Thread regarding Safeway Inc. layoffs

Haggen sues Albertsons for $1 billion over grocery deal


By The Associated Press


BELLINGHAM, Wash. >> Haggen, a Washington-based grocer that exploded in size when it purchased more than 140 former Albertsons and Vons supermarkets this year, is suing Albertsons for more than $1 billion, alleging the company undermined its efforts to succeed in five states.

The lawsuit, filed Tuesday in federal court in Delaware, accuses Albertsons of engaging in anti-competitive practices. Haggen, based in Bellingham, Wash., says it was forced to lay off hundreds of workers and close nearly a fifth of the stores it had acquired from the two supermarket chains.

The closures include two Simi Valley locations and another supermarket in Santa Clarita.

Haggen’s expansion came about through the merger of Albertsons and Safeway. Cerberus Capital Management, the private investment company that owns Albertsons, received approval from the Federal Trade Commission in January to buy Safeway (Vons’ parent company) for about $9.2 billion.

In order to comply with antitrust laws that seek to preserve industry competition, Albertsons and Safeway had to shed a total of 168 stores. Haggen scooped up 146 of them, including 83 California locations.

But things quickly took a turn for the worse, according to the lawsuit.

“During the transfer process, Albertsons launched its plan to gain market power and/or monopoly power, acting in a manner that was designed to (and did) hamstring Haggen’s ability to successfully operate the stores after taking ownership,” the complaint said, adding that Haggen was “forced to close 26 of the stores that it newly acquired as a part of the Albertsons’ divestiture, and faces the potential closure of additional stores.”

The lawsuit says Albertsons gave it misleading and incomplete retail-pricing data, causing it to unknowingly inflate prices. Albertsons also allegedly accessed Haggen’s confidential data to get the upper hand.

Albertson’s anti-competitive actions, the complaint said, critically damaged the operations, customer service, brand goodwill and profitability of the divested stores from the outset,” hurting local communities, employees and consumers throughout California, Oregon, Washington, Nevada and Arizona.

In an emailed statement, Albertsons spokesman Brian Dowling said “the allegations in the lawsuit are completely without merit.”

Staff writer Kevin Smith contributed to this report

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