LA councilmembers introduce formal opposition of proposed Albertsons-Kroger merger

LOS ANGELES (KABC) -- Five Los Angeles councilmembers introduced a resolution Friday intended to formalize the city's position against a proposed mega-merger of grocery giants, which would impact 579 stores including 63 locations in California.

During a news conference, Councilwoman Traci Park led her colleagues -- Heather Hutt, Tim McOsker, John Lee and Hugo Soto-Martinez, co-authors of the resolution -- in sending a clear message to the city's federal partners that L.A. is "unequivocally opposed'' to the merger between Albertsons and Kroger. They say the proposed merger is anti-competitive, would lead to higher prices and would undermine workers and communities across the city.

"We're going to oppose this merger because it's bad for our consumers," said McOsker. "It's bad for our constituents. It's bad for our families. It is certainly bad for our workers today and for the workers tomorrow."

The proposed merger has been hit with a number of lawsuits.

Earlier this year, Kroger CEO sent a memo to employees at all of the affected stores notifying them of the plans to spin off the locations to C&S Wholesale Grocers if the merger goes through. All employees are expected to be able to maintain their employment with C&S, officials have said.

Kroger's CEO said there would be no store closures and frontline employees will remain employed if the merger is allowed to happen.

However, the merger is being challenged by the Federal Trade Commission, which claims the proposed $24.6 billion merger would lead to higher grocery prices through a reduction in marketplace competition, and also potentially negatively affect workers.

Kroger has denied such claims, insisting that no stores, distribution centers or manufacturing facilities would be closed, and claiming that "customers will benefit from lower prices and more choices'' through the merger.

Park and her colleagues refuted the company's position.

"Worse, if the merger does succeed, we don't know what will happen to the 14 stores across Los Angeles that are slated to be sold to the C&S Wholesale Grocers,'' Park said. "A chain which has no history of operating supermarkets in Los Angeles.''

The councilwoman has concerns that these stores located in the city may be sold, closed, terminate union labor or that the underlying real estate will be sold for future development.

Of the 14 stores that might be sold from this merger in the city, three are located in Park's 11th District, covering West L.A. and coastal neighborhoods in Westchester, Venice and the Pacific Palisades. Councilwoman Hutt echoed Park's comments, adding that in her 10th District, covering Central L.A. and neighborhoods such as Koreatown, there's an Albertsons located on Crenshaw Boulevard and W. Martin Luther King Jr. Boulevard that she's concerned about.

"I remember when it opened. it was such a big deal to have a beautiful grocery store right in our own community,'' Hutt said. "Hundreds of people use that daily to feed themselves and their family.''

"The rising prices of groceries is hard on all of us. However, as a city, we must work to protect our vulnerable. When two of the largest grocery chains in the country combine their power, our community members suffer,'' she added.

Monique Hightower, an Albertsons clerk and member of the United Food and Commercial Workers Local 770 Union, which represents grocery workers, joined the city leaders to highlight the challenges supermarket employees face.

"If Kroger and Albertsons were allowed to become one big company, it would result in our stores, food and pharmacy-layoffs and higher prices," she said.

She emphasized that the merger is "far from a done deal'' as it faces challenges in court filed by state and federal regulators.

"We have a lot of opportunity to impact, and so we continue this conversation with our federal partners and we'll look forward to the courts intervention with the litigation pieces that have been filed by at least 11 attorney generals here in the United States," said Park.

City News Service, Inc. contributed to this report.