Only seven months after acquiring 146 grocery stores from Albertsons, Haggen has accused the grocery chain of attempting to eliminate it as a competitor by hamstringing its ability to successfully operate the stores.
Albertsons divested the stores in January after regulators raised antitrust concerns over its merger with Safeway. The deal enabled Haggen to expand from a small chain with only 18 stores in Oregon and Washington.
But Haggen’s rollout in its new markets has been dogged with pricing and other problems, forcing it to lay off employees and close 27 stores. Albertsons sued Haggen last month, claiming it has failed to pay for millions of dollars of inventory.
In a $1 billion lawsuit filed Tuesday, Haggen said Albertsons had engaged in “coordinated and systematic efforts” to prevent Haggen from competing in grocery markets it dominates, inflicting “severe brand, reputational, and financial harm on Haggen.”
Albertsons “act[ed] in a manner that was designed to (and did) hamstring Haggen’s ability to successfully operate the stores after taking ownership,” the suit alleged.
Among other things, Haggen said, Albertsons provided it with inaccurate, incomplete, and misleading price information about products in divested stores, “causing Haggen to tag products with inflated prices and causing customers to conclude that Haggen was price gouging on products that, just 48 hours earlier, had been priced much cheaper.”
When Haggen’s first California stores opened in March, about 1,000 items — or about 2.5% of a store’s products — were erroneously overpriced at 10 supermarkets in Los Angeles, Orange, and San Diego counties, according to The Los Angeles Times. A smaller number of goods were incorrectly underpriced.
Haggen said it never intended to close any stores but for Albertsons’ “anti-competitive conduct and unfair and deceptive practices.”
“Haggen has had to focus on strategies to recover from Albertsons’ wrongful acts, which include, sadly, Haggen’s efforts to find new jobs for displaced employees who too are victims of Albertsons’ actions,” the complaint alleges.
Albertsons said the suit’s allegations “are completely without merit.”
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