Topics: News, Press

Bill Protecting Grocery Workers’ Jobs and Communities from Mergers Moves Through Policy Committees

Sacramento, CA – Today, the United Food and Commercial Workers (UFCW) Western States Council applauded the Senate Judiciary 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. 

“I’ve seen firsthand just how mergers hurt workers,” said Robert Launius, a meat cutter at Gelson’s in San Diego and member of UFCW Local 135. “We know what happens when two grocery companies merge: stores close. Our hours get cut. Workers are shuffled from store to store – some losing their seniority, some taking pay cuts, some having to commute hours to work, some never able to find a new job. Like so many others, I rely on this job to give my family what we need to survive – from income to health insurance to retirement. If this bill was law today, we wouldn’t have to live in fear of mergers or acquisitions. We wouldn’t have to worry about our futures, or about the loved ones who rely on us to provide.”

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. 

“Mergers and acquisitions can have a devastating impact on the grocery industry through lost jobs and displaced grocery workers,” said Todd Walters, president, UFCW Local 135. “When workers lose good jobs with community leading wages, it affects the standard of living for everyone in that community. AB 647’s retention and rehiring laws will ensure a grocery store closure won’t devastate our communities while also ensuring customers don’t lose out on years of knowledge about health and safety, food handling and more when a new company comes in.”

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. 

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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July 12, 2023

Contact: Jenna Thompson, 949.246.1620, [email protected]