Unionized A&P Associates Ratify Contract Modifications

Thirteen locals of the United Food and Commercial Workers (UFCW) International Union have ratified modifications to their collective bargaining agreements with the Great Atlantic and Pacific Tea Co. (A&P). The revised contracts are a key step toward completing the Northeast’s financial restructuring, according to A&P, which, along with its subsidiaries, filed voluntary Chapter 11 petitions a year ago this month.

The locals involved in the negotiations were 1776, 152, 1360, 27, 1034, 1500, 1262, 464, 342, 338, 321, 1245 and UPG. They're located in Connecticut, New Jersey, New York and Pennsylvania. The ratifications took place on Nov. 28 and Nov. 29.

Contract modifications varied according to  local, an A&P spokeswoman explained to Progressive Grocer. She noted that the changes affected the categories of health and welfare, wage accommodations, premium pay and paid time off.

“This agreement with our labor unions marks a significant milestone in our turnaround efforts,” said Sam Martin, president and CEO of Montvale, N.J.-based A&P. “As we position the company to emerge from Chapter 11 early next year with a much stronger financial and operating foundation, we intend to continue making operational and service improvements to further enhance the value and in-store experience we provide to our customers.”

The agreement with A&P’s labor unions is consistent with, and contemplated by, the previously revealed joint financing commitment from The Yucaipa Cos., Mount Kellett and investment funds managed by Goldman Sachs Asset Management. The U.S. Bankruptcy Court for the Southern District of New York granted approval of the investment agreement on Nov. 14, contingent upon the successful resolution of A&P’s negotiations with the locals.

A&P filed a joint plan of reorganization and disclosure statement with the court on the same day. The plan is subject to closing conditions, as well as approval from the company’s creditors and the court. Ratification of the plan by A&P’s creditors will enable the grocer to pay secured lenders in full in cash and fund cash recoveries for general unsecured creditors.

During the exit process, after which the company will emerge as a private entity, A&P expects to continue to carry on business as usual.

This ad will auto-close in 10 seconds