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The FTC did not insist on Haggen. The sell-off was triggered by anti-trust law, but any interested buyer could have stepped up.
You can blame Haggen for trying to jump from 18 to 170+ stores in a matter of months. And there is a lot of evidence that Albertson's failed to live up to their contractual obligations during the transfer - the courts will sort that out, they're suing each other.
There isn't a lot of evidence. Just specious claims by Haggen. Evidence is yet to be seen. Judging by the totally inept way Haggen handled the conversion of the soon-to-be-closed store they opened in my town, I take the claims in their off the wall billion dollar lawsuit with a huge dose of salt.
09-11-2015, 06:48 PM
i7pXFLbhE3gq
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Quote:
Originally Posted by wutitiz
True the FTC did not force Haggen into the deal. However they did force Safeway/Albertsons/Cerberus. That is the point, which one after another left-leaner seems to miss.
I don't think anyone misses that point.
Let's say the FTC did nothing. Competition would have effectively been eliminated (no, Amazon and Google don't matter in any significant way) in many markets.
The problem is not that the FTC forced them to sell some stores. The problem with the FTC is that they went along with Haggen's plan to grow by 9x, which was obviously doomed from the beginning.
Really though, Haggen deserves most of the blame for this mess. They already had to close stores due to poor sales before the acquisition happened. When they got the new stores, they haphazardly converted them and jacked up prices. To exactly no one's surprise, people abandoned Haggen at breakneck pace because well, why would they pay more at Haggen when they can get the same product for less across the street at Safeway or Albertson's?
They're a not very good grocer with high prices who somehow deluded themselves into thinking that if they just underwent an order of magnitude expansion in size, they'd somehow stop being terrible.
It remains to be seen if the allegations against Albertson's have any merit or if it's just Haggen trying to shift the blame for their own monumental screwup.
About a year ago, the large West coast grocery store chain Safeway was sold to a private equity company called Cerberus. All well and good, we had a willing seller and willing buyer. Safeway stockholders at the time overwhelmingly approved the deal: Safeway Gains Shareholder Approval For Cerberus Deal | Food World | Food Trade News
But the federal gov't felt the need to horn in, and insisted that approx. 150 of the stores involved be sold off to a company called Haggen, in order to ensure that no hint of monopoly power would be created. The result was a mess.
A friend of mine told me about his neighbor who had worked at a Safeway store for 30 years. The store was converted to 'Haggen' per fed request. It had been one of the biggest and highest volume stores on the West Coast, but after conversion, sales dropped by 60%. She wanted to transfer to another Safeway store, but was not allowed that option. She's up the creek w/o a paddle, while the federal regulators who created this mess go tra-la-la on their way with zero accountability.
The very idea of monopoly in the grocery industry is just dumb in the era of Walmart, Costco, Amazon, etc.
The morons in the federal government should have no say in any such deal. These are the same clueless morons that have run up a $18 trillion debt...50% of that in the last 8 years. These clowns, who have (with a very few exceptions) never started or managed a successful private business in their lives, are the very last people anyone with a brain would listen to about business.
There were clearly two parties in this decision. One was Haggen, as you point out. But the other was the federal gov't, which forced the sale upon Cerberus. Clearly without the intervention of the feds, the deal would have not happened the way it did.
But thanks for proving my point: the federal regulators that helped to create this mess will walk away from it with ZERO accountability.
No one in government will ever be held accountable for their actions.
The morons in the federal government should have no say in any such deal. These are the same clueless morons that have run up a $18 trillion debt...50% of that in the last 8 years. These clowns, who have (with a very few exceptions) never started or managed a successful private business in their lives, are the very last people anyone with a brain would listen to about business.
So you believe that monopolies should be allowed and the anti-trust laws thrown out the window?
Hmmmm, history has taught us some hard lessons when that was true.
About a year ago, the large West coast grocery store chain Safeway was sold to a private equity company called Cerberus. All well and good, we had a willing seller and willing buyer. Safeway stockholders at the time overwhelmingly approved the deal: Safeway Gains Shareholder Approval For Cerberus Deal | Food World | Food Trade News
But the federal gov't felt the need to horn in, and insisted that approx. 150 of the stores involved be sold off to a company called Haggen, in order to ensure that no hint of monopoly power would be created. The result was a mess.
A friend of mine told me about his neighbor who had worked at a Safeway store for 30 years. The store was converted to 'Haggen' per fed request. It had been one of the biggest and highest volume stores on the West Coast, but after conversion, sales dropped by 60%. She wanted to transfer to another Safeway store, but was not allowed that option. She's up the creek w/o a paddle, while the federal regulators who created this mess go tra-la-la on their way with zero accountability.
The very idea of monopoly in the grocery industry is just dumb in the era of Walmart, Costco, Amazon, etc.
The "government insisted" the stores be sold to Haggen and only to Haggen?
How did they force Haggen to take them?
09-12-2015, 09:58 AM
i7pXFLbhE3gq
n/a posts
Quote:
Originally Posted by TigerLily24
The "government insisted" the stores be sold to Haggen and only to Haggen?
How did they force Haggen to take them?
They didn't. The FTC's job was to make sure the buyer had the infrastructure and finances to be able to run the stores.
The thing is, Haggen actually could have done this. But they chose to do 36 hour "conversions" that amounted to little more than new signs and then they jacked up prices. Now they blame Albertson's for not being upfront with them about pricing and inventory.
But here's the thing, they already had to close stores before the acquisition. People weren't willing to pay their high prices. When they took over the new stores, they raised prices over what Albertson's - already one of the most overpriced stores in the Pacific Northwest - was charging.
They tried to gouge people and lost, and now they're closing stores. This is just a repeat of the past where they couldn't compete thanks to their high prices.
The only monopoly the government won't go after is itself.
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