Teamsters Urge FTC to Reject Kroger-Albertsons Sale to C&S

International Brotherhood of Teamsters says deal puts members’ jobs at risk

12/12/2023

C&S has said that it's committed to retaining front-line employees.

The International Brotherhood of Teamsters is calling on Federal Trade Commission (FTC) to reject the sale of any assets of The Kroger Co. or Albertsons Cos. to C&S Wholesale Grocers as proposed in the companies' September 2023 divestiture plan. The Teamsters represent more than 22,000 members at Kroger and Albertsons nationwide.

Under its proposed agreement with Kroger-Albertsons, C&S would obtain 413 stores, eight distribution centers and two offices across 17 states and the District of Columbia. The deal includes QFC, Mariano’s and Carrs brand names and the exclusive licensing rights to the Albertsons brand name in Arizona, California, Colorado and Wyoming. C&S would also be able to add five private labels to their current brand portfolio.

"Kroger and Albertsons management has told everyone and anyone that no union members will lose their jobs, contracts or hours if this merger goes through. Those promises mean nothing if they sell parts of either company to C&S," noted Sean M. O'Brien, general president of the Washington, D.C.-based International Brotherhood of Teamsters. "We're not going to let any company put Teamster jobs at risk. Make no mistake — this deal is as anti-union as it gets if C&S ends up owning any part of Kroger or Albertsons."

Under the proposed divestiture plan, the union estimates that 1,200 Teamster jobs would likely disappear in the first weeks and months following the asset transfers, regardless of the eventual buyer. These estimates reflect displaced grocery distribution volume from Teamster-represented distribution centers servicing the remaining Kroger and Albertsons stores to those being sold.

"C&S has driven one grocery business after another into the ground for 30 years. This anti-union company has just one playbook when it comes to acquiring Teamster companies or grocery distribution contracts where our members work: Close it down, bail on pensions, and move the work to one of their nonunion sites," said Tom Erickson, Teamsters Central Region International VP and director of the Teamsters Warehouse Division. "The proposed plan by Kroger-Albertsons is unacceptable and we urge the FTC to reject it."

Founded in 1918 as a supplier to independent grocery stores, C&S now services customers of all sizes, supplying more than 7,500 independent supermarkets, chain stores, military bases and institutions with 100,000-plus products, in addition to operating corporate stores. C&S brings to the deal extensive experience with the merger process, having been an FTC-approved divestiture buyer in prior grocery transactions.

According to the “Food-Retail Competition, Antitrust Law, and the Kroger/Albertsons Merger” report released by the International Center for Law & Economics (ICLE) in October, while C&S is primarily a wholesaler, its Grand Union retail operations and the transition support offered under the divestiture agreement should position it to successfully operate the divested stores. In that way, the divestiture doesn’t just spin off or increase the size of a horizontal competitor. Rather, the plan jump-starts greater vertical integration by C&S, whose wholesale operations include the production of private label products.

During the Groceryshop trade show in September, Kroger Chairman and CEO Rodney McMullen reiterated his confidence in C&S as the right company to do business with. He also stressed that, as part of Kroger and Albertsons’ commitment to labor unions, C&S was one of the few potential buyers that agreed to recognize its labor contracts from day one.

C&S has indeed said that it would continue to recognize the union workforce and maintain all collective bargaining agreements, and is committed to retaining front-line employees.

The agreement is set to close in early 2024.

Cincinnati-based Kroger’s family of companies employs nearly half a million associates who serve more than 11 million customers daily through a digital shopping experience and retail food stores under a variety of  banner names. The company is No. 4 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Boise, Idaho-based Albertsons operates more than 2,200 retail stores in 34 states. The company is No. 9 on The PG 100. PG also named both companies to its Retailers of the Century list. Keene, N.H.-based C&S is No. 17 on The PG 100.