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Bloomberg reports that the US Court of Appeals in San Francisco has ruled that Safeway-owned Vons, Supervalu-owned Albertsons and Kroger-owned Ralphs “may have violated antitrust law with their 2003 accord to share profits during a strike,” and said that greater scrutiny is needed to see if the companies’ actions were lawful.

According to the story, “The supermarket companies had argued that the agreement, which called for sharing profits if any of the three were singled out for a strike, wasn’t anticompetitive because it lowered prices for consumers by reducing labor costs.

“California sued the three grocers in 2004, saying the so- called mutual strike assistance agreement violated federal antitrust laws and led to higher prices. A 141-day strike and lockout at the companies’ Southern California stores was the longest in the industry’s history and was mainly over proposals requiring workers to share health-care costs and establish a two-tier pay system.”
KC's View:
Most interestingly, the Los Angeles Times reports that “the court also left unclear what consequences the grocers could face if they reached a similar agreement during any future labor struggles.” Which could be important as the two sides look at a labor situation which could, if not resolved, lead to another strike/lockout.