Tri-county grocer Haggen suing Albertsons for $1 billion
Regional grocer Haggen filed a lawsuit against Albertsons that seeks $1 billion in damages, the company announced Sept. 1.
Haggen, the chain based in Bellingham, Wash., that recently expanded into the Tri-Counties, alleged that Idaho-based Albertsons hamstrung its expansion by using confidential scheduling information to sabotage grand openings through aggressive marketing campaigns, misleading the company with inflated retail pricing data, cutting off Haggen’s advertising, understocking high-demand inventory and overstocking perishable goods, diverting inventory to Albertsons stores, and failing to perform maintenance on the stores and equipment.
“During the transfer process, Albertsons launched its plan to gain market power and/or monopoly power, acting in a manner that was designed to (and did) hamstring Haggen’s ability to successfully operate the stores after taking ownership,” the complaint reads.
The complaint also states that Albertsons allegedly timed rebranding and aggressive marketing campaigns of its retained stores to slow Haggen’s growth and removed store fixtures and inventory that Haggen paid for.
Haggen recently took over 146 Albertsons and Safeway stores in California, Nevada and Arizona, 20 of which are in the Tri-Counties. It was a part of an antitrust deal between Albertsons and Safeway and the FTC that allowed the company’s $9.2 billion merger, creating one of the largest food retailers in the country with more than 2,200 stores and $61 billion in combined sales, according to the complaint. The merger received regulatory approval in January, a Haggen spokeswoman told the Business Times.
“Albertsons engaged in an illegal campaign against Haggen including premeditated acts of unfair and anti-competitive conduct that were calculated to circumvent Albertsons’ obligations under federal antitrust laws, FTC orders and contractual commitments to Haggen, all of which were intended to prevent and delay the successful entry of Haggen (or any other viable competitor) into local grocery markets that Albertsons now dominates,” the complaint states.
The grocer announced on Aug. 14 that it is closing 16 stores in California, five in Oregon and one in Washington, but the company has not determined how many jobs will be lost.
It is closing four tri-county stores including two in Simi Valley, one in Newbury Park and another in Los Osos. The stores at 660 E. Los Angeles Ave., 5135 E. Los Angeles Ave., 2100 Newbury Road and 1130 Los Osos Valley Road will close in less than 60 days.
“Additional stores may be sold or closed in the future as part of Haggen’s business right-sizing plan,” the company wrote on Aug. 14.
Albertsons also sued Haggen over a $41.1 million payment for inventory.
“Albertsons anti-competitive conduct caused significant damage to Haggen’s image, brand and ability to build goodwill during its grand openings to the public,” the complaint reads. “Albertson’s unlawful acts destroyed or substantially lessened the economic viability, marketability and competitiveness of the (Haggen) stores, depriving consumers in each of the relevant markets the benefits of substantial competition from a new market entrant.”
An Albertsons spokesman said in a statement that the allegations in the lawsuit are “completely without merit.”