Haggen, a grocery chain forced to close multiple stores throughout Orange County and California within months of opening, has filed a $1 billion lawsuit against Albertsons on Tuesday, alleging it sabotaged the launch of Haggen's new stores in five states.
The lawsuit states Albertsons, another grocery chain, violated antitrust laws by using Haggen to help gain the approval of its merger with Safeway this year and then proceeding to engage in "coordinated and systematic efforts to eliminate competition," according to Arizona Central.
According to the lawsuit, Albertsons was supposed to shed 146 stores that the FTC required and allow Haggen to acquire them in attempt to expand and foster local competition, however the chain undermined Haggen and "critically damaged the operations, customer service, brand goodwill and profitability of the divested stores from the outset."
In one example, Haggen claimed Albertsons gave misleading information about products before the transition, resulting in prices that customers took issue with as soon as the rebranded stores opened, according to the San Jose Mercury News.
"The practical result of this deception was a consumer walking into a brand new Haggen store and finding the same item on the same shelf, but now priced higher than it was immediately prior to store conversion," the lawsuit said.
Other allegations include:
• Using proprietary and confidential information in an aggressive marketing campaign to undermine Haggen grand openings.
• Cutting off Haggen-acquired store advertising.
• Timing the remodeling of existing Albertsons stores to hinder Haggen's entry into markets.
• Illegally accessing Haggen's confidential data to divert customers.
• Understocking inventory at newly acquired stores just prior to conversion.
• Overstocking perishable inventory at Haggen-acquired stores, resulting in the disposal of significant amounts of inventory.
• Removing store fixtures and inventory from Haggen-acquired stores.
• Diverting Haggen inventory to Albertsons stores.
• Failing to perform routine maintenance on stores and equipment.
This is just another entry in the feud between the two grocery chains. In July, Albertsons sued Haggen claiming the company failed to pay millions it owned when it acquired Albertson's stores and inventory.
Albertsons could not be reached for comment Tuesday, but a spokesperson told the Los Angeles Times the allegations "are completely without merit."
