Kroger to Pay $116 Million to Rivals

Kroger Co. is set to pay $116 million to competitors Albertsons and Safeway as part of a mutual-aid pact the three companies set during the 20-week grocery workers strike.

The Mutual Strike Assistance Agreement triggered an antitrust suit from California’s Attorney General in February. That suit continues to move forward.

The retailers agreed before the strike began in October to share sales that any one chain earned during the strike at the expense of the other chains (April PROMO). Albertsons and Ralphs locked out United Commercial & Food Workers members in solidarity with Safeway, and agreed not to cut prices while workers struck Safeway.

Picket lines came down early outside Kroger’s Ralphs stores when striking workers focused on Safeway’s Vons and Pavilion stores and Albertsons. That opened Ralphs to a windfall. It’s unclear how the money will be split, but Kroger will pay its rivals before its fiscal quarter ends April 30, according to Kroger’s April 14 filing with the Securities & Exchange Commission.

The AG’s suit charges that the grocers’ mutual aid pact violates antitrust laws because it included Food 4 Less, a Kroger division not affected by the strike, and the pact extended for two weeks after the end of the strike, enabling grocers to keep prices artificially high to make up for profits lost during the strike.


Kroger to Pay $116 Million to Rivals

Kroger Co. is set to pay $116 million to competitors Albertsons and Safeway as part of a mutual-aid pact the three companies set during the 20-week grocery workers strike.

The Mutual Strike Assistance Agreement triggered an antitrust suit from California’s Attorney General in February. That suit continues to move forward.

The retailers agreed before the strike began in October to share sales that any one chain earned during the strike at the expense of the other chains (April PROMO). Albertsons and Ralphs locked out United Commercial & Food Workers members in solidarity with Safeway, and agreed not to cut prices while workers struck Safeway.

Picket lines came down early outside Kroger’s Ralphs stores when striking workers focused on Safeway’s Vons and Pavilion stores and Albertsons. That opened Ralphs to a windfall. It’s unclear how the money will be split, but Kroger will pay its rivals before its fiscal quarter ends April 30, according to Kroger’s April 14 filing with the Securities & Exchange Commission.

The AG’s suit charges that the grocers’ mutual aid pact violates antitrust laws because it included Food 4 Less, a Kroger division not affected by the strike, and the pact extended for two weeks after the end of the strike, enabling grocers to keep prices artificially high to make up for profits lost during the strike.