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Albertsons, Ralphs, Vons: California Suit Without Merit

LOS ANGELES -Albertsons Inc., Kroger Co.'s Ralphs stores and Safeway Inc.'s Vons said the lawsuit being filed against them today by the California attorney general is without merit, Dow Jones Newswire reports.

The lawsuit charges that a profit-sharing plan between the companies violates antitrust law, and asks a federal court in Los Angeles to block the chains from implementing their so-called mutual-aid agreement.

Attorney General Bill Lockyer said that the grocers' agreement to share costs and revenue during the strike "hurts consumers by discouraging competitive pricing."

The three major grocery chains jointly said they were "disappointed" that Lockyer decided to file the action. They said they cooperated with Lockyer's office during his inquiry and provided him with a copy of the contentious agreement.

Under the pact, which hasn't been publicly released, the three chains share costs and revenue as they collectively bargain with the United Food and Commercial Workers union.

Albertsons, Ralphs and Vons said they entered into this agreement to protect themselves from potential disproportionate losses caused by the union to one employer as compared to another. The grocery chains contend that similar agreements are proper under federal labor policy and not subject to claims of antitrust violations.

Lockyer had intended to file the lawsuit on Friday, but said he was not able to get an extra document accompanying the complaint to the court in time to meet a Friday deadline.

The labor dispute between the chains and the UFCW is now in its fourth month.
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