May 27, 2005

SoCal Unionized Grocers Face AntiTrust Charges

Via Progressive Grocer, we find a revenue-sharing agreement between Albertsons, Kroger, and Safeway is alleged to have been harmful to competition.

The agreement was formed to keep any one company from making money at another one's expense, and to fight anticipated United Food and Commercial Workers union efforts to divide and conquer the chains.

According to the terms of the pact, if any of the stores raised their market share above pre-strike levels, they had to share the resulting profits with the other pact participants, with payments based on a 15 percent profit margin. The profit-sharing provisions of the agreement continued until two weeks after the end of the labor dispute.

I don't think having the attorney general go after them is going to solve anything, since tacit collusion will replace the formal collusion.

Posted by Kevin on May, 27 2005 at 09:19 AM