Please look up, the grocery merger is a threat to the San Luis Valley
I was born and raised in the San Luis Valley, and I’m petrified over what the future holds for my community. If the Federal Trade Commission allows the two largest standalone grocery chains in the country to merge, the combined Kroger (City Market) and Albertsons (Safeway) will present a serious threat to our local economy. It reminds me of the apocalyptic satire, “Don’t Look Up.” In the film, Leonardo DiCaprio and Jennifer Lawrence play astrologers trying to warn the public about a comet approaching Earth. But people are indifferent to the looming threat that will destroy them.
The San Luis Valley has good reason to be alarmed by a nearly $25 billion merger. The new mega company would operate nearly 5,000 stores and 4,000 pharmacies across the country, as well as more than 2,000 fuel centers. It would account for 15.6% of the grocery market share in the U.S., second only to Walmart.
As it begins to dominate the grocery business, this mega company will make it harder for our own workers to put food on the table. I speak from firsthand experience, having worked in every level of the food industry since the age of 16. From the store level at the Safeway in Alamosa to the United Food and Commercial Workers Local 7 union. I also was a fresh fruits and vegetables inspector at the Colorado Department of Agriculture, under the USDA. 80% of my inspections took place in the San Luis Valley.
In “Don’t Look Up,” DiCaprio plays an accomplished astronomer named Dr. Randall Mindy. At one point in the film he says, “We’re gonna get the news out there, one way or another.” And that’s where we are now. My union represents 17,000 grocery workers in Colorado, and 3 grocery stores in Alamosa and Monte Vista. And we are letting the public know this proposed merger will create clear winners and losers. With a $4 billion payout to shareholders by Albertsons in special dividends, a lot of out of state investors will reap the rewards. But everyone else in the San Luis Valley will come out on the losing end of this deal. While our families are poised to suffer if the merger goes through, the company’s top 10 executives could take home as much as $146 million, according to the Securities and Exchange Commission.
When the mega company starts closing stores to consolidate resources and boost earnings, grocery workers will either lose their jobs or be forced to work for a divested non-union store. It wouldn’t be long before their families lose access to good union wages, healthcare benefits and pensions. In a regulatory filing Kroger said divestitures could be as high as 650 stores. City Market and Safeway are some of the biggest employers in our area, and the ripple effect of these closures will be tremendous.
Grocery workers who have retired stand to lose their pensions. If thousands of union grocery workers lose their jobs, they won’t be able to pay into the pension fund. What happens to our senior citizens, if the fund is drastically reduced? Or worse, ceases to exist? A lot of retirees in the San Luis Valley told us, their only means of income is from their pension and social security.
Local farmers and ranchers will suffer as well. These two industries drive the economy in the San Luis Valley, accounting for $340 million of sales each year while providing 18% of the region's jobs. More than 70 varieties of potatoes are grown here, making it one of the main crops in the region. The San Luis Valley is home to over 150 potato growing families who produce over two billion pounds of Colorado potatoes every year.
Right now these farmers and ranchers only receive about 14 cents from every dollar spent on groceries. Increased consolidation in the grocery market has only exacerbated this issue. And if Kroger and Albertsons are allowed to merge, the mega company will probably demand they sell their products for even less. It will cause many family farms to shut down, which in turn impacts hundreds of local food inspectors, warehouse workers and shippers in the agricultural supply chain.
Low-income families will become the final victims of this merger. In an economically poor region — one of every four Valley residents is impoverished, nearly double the rate statewide. A lot of them don't have easy access to transportation, and have to walk to the grocery store. Store closings will create food deserts, denying communities access to nutritious and affordable food. According to an analysis by the Federal Trade Commission, grocery mergers and growing market concentration usually leads to a rise in food prices. And then we all pay the price, every time we go shopping.
Critics have called “Don’t Look Up” a satire, about living in a society that ignores the threat of its own self-destruction, for rich people's short-term gain. But in this case, the Stop the Merger Coalition is sounding the alarm. It includes more than 100 labor, community and farmers groups like the Rocky Mountain Farmers Union. We are urging people to look up, and see this merger for what it is: a way to enrich a select few, at the cost of our local communities. Please contact the Colorado Attorney General’s Office and share your thoughts, and urge the FTC to stop this existential threat to our way of life.
Martin T. Garcia is the Executive Assistant to the President of United Food and Commercial Workers Local 7 Union and Monte Visa native and current resident of Alamosa.