Topics: News, Press

CA Legislature Agrees: Essential Workers Deserve Protection from Effects of Mergers and Acquisitions

Sacramento, CA – Today, the United Food and Commercial Workers (UFCW) Western States Council applauded the California State Legislature for passing three critical bills, SB 725 (Smallwood-Cuevas), the Grocery Worker Safety Net, AB 647 (Holden), the Protect Grocery Workers Job Act, and AB 853 (Maienschein), Californians’ Right to Know on Essential Goods and Services. Together this package of bills will help mitigate the effects of mergers and acquisitions on the grocery and drug-retail industries.

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. 

A merger between these two companies could result in large-scale layoffs for workers and without 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. In Los Angeles and Orange Counties, 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. 

The three bills in UFCW’s legislative package to mitigate the effects of mergers and acquisitions on the retail and grocery industries are: 

  • SB 725 (Smallwood-Cuevas), the Grocery Worker Safety Net, which requires a grocery establishment who conducts layoffs as a result of a merger or acquisition to provide workers with a one-week displaced grocery worker allowance for every year of service. SB 725 moved to Governor Newsom’s desk September 14, 2023.

“Grocery workers are still feeling the effects of mergers in their industry years later where thousands of them lost their jobs or had to take lower-paying ones to make ends meet,” said Joe Duffle, president, UFCW Local 1167. “SB 725 is vital legislation that will protect workers in case there are bad effects from mergers and give them peace of mind through the allowance that they can pay their rent or put food on the table. Many of these workers live paycheck to paycheck and even one week of lost pay could mean they are in trouble. UFCW members applaud the Assembly for passing this bill and urge Governor Newsom to sign it into law.”

  • AB 647 (Holden), Protect Grocery Workers Job Act. This bill will protect grocery and pharmacy workers’ jobs by strengthening California’s existing Statewide Grocery Worker Retention Law. This 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. AB 647 moved to Governor Newsom’s desk September 14, 2023.

“California’s Grocery Worker Retention Law has been underenforced since it was signed into law,” said John Frahm, acting president, UFCW Local 5. “AB 647 expands the protections the law provides to warehouse workers and ensures that communities won’t lose good jobs if a merger occurs. UFCW members are proud the California Senate stood with us today and urge the Governor to do the same when it crosses his desk.”

  • 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. AB 853 moved to Governor Newsom’s desk September 6, 2023.

“Southern California grocery workers know just how bad mergers and acquisitions can be, from job loss, closures of stores to the leaving of whole shopping centers vacant,” said Andrea Zinder, president, UFCW Local 324. “All of California’s residents deserve to know just how proposed mergers in the grocery and drug-retail industries will affect their lives. AB 853 is a simple, common-sense approach requiring companies to notify the Attorney General and provide an impact analysis. This way California’s decision makers can make an informed decision on the impact of mergers on our state. UFCW members are proud to support this bill and urge the governor to sign it into law.” 

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September 15, 2023

Contact: Jenna Thompson, 949.246.1620, [email protected]