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Haggen Files Lawsuit Against Albertsons for Over 1 Billion Dollars in Damages

Haggen Files Lawsuit Against Albertsons for Over 1 Billion Dollars in Damages


BELLINGHAM, WA
Tuesday, September 1st, 2015

The retail battle between Haggen and Albertsons is heating up.

Haggen filed a lawsuit on Tuesday against Albertsons for over $1 billion, claiming that the supermarket giant sabotaged its expansion into new markets and made misleading remarks to influence its decision to buy more than a hundred Albertsons and Safeway stores.  

Haggen

The lawsuit, filed in a Federal Court in Delaware, professes that Albertsons had engaged in an illegal campaign against Haggen including “premeditated acts of unfair and anti-competitive conduct that were calculated to circumvent Albertsons obligations under federal antitrust laws, FTC orders, and contractual commitments to Haggen, all of which were intended to prevent and delay the successful entry of Haggen (or any other viable competitor) into local grocery markets that Albertsons now dominates.”

The lawsuit also lists several “malicious and unfair actions” that “strained Haggen’s resources” and “created substantial distraction and diverted the attention of store-level and senior Haggen management” during the store conversion process. According to the filing, some of these actions allegedly include:

  • Using proprietary and confidential conversion scheduling information to plan and execute aggressive marketing campaigns intended to undermine Haggen grand openings;
  • Providing Haggen with false, misleading and incomplete retail pricing data, causing Haggen stores to unknowingly inflate prices;
  • Cutting off Haggen-acquired store advertising in order to decrease customer traffic;
  • Timing the remodeling and rebranding of its retained stores to impair Haggen’s entry into the relevant markets;
  • Diverting customers by illegally accessing Haggen’s confidential data to gain an unfair competitive advantage;
  • Deliberately understocking certain inventory at Haggen-acquired stores below levels consistent with the ordinary course of business just prior to conversion, resulting in out of stocks which negatively impacted the shopping experience upon Haggen grand openings;
  • Deliberately overstocking perishable inventory at Haggen-acquired stores beyond levels consistent with the ordinary course of business just prior to conversion such that Haggen had to throw away significant amounts of inventory it paid for;
  • Removing store fixtures and inventory from Haggen-acquired stores that Haggen paid for;
  • Diverting Haggen inventory to Albertsons stores;
  • Failing to perform routine maintenance on stores and equipment.

The move comes at a time when both retailers have been engaged with a legal back-and-forth, the latest of which includes Albertsons’ $40 million lawsuit for past due inventory purchases.

Albertsons made a statement saying that Haggen’s allegations are “completely without merit.”

Haggen made headlines last December when the regional grocer bought 146 Albertsons and Safeway stores in Arizona, California, Nevada, Oregon, and Washington. The decision enabled Albertsons to gain the FTC’s approval of its merger with Safeway, a combination that would create “one of the largest food retailers in the United States, with over 2,200 stores and $61 billion in combined sales,” the complaint states.

The grocer said that Albertsons' anti-competitive conduct caused “significant damage to Haggen’s image, brand, and ability to build goodwill during its grand openings to the public,” noting that these unlawful acts had lessened the economic viability, marketability, and competitiveness of the Haggen stores.

Since the start of its rebranding efforts, Haggen’s stores have faced considerable pressure, including shoppers complaining of high erroneously priced products, cut backs on employee hours, and hundreds of layoffs. Most recently, Haggen said that it would close or seek to sell at least 27 stores.

For now, this retail battle will have to be settled in court. For more on Haggen and Albertsons, stick to DeliMarket News.

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