Albertson’s Companies recently settled with the state of California for $4 million to resolve allegations that their banners operating in the state “unlawfully charged customers prices higher than their lowest advertised or posted price” In addition it was alleged that inaccurate weights were printed on labels. The settlement covered 589 stores in California under banners owned by the Albertson’s chain including Safeway and Vons.
The settlement elicited the intervention of Senator Elizabeth Warren (D-MA) and Rep. Adam Schiff (D-CA) who are calling for a federal investigation by the Federal Trade Commission and the Department of Agriculture to determine whether Albertson’s activities represented deceptive acts in violation of Section 5 of the Federal Trade Commission Act and the Fair Packaging and Labelling Act. The initiative by Senator Warren and Rep. Schiff is supported by fourteen members of Congress.
In response Albertson’s Companies stated that they are committed to ensuring that customers pay the lowest advertised prices for products. The Company maintains that they follow local pricing rules and regulations and will correct discrepancies. Albertson’s maintains that it has made changes to reduce the risk of repetition of “errors” relating in overcharging.
It is evident that the recent history relating to Albertson’s in California and allegations raised in the Oregon, Washington and Colorado litigation will influence the final decision regarding the Kroger-Albertsons merger. The results of the November 5th election and the anticipated changes that will take place in the DOJ and FTC may alter the outcome of Federal opposition to the merger of the two pure-play supermarket giants.