A Messy Food Fight

Posted by Bobbi Murray on July 30, 2008

Everyone’s a little tense about groceries lately — eggs up to an average of $2.18 a dozen from $1.45 in 2006, whole milk around $3.87 a gallon, up from $3.20 two years ago. But here in Los Angeles we’ve had our food issues for a quite a while, and not the kind they talk about in the tabloids.

I’m talking about access to decent food along with fair working conditions for grocery workers.

Those are two big ones around here. After the 1992 civil unrest, officials made a lot of noise about bringing grocery stores to areas previously forced to resort to liquor stores for food shopping. That has not happened on any significant scale.

And a four-and-a-half-month-long grocery workers strike and lockout that rocked Southern California almost five years ago still resonates with both workers and consumers.

Employees of stores from the national chains Safeway, Kroger and Albertson’s stayed out from late fall 2003 to spring 2004 only to get a crummy contract that drastically cut health benefits and created a miserable two-tier system that saw new hires paid far less than veterans.

Customers identified with the workers and supported the strike. The stores were empty of shoppers who instead brought cookies, coffee and tamales to local picket lines.

The union, United Food and Commercial Workers (UFCW) failed to capture that sentiment by organizing community support to add pressure on management. They will blushingly admit that themselves.

They did do it ahead of negotiations for a new contract last year, when they eliminated the two-tier system and improved health benefits.

After the strike we all found out that Ralph’s, the Kroger subsidiary, which had locked out its workers, had re-hired the lock-outs and paid them under false names and social security numbers.

That, by the way is illegal. The company was indicted in June 2006. The assistant US attorney on the case said it absolutely allowed all three companies to prolong the strike.

Ralph’s pleaded guilty in October 2006, was fined $20 million and had to put $50 million into a restitution fund for the workers.

So we’re touchy about grocery shopping anyway and now we have one more reason: it’s called Tesco.

The company, dubbed “the WalMart of the UK,” is the third largest retailer in the world. In late 2007, Tesco began its launch of a new chain of grocery stores in California, Arizona and Nevada. They have plans to move beyond, maybe to a corner near you.

There are nearly 2,000 Tesco stores in the UK, with 270,000 employees, plus 400,000 employees working in the 3,200 stores in 12 countries (that’s before the U.S. expansion.) Tesco has even spooked WalMart. In summer 2005, Tesco claimed 30.5 percent of Britain;‘s grocery market to WalMart’s 16.7 percent and provoked sputters of “the government should investigate” from WalMart CEO Lee Scott.

Kinda funny because look who’s talking. But Tesco is large-scale, WalMart powerful. They exert a similar Darth Vader grip on their supply chain, demanding the lowest prices and squeezing standards on down the line.

When the mega-grocer landed in Southern California, the grocery workers union here was dusting itself off after the long, costly strike and gearing up for new contract negotiations with existing national chains. Tesco is thoroughly unionized in the UK, so Southern California union officials had high hopes the company would allow for organizing here, too. But the union’s sunny letter of welcome, with an invitation to meet, was met with a terse snub in a response that deemed such a meeting “inappropriate at this time.”

Two months later, more bad news — the union learned that Tesco USA had hired its top in-house lawyer: Mary Montiel Kasper. Kasper’s job before Tesco? Staff attorney for Ralph’s, the company indicted for re-hiring locked out workers under false identities.

Okey dokey, no mixed signals there. Tesco To Unions: See Ya.

An excellent report, called “Shopping For A Market: Evaluating Tesco’s Entry into Los Angeles and the United States” by the Urban and Environmental Policy Institute at Occidental College outlines Tesco’s business practices. In it, you’ll find that although TescoUK is unionized, the company’s relationship with the unions is not necessarily cooperative

The report quotes an article about a three-day strike in Scotland in May 2007. “Tesco was criticized as ‘behaving in a truly draconian fashion which puts one in mind of the behavior of 19th Century pit-owners’s,’ according to the area’s member of Parliament, Jim Devine.”

Tesco stores here go under the gigglesome name Fresh and Easy Neighborhood Markets. Gotta wonder if they focus-grouped that name.

There are now 32 Fresh and Easy stores in Southern California, with 70 more slated to open this year. They are small-scale, less than 10,000 square feet, and with prepared meals and fine wines on offer — “a place you can buy arugula and toilet paper,” as one local activist summed it up.

The idea was evidently to take on Trader Joe’s, which has the same size stores and offers yummy prepared foods like Fresh and Easy does, but it’s too soon to tell how that’s going.

TJ’s is non-union but has a reputation for reasonable pay and benefits. That helped them boost their long-term customer base during the long strike. Many shoppers went there rather than cross picket lines and have never looked back
.

Earlier this month Fresh & Easy made a big event of announcing a store groundbreaking in South Los Angeles. A press release quoting CEO Tim Mason:

Fresh & Easy is committed to serving all different types of neighborhoods. We strongly believe everyone deserves fresh, wholesome food at affordable prices, regardless of where they live.

He added:

We are excited to open in South LA and bring local, high-quality jobs to the neighborhood.

But it was a groundbreaking, not an opening, notes Amanda Shaffer, lead author of the Urban and Environmental Policy Institute report. Community leaders who were pleased with the prospect of a new grocery store, Shaffer says, were appalled to find out that the opening would be three to five years out.

They’re already opening their distribution warehouse in the Midwest in preparation for store launches out there, Shaffer says.

And for all Fresh & Easy’s hip-hooray about its inner city commitment, a look at their Web site map of planned sites mostly forms a ring around Los Angeles.

Fresh and Easy does have a store in Compton, an inner-city community south of Los Angeles proper, as any hip-hop fan knows. There was a Food For Less in the area already, says Shaffer.

On July 17, just a week after Fresh & Easy’s south LA groundbreaking fanfare, there was another press event, this time when a Blue Ribbon Commission convened by the Alliance for Healthy and Responsible Grocery Stores released a report “Feeding Our Communities.”

It showed “food deserts” throughout the inner city where residents must drive or otherwise travel far to find healthful, affordable grocery shopping options. It also noted that the non-union stores that locate in lower-income communities depress wages and working conditions all over the area.

The Alliance has mounted a campaign to bring Tesco/Fresh and Easy in Los Angeles to the table to negotiate a community benefits agreement. News as it happens.

Meanwhile, business analysts are predicting rough times for Tesco on America’s shores. A March 2008 analysis showed Fresh & Easy missing its early sales targets by 70 percent, making $30 million instead of $100 million over six months.

The same analysts note that the US has been “a graveyard” for other foreign grocery retailers.

But UEPI’s Shaffer thinks Tesco/Fresh & Easy will pull out all the stops. The US piece is crucial to the international business plan as the UK share of the market has slipped a fraction.

By the way, Barack Obama has twice written to Tesco, once to US CEO Tim Mason and in June to UK CEO Sir Terry Leahy asking that the company work with the union, but has been stiff-armed. A spokesman said Leahy would reply but Obama’s interest “doesn’t change much.”

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