Topics: News, Press

Assembly Labor Committee Passes Critical Bill to Protect Grocery Workers in the Wake of Mergers

Sacramento, CA – Today, the United Food and Commercial Workers (UFCW) Western States Council applauded the Assembly Labor and Employment Committee for passing AB 647 (Holden), the Protect Grocery Workers Job Act. AB 647 will protect grocery and pharmacy workers’ jobs by strengthening our existing Statewide Grocery Worker Retention Law and requiring recall and rehiring rights in the case of mergers or acquisitions in the grocery industry. Strengthening recall and rehiring rights will ensure that skilled and trained workers can continue to provide our communities with access to safe food and lessen the economic impact to our social safety net. 

In October 2022, it was announced that Kroger and Albertsons would pursue a $24.6 billion mega-merger, joining together two of the largest grocery chains in the United States. Nationally, these two grocery chains employ over 700,000 workers and operate over 50 manufacturing facilities and 5,000 retail stores. California has more of these two grocery chains than any other state in the country, with Kroger operating approximately 233 stores under the Ralphs, Food 4 Less and Foods Co banners and Albertsons operating approximately 579 grocery stores under the Albertsons, Safeway, Vons and Pavilions banners.

“The effects of mergers and acquisitions ripple across an industry – this is especially true for the grocery industry,” said Amber Baur, executive director, UFCW Western States Council. “Staffing needs will decrease, leading to workers losing jobs, benefits and pensions, worse service and higher bills for consumers, and worse pay, benefits and working conditions for the remaining workers. Stores will inevitably close, leading to communities losing places to buy fresh food and businesses located next to the grocery store losing business. 

“UFCW members won’t let Kroger and Albertsons’ corporate greed put thousands of California’s workers out of a job and leave customers and public programs holding the bill. That’s why we’re proud to sponsor AB 647, a critical bill to strengthen the existing grocery worker retention law and adopt a process for grocery workers to be recalled and rehired. Essential knowledge about the store, customers and communities are lost with job turnover, and our communities depend on these companies. When good jobs are lost, the standard of living goes down for everyone, not just those who lost their jobs. I’m thankful the Assembly Labor and Employment Committee supported the workers and communities that will be the victims in the case of corporate mergers.”

In Los Angeles and Orange Counties alone, 115 of 159 Albertsons stores are within two miles of a Kroger store and are potential targets of closures by the Federal Trade Commission. This could result in an estimated 5,750 jobs being lost in the Los Angeles region alone. It’s clear that a merger between these two companies will result in large scale layoffs for workers, grocery stores closing down, particularly in food deserts and rural areas, increasing food costs, and a reduction in a variety of products, including seasonal, organic, and climate-friendly plant-based foods for consumers.  

“I’ve spent over 30 years working my way up Albertsons’ pay scale,” said Brian Baxley, a produce manager at Albertsons in La Mirada. “If my store is closed because of this merger between Albertsons and Kroger, without protection from the legislature, I’m at risk of losing all that hard work and the benefits I’ve earned. I would have to start over at the bottom, when I should be instead focusing on my retirement. Thank you Assembly Labor and Employment Committee for stepping up and protecting my and my co-workers’ jobs and our communities.”

AB 647 (Holden) is part of UFCW’s legislative package to mitigate the effects of mergers and acquisitions on the retail and grocery industries. The other two bills in the package are: 

  • AB 853 (Maienschein), Californians’ Right to Know on Essential Goods and Services. California residents and workers must have the right to know about proposed mergers in the Grocery and Drug-Retail industries that affect the supply and affordability of food and medicine and the supply of experienced grocery retail workers with knowledge of food safety and licensed pharmacy staff entrusted with supplying safe and accurate medications and clinical services to ailing Californians. AB 853 will require grocery or drug-retail companies to notify the California Attorney General 180 days in advance of finalizing a proposed merger or acquisition and submit an impact analysis report on the impact of the merger or acquisition on communities, such as food deserts, food prices, and access to food, and workers, such as supply of experienced grocery workers, unemployment, wages and benefits and more. 
  • SB 725 (Smallwood-Cuevas), Grocery Worker Safety Net, which requires a grocery establishment who conducts layoffs as a result of a merger or acquisition to provide workers with one-week severance pay for every year of service. Without severance pay protections, the loss of this many jobs in one region will have ripple effects through the local economy and further burden an already tattered social safety net.

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March 22, 2023

Contact: Jenna Thompson, 949.246.1620, [email protected]