Albertsons faces $1 billion suit by Haggen over store sales

In the 55-page complaint, Haggen lists a variety of grievances against Albertsons that have taken place since the Bellingham grocer agreed to acquire 146 stores in five states in December.

After months of silence or short prepared statements, Haggen filed its first counter-shot on Tuesday since it acquired dozens of stores – as ordered by the Federal Trade Commission – from Albertsons, which included two Santa Clarita grocery stores. The Federal Trade Commission’s Bureau of Competition forced Albertson’s to sell the 146 stores as part of its merger with Safeway.

According to the lawsuit, Albertsons provided Haggen with false, misleading and incomplete retail pricing data causing Haggen stores to unknowingly inflate prices.

Haggen said Albertsons violated the FTC order and purchase agreement through a series of acts that “created substantial distraction and diverted the attention of store-level and senior Haggen management” during the conversion process.

“The allegations in the lawsuit are completely without merit”, said Carlos Illingworth, director of communications and government affairs for Albertsons, Vons and Pavilions.

Those practices damaged Haggen’s operations from the get-go, leading to store closures it had never intended to make, as well as a barrage of negative press, the lawsuit says.

Haggen – a supermarket chain based in the Pacific Northwest – is suing Albertsons for $US1 billion.

“During the transfer process, Albertsons launched its plan to gain market power and/or monopoly power, acting in a manner that was designed to (and did) hamstring Haggen’s ability to successfully operate the stores after taking ownership”, the complaint reads.

Haggen began converting the store in February.

The suit comes weeks after Albertsons filed suit against Haggen for breach of contract and fraud after allegedly refusing to pay more than $40 million for inventory following Haggen’s acquisition of Albertsons and Safeway stores, according to Courthouse News Service. Those false promises influenced Haggen’s decision to buy those stores and also its strategies going forward, the lawsuit said.

“Albertsons’ anti-competitive conduct caused significant damage to Haggen’s image, brand and ability to build goodwill during its grand openings to the public”, the lawsuit states.

In early 2015, the grocer, which previously operated exclusively in Washington and Oregon and is based in Bellingham, announced with great fanfare that it would expand ninefold, entering new markets in California, Arizona and Nevada. The Albertsons executives sought to convince Haggen of the technical feasibility of a seamless transition for the stores.

Failing to perform routine maintenance on stores and equipment.