Haggen, a West Coast regional grocer that just took over the Bend Albertsons Stores as part of an Federal Trade Commission requirement is suing Albertsons.
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The lawsuit, filed Tuesday in federal court in Delaware, accuses Albertsons of anti-competitive practices.
Albertsons also dialed down ad campaigns for some soon-to-be converted stores a few weeks before they were to change hands, undermining customer loyalty, Haggen says. Five are in Oregon with the closest ones are in Klamath Falls and so far the Bend stores haven’t been impacted, but the company left the door open for that possibility.
The Bellingham-based grocer on Tuesday filed a $1 billion lawsuit in the U.S. District Court of Delaware alleging Albertsons used the deal to systematically eliminate Haggen as a competitor.
“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”, according to the complaint.
Many consumers complained about price hikes; in July, Haggen cut back on employee hours and laid off hundreds.
Federal regulators in January ruled Albertsons and Safeway would have to divest 168 stores in order to restore competition with other retailers.
The lawsuit outlines how Haggen executives met with Albertsons counterparts at that company’s headquarters in Boise, Idaho, last November. Instead of focusing on succeeding in the new markets, according to the complaint, “Haggen has had to focus on strategies to recover from Albertsons’ wrongful acts, which include, sadly, Haggen’s efforts to find new jobs for displaced employees who too are victims of Albertsons’ actions”.
Haggen also alleged that Albertsons provided “false, misleading and incomplete retail pricing data, causing Haggen stores to unknowingly inflate prices”, removed store fixtures and inventor from Haggen-acquired stores, diverted Haggen inventory to Albertsons stores, and failed to perform routine maintenance on stores and equipment.
A press release from Haggen summarized the store’s allegations agains Albertsons.
Key to that transition was the implementation of business processing software that would help Haggen get the data it needed. Among the stores are 83 in California, mostly in the south.
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“Had Haggen known Albertsons’ true intentions, Haggen would never have purchased the stores, nor would the FTC have permitted such a purchase”, the lawsuit says.
