A $25 billion merger that would combine Fred Meyer and Carrs Safeway grocery stores into one corporate monster is being opposed by labor organizations in Alaska.
According to union representatives, the merger between Kroger, the parent company of Carrs Safeway, and Albertsons, the parent company of Fred Meyer, might result in hundreds of job losses, store closures, and lower salaries at two of Alaska’s largest employers.
According to them, unions presently represent workers at all Carrs Safeway locations, but there aren’t many unions at Fred Meyer locations. According to union representatives, this raises concerns about whether a newly combined business will uphold union contracts.
A reduction in competition in Alaska would have negative effects on store prices and food security, according to the unions and U.S. Rep. Mary Peltola, D-Alaska, who recently asked the Federal Trade Commission to prevent the merger.
Last year, a proposed merger between Albertsons and Kroger was announced. The merger of two of the biggest grocery chains in the United States would occur if the FTC approves the agreement. With profits more in line with Walmart and Amazon, it would result in a business with more than $200 billion in annual revenues.
The businesses have stated that they will make investments to enhance the customer experience, lower costs, and raise pay and employee benefits.
In an email statement, a Kroger representative stated that the merger is “about growing jobs and careers.”
One of the largest unionized workforces in America is employed by Kroger firms, according to the statement. In a statement, the company said that the merger “secures the long-term future of union jobs by establishing a more competitive alternative to large, non-union retailers.”
The statement read, “Starting on Day One following close, we will invest an additional $1 billion to increase wages and expand our industry-leading benefits, and we expect to provide new and exciting career growth opportunities for many associates.” “This commitment builds on our history of assisting associates, including the additional $1.9 billion we have invested in salaries and comprehensive benefits since 2018,” the company said.
It was impossible to reach a Carrs Safeway spokesperson for comment.
Will the unions be recognized?
According to state officials, the corporations in Alaska are made up of 12 Fred Meyers and 35 Carrs Safeways. From Fairbanks to Anchorage to the Kenai Peninsula and Juneau in the southeast, the retailers compete in the state’s urban regions, sometimes in close proximity.
Kroger stores and brands may have a significant union presence in other parts of the United States, but not in Alaska, according to Joelle Hall, president of the Alaska AFL-CIO federation of unions.
According to her, unions at Fred Meyer stores are frequently restricted to a small number of specific areas, such as the store’s few butchers. Conversely, she said the Carrs Safeway stores are “wall-to-wall” unionized.
Whether a newly combined firm would uphold the Carrs Safeway union contracts, which guarantee salaries, health benefits, and pensions that sustain families, is unclear, according to Hall.
Will they take the unions into account? At the moment, Fred Meyer fights us valiantly,” she remarked.
“We need to be very careful in Alaska because this merger is about having basically a monopoly on our grocery market, and monopolies generally result in higher prices and lower customer service,” she said. “I don’t believe anyone wants that, but I believe Alaska is particularly vulnerable due to the lack of alternative grocery store options there. You can certainly visit a Walmart or Costco, but there aren’t many conventional grocery stores here.
The 22,000 members of the International Brotherhood of Teamsters, who work in the retailers’ warehouses and other facilities around the country, made their opposition to the merger public in June. The largest grocery workers’ union in the United States, the United Food and Commercial Workers International Union, declared its opposition to the merger in May, citing a lack of openness as well as concerns to employees’ livelihoods that emerge from mergers generally and this one in particular.
According to Alex Baker, vice president of Local 1496 of the United Food and Commercial Workers Union, a merger would result in fewer stores in Alaska, which would be bad for jobs and earnings. According to him, the local in Alaska represents 2,500 workers, many of whom work at grocery stores.
According to experts, in order to maintain competition, the combined chains will probably need to sell off some of their locations in Alaska and other states. However, this raises questions about whether other businesses will be able to successfully compete with them.
Because of the difficult logistics at the tail end of the nation’s supply chain and the small customer base here, Baker said Lower 48 stores are unlikely to grow into Alaska and buy any locations that might be liquidated.
For them, the juice isn’t worth a squeeze, he said.
Approximately 60 employees and 14 delivery drivers are represented by the union at the Carrs Safeway warehouse distribution center in Anchorage, according to Patrick FitzGerald, political coordinator for Alaska Teamsters Union Local 959.
He claimed that with just one food shop, there would be greater staff negligence and less worker protections.
He reiterated worries that, if permitted to happen, a newly combined business wouldn’t honor current union contracts.
Greener pastures are easy to promise now, but after the merger is complete, what will they do with that? Will they follow through on their promises?
According to a Washington, D.C.-based think tank called the Economic Policy Institute, the merger will result in a $334 million overall decrease in annual earnings for the roughly 750,000 grocery store workers, or nearly $450 for each employee.
The two chains are subject to anti-competition concerns, according to Brian Albrecht, an economist at the International Center for Law and Economics, a think tank in Portland, Oregon, but not across the majority of the country as their brands’ activities do not intersect.
According to him, regulators will be thoroughly examining certain markets, like the one in Alaska, to ensure that the agreement takes antitrust concerns, worker concerns, and the state’s particular logistical obstacles into account.
Concerns from the Alaska delegation were expressed by Peltola in her one-page letter to FTC Chair Lina Khan, who stated that the merger will result in a “incredibly concentrated grocery store market” that will reduce the number of stores and jeopardize Alaska’s ability to get food.
Unless the trade commission objects, the merger might be finished in January 2024, according to Peltola’s office.
In a prepared statement released on Friday, U.S. Sen. Dan Sullivan, a Republican from Alaska, said he shared “the concern about how a proposed merger between Kroger and Albertson’s might impact local competition and prices for hard-working families who are trying to make ends meet in the Biden economy.”
He added, “My team and I are closely monitoring the FTC’s investigation and will keep working to protect Alaskans’ best interests.”
Sen. Lisa Murkowski, a Republican from Alaska, has previously stated that the FTC must intervene to block the merger if it will result in higher costs, less competition, or adverse effects on the workforce.
Alaska Department of Law spokesperson Patty Sullivan declined to comment on whether the organization was looking into the planned merger.
“Antitrust investigations in Alaska are confidential, including whether an investigation is even being undertaken,” she stated in an email. The attorney general’s office is committed to zealously upholding Alaska’s antitrust laws, and we are aware of the Kroger-Albertson transaction.