San Francisco -- A Bloomberg report on Tuesday said that three major grocery chains may have violated antitrust law by profit-sharing during a strike.
The U.S. Court of Appeals in San Francisco on Tuesday ruled that Safeway, Supervalu Inc.’s Albertson’s and Kroger Co.’s Ralph’s supermarket chains were not exempt from antitrust scrutiny, as a court last year overturned a lower-court ruling that the agreement, reached during a 2003 conflict with the companies’ unions, didn’t violate antitrust law.
“More than a ‘quick look’ is required to ascertain its impact on competition,” according to Tuesday’s ruling.
The grocery retailers 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. The state of California sued the trio in 2004, saying the mutual strike assistance agreement violated federal antitrust laws and led to higher prices.