Albertsons Sued by Fellow Grocer Haggen’s for $1 Billion

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Summary: The Pacific Northwest grocer, Haggen, took a big step to enter into the California market but has been hit with prices issues that they claim is the fault of Albertsons.

Haggen, a Bellingham, Wash.-based grocer, is suing Albertsons and its parent company for $1 billion in damages. The grocery store has been struggling after making a big move to the California area from their primary location in the Pacific Northwest.

  

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Haggen’s grew from 18 to 164 stores within months, including 11 stores in Orange County that opened earlier in the summer. They acquired 146 stores when Albertsons and Vons dissociated 168 locations to comply with federal regulators when they merged with Safeway.

The lawsuit claims that Albertsons deliberately “made false representations to both Haggen and the FTC about Albertsons’ commitment to a seamless transformation of the stores into viable competitors under the Haggen banner.” Albertsons says the lawsuit lacks any merit.

The lawsuit continues by stating “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.”

One of the main problems Haggen’s faced with the opening of their new stores. Customers balked at the inflated prices and lack of inventory. The lawsuit alleges that Albertsons was supposed to provide Haggen’s with retail pricing data, which they falsely did, resulting in the severely high prices.

Haggen has been forced to lay off employees from each store and will be closing 27 stores in order to stay afloat. Albertsons has also sued Haggen for $41 million for the inventory left in the stores that became property of Haggen’s.

Source: http://www.ocregister.com/articles/haggen-680412-albertsons-stores.html

Photo: q13fox.com