A bid by Kroger to dismiss a lawsuit in the state of Colorado seeking to halt its $24.6 billion merger with Albertsons has been denied.
1. Kroger, Other Grocers Face Mounting Legal Issues
It’s been a short but busy week here at PG, with news of several grocers facing legal issues gaining the most interest from readers. A bid by The Kroger Co. to dismiss a lawsuit in the state of Colorado seeking to halt its $24.6 billion merger with Albertsons Cos. has been denied. The court there believes that since Kroger does business in the state, it is responsible for upholding its monopoly laws.
For its part, Kroger argued that Colorado’s case against it is redundant because it is already facing a similar lawsuit at the federal level. The court, however, disagreed, saying that dismissing the case "would be at odds with numerous rulings recognizing states as co-equal antitrust enforcers.” Kroger CEO Rodney McMullen has vowed that the grocer is ready to fight for the merger in court.
On July 1, U.S. Rep. Jimmy Gomez, D-Calif., sent an oversight request to several government entities, outlining concerns regarding Chedraui/Smart & Final's unfair labor practices and calling for regulatory, legislative or enforcement actions.
The letter comes as the grocery chain plans to close two unionized Smart & Final warehouses in Commerce and Riverside, Calif., terminating more than 600 warehouse workers and forcing them to reapply for employment at $10-$12 less per hour at a new nonunion mega-warehouse in Rancho Cucamonga, Calif. The workers represented by Teamsters Local 630 are currently on strike, protesting the mass layoffs and other practices by the company.
Meanwhile, the U.S. Department of Justice recently revealed that the United States filed a civil lawsuit against Gristede’s Foods NY Inc. alleging violations of the Clean Air Act and the EPA’s Recycling and Emissions Reduction Rule due to the grocer's failure to comply with regulations designed to limit the emission of refrigerants from appliances at its store. To resolve the lawsuit, Gristedes entered into a consent decree that will cost the food retailer millions.
2. Save Mart Acquired By Canadian Group
The acquisition of The Save Mart Cos. by Vancouver, Canada-based Jim Pattison Group made waves this week. The California-based grocer operates the Save Mart, FoodMaxx and Lucky banners in the Golden State and western Nevada, while Jim Pattison Group is the parent company of Pattison Food Group, which operates a number of retail banners including Save-On-Foods and Buy-Low Foods.
Shane Sampson, executive chairman of Save Mart, will remain with the company, along with the rest of the senior leadership team. The grocer’s headquarters will also remain in Modesto, Calif.
“Our primary focus continues to be serving our associates, our customers, and our local communities by providing the freshest quality products at a great value,” a Save Mart representative said in a statement. “Our next chapter is primed for long-term, sustainable growth and innovation and we have full faith in a bright and enduring future.”