Giant workers find ally in Curran Md. attorney general is lobbying FTC to avoid selling stores

Supermarkets

August 15, 1998|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Unionized workers at Giant Food Inc. have an ally in their efforts to keep as many as five Maryland Giant stores from being sold as part of the Landover-based grocery retailer's proposed purchase by Royal Ahold NV.

Maryland Attorney General J. Joseph Curran Jr. said yesterday that his office is lobbying the Federal Trade Commission on behalf of the workers.

He also said consumers don't want the stores closed.

"A store closing can be an economic disaster to the people affected," Curran said. "I've also seen and heard of very strong consumer preference for the Giant."

Royal Ahold, an international food retailer that is buying Giant in a $2.7 billion cash deal announced in May, is awaiting antitrust approval from the FTC.

The sale would make Royal Ahold the fifth-largest U.S. supermarket company and boost its sales to $35 billion from $26 billion last year.

The FTC is reviewing areas in Maryland where Giant competes with Martin's Food Markets, which is owned by another Ahold chain, Giant Food Stores Inc. of Carlisle, Pa.

The FTC's goal is to prevent Ahold from dominating in an area.

Ahold officials reaffirmed yesterday that the FTC will probably direct it to divest about 10 stores, adding that Ahold is identifying potential buyers.

Because of antitrust regulations, the FTC would require that any targeted stores be sold to another supermarket chain rather than closed.

Consumers and the United Food & Commercial Workers Local 27, which represents Giant store workers, have staged protests and written letters arguing that allowing Giant and Martin's stores in Frederick, Westminster, Eldersburg and Bel Air to operate under a single owner would not create a monopoly because of intense competition from other chains.

The attorney general's office, which typically reviews any mergers that can affect the state in terms of competition, jobs or the price of products or services, says it is concerned in the Giant case with more than antitrust issues.

"We're asking the FTC to structure [an approval] in such a way that jobs are protected and consumer preference is given a priority," said Curran, who is seeking re-election to a fourth term this fall.

"There's also a human component, and I'm strongly in favor of the human component being a factor in the decision.

"We've conveyed that to Royal Ahold and Giant and the staff of the FTC."

Buddy Mays, president of Local 27, which represents about 800 Giant workers at stores in the targeted areas, said yesterday that he did not enlist the backing of Curran but expects the office's lobbying to weigh heavily in any FTC ruling.

Besides Curran's office, Mays said, both food companies recently have joined the union in lobbying against divestitures of Giant or Martin's stores.

"Through the efforts of the communities and the consumers, our members and ourselves, both Giant and Ahold and ourselves are lobbying the FTC through antitrust attorneys to not have any divestitures," he said.

"It's a complete disruption to families that live in the area, that have moved to an area to work in an area.

"And the consumer ought to have a choice of where to shop."

Giant Food officials referred all questions yesterday to officials of Ahold USA, who could not be reached for comment on their lobbying efforts.

Royal Ahold, which owns four grocery chains on the East Coast, agreed to buy all of the voting shares of Giant from the 1224 Corp. holding company.

Royal Ahold said yesterday that it has secured about 82 percent of Giant's 60 million Class A nonvoting shares and will extend the original $43.50-a-share offer to Sept. 11.

In its announcement, Royal Ahold said it continues active discussions with the FTC.

Royal Ahold officials said earlier in the week that the company expects FTC approval before the end of the summer.

Anticipating the sale, Giant Food has canceled its annual meeting that had been scheduled for Sept. 10.

Pub Date: 8/15/98

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