leverage at the bargaining table. Here in New Mexico, we have had two of the three previous contracts where Albertson’s took the lead in bargaining due to Kroger tactics at the bargaining table. Currently, these two companies employ more than 710,000 workers in about 5,000 stores with a combined 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies and 2,015 fuel centers across 48 states. This mega merger will quickly put Kroger in the east part of the country where they currently have no footprint. In 2021 the companies on a combined basis delivered $210 billion in revenue, $3.3 billion in net earnings, and $11.6 billion of adjusted EBITDA. Here in New Mexico, we have seen a handful of mergers, and none match the size and scope of this one. The merger is expected to take 18-24 months providing the Federal Trade Commission approves it. The proposed Kroger-Albertson’s merger will have a significant impact on our members and our Union. There is a concern that UFCW members in Texas, New Mexico, Arizona, Nevada, California, Oregon, and Washington will see job loss, due to the heavy overlap of both Companies. This is where the biggest concern comes because the current jobs and benefits may not be duplicated. Historically, mergers have not been kind to UFCW membership in various parts. Last month Kroger and Albertson’s announced that Wholesaler C&S would buy the stores divested, and C&S would honor all Union contracts. Sounds good except C&S is a wholesaler not a retailer, and experts claim the purchase price is low, therefore making it easy for C&S to easily sell off the property later. In addition, C&S may not be purchasing the data that companies rely on to compete and operate in the community. So, C&S may sound good, but the concern is they will not be a productive and profitable chain. The industry has become more and more consolidated as the influx of private equity has overtaken true supermarket operators. Seeking to maximize profits, industry consolidations have resulted in widespread assist spinoffs and labor cost cuts that have made our members’ jobs harder both in pay and labor. As in the past, our Union’s voice has been excluded from these merger discussions. Fortunately, with a pro-labor administration in various parts of the country and considerable political scrutiny placed on Kroger and Albertson’s since their announcement, the UFCW can utilize and influence. Our UFCW International Union has made repeated calls for transparency from the companies to secure critically important information needed to navigate this situation. Pension benefits and to maintain those contributions for whoever purchases these divested sold off stores are very important and significant. Our International Union must consider and prepare for every outcome and the impact it would have on members in all states. The UFCW International has advised each local Union that they adamantly oppose any proposed merger that harms our members and will use every tool and resource at their disposal. Our UFCW International has engaged its own legal, financial, and antitrust experts to review information provided by the companies and map out innovative ways to protect members. The proposed merger process will take considerable time, and our Union will be working diligently every step of the way to chart the best course of action for all our members across the country. It looks like this will be a big event in 2024 if it goes through or if it is rejected by the FTC.
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AuthorGreg Frazier, President Archives
December 2023
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