A labour strike in Oregon and concerns raised by unions around the US cast a shadow over the US Federal Trade Commission's (FTC) hearing on Wednesday 28 August 2024 regarding Kroger Co's proposed acquisition of Albertsons Cos, Bloomberg has reported.
The FTC is seeking to block the deal because it would stifle competition in the grocery store sector, particularly with regards to unionised labour.
Union strike highlights labour concerns
The ongoing strike involving 28 Kroger stores in the Portland area underscores the importance of labour relations in the Kroger-Albertsons merger.
The local union, UFCW 555, is demanding significant wage increases and benefits on par with those offered by Kroger in the Seattle region, despite the lower cost of living in Portland.
Kroger pledges investment while unions are skeptical
According to Bloomberg, Kroger's lead negotiator, Jon McPherson, downplayed the FTC's concerns and gave assurances that the company is committed to investing $1bn annually to improve employee wages.
But Daniel Clay, president of UFCW 555, countered that Kroger has a history of using low wages at geographically disparate stores as leverage during negotiations. He reportedly cited a 2021 strike where Kroger workers secured a $6 per hour wage increase after a one-day strike in Oregon.
Unions wary of C&S Wholesale Grocers
The California chapter of the United Food and Commercial Workers (UFCW) expressed reservations about C&S Wholesale Grocers, the company set to acquire 600 stores as part of the Kroger-Albertsons merger.
UFCW 324 President Andrea Zinder pointed to the challenges faced by workers following the 2015 Albertsons-Safeway merger as a cause for concern.
She mentioned that the California union plans to advise its members to exercise bumping rights to remain with Kroger if the deal goes through, potentially leaving C&S with a less experienced workforce.
Uncertainty for workers and consumers
The FTC hearing and the recent labour actions point to the complexities surrounding the Kroger-Albertsons merger, particularly with regard to labour relations.
The outcome of the FTC's case will have a significant impact on grocery store workers' wages and benefits, as well as the overall landscape of the grocery retail industry.
“Kroger’s merger with Albertsons is inherently pro-union, and we have the track record to prove it. As union membership continues to decline nationwide, especially in the grocery industry, Kroger added more than 100,000 good-paying union jobs since 2012 and invested $2.4bn to grow associate wages and industry-leading, comprehensive benefits since 2018," said a Kroger spokesperson.
"Kroger has committed to build on this work by investing $1bn to raise associate wages and comprehensive benefits and ensuring zero layoffs or store closures related to the merger. Additionally, Kroger, Albertsons and C&S have committed to honoring all current collective bargaining agreements. The only winners if this merger is blocked will be larger, non-unionized retailers who will continue to fight union growth.”
