Teamsters Tell Royal Ahold Shareholders: Your U.S. Operations Are at Risk

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International Brotherhood of Teamsters

Apr 20, 2011, 10:29 ET

Teamsters, Allies Confront Ahold's Broken Promises at Netherlands Meeting

AMSTERDAM, April 20, 2011 /PRNewswire-USNewswire/ -- At Royal Ahold's annual shareholder meeting today, the Teamsters Union demanded the international supermarket company stop outsourcing its grocery distribution work to a notoriously anti-union wholesaler, C&S Wholesale Grocers, that it regain control of its procurement and distribution, and keep the promises it made to its workers and American communities.

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The pressure by the Teamsters Union comes after Netherlands-based Royal Ahold turned over its Giant Foods dry-goods warehouse to C&S, which in turn, announced plans to close the facility. The closure will likely eliminate 450 good union jobs in Jessup, Md. in the coming months. Ahold may also turn over its fresh food, meat, seafood and produce warehouse in Maryland to C&S, which would likely move the work 110 kilometers away from most of Giant's stores and threaten an additional 500 jobs. There are concerns Ahold will make a similar deal for a takeover of its Stop & Shop distribution center in Assonet, Mass.

"Ahold's broken promises have created a crisis for its future in the United States," Teamsters Warehouse Division Director John Williams told shareholders. "Once again, Ahold is breaking its 14-year-old promise to respect worker and community rights in the United States. For two decades, Royal Ahold and its wholesaler, C&S, have implemented a scorched-earth strategy that has devastated thousand of workers, their families and their communities."

A 1996 multi-party social compact spells out Royal Ahold's recognition of the value of collective bargaining and consultation with labor organizations in the United States and its interest to work better with the Teamsters Union and the communities it serves.

Yet over time, Ahold has given control of much of its procurement and distribution logistics for its U.S. companies to C&S, building the third-party provider into the largest wholesale grocery distributor in the United States.

C&S has shut down more than 20 union warehouses, moving work to non-union facilities where the company pays workers 40 to 60 percent less. The non-union facilities are often located hundreds of miles away from the stores they service, costing local communities thousands of jobs and increasing pollution on America's highways.

"The last time Royal Ahold allowed management of a U.S. subsidiary to violate the company's standards of corporate responsibility, investors lost nearly two-thirds of their shares' value; the CEO and CFO resigned in disgrace; and the reputation of this Royal company was severely tarnished," Teamsters Capital Strategies Director Carin Zelenko told investors. "We believe Ahold has failed to live up to its agreements and instead has pursued a short-term slash and burn strategy that puts workers, communities and the U.S. operations at risk."

Zelenko and Williams pointed out that Ahold's actions, while clearly bad for workers, are also bad for business. Despite promises of cost savings, a number of supermarket chains that outsourced their procurement and distribution operations to C&S have subsequently filed for bankruptcy, including Bruno's, Bi-Lo, Grand Union, Pathmark and now A&P.

"Royal Ahold's behavior is not just confined to the United States," Zelenko said. "In the Netherlands, Royal Ahold has outsourced 30 to 60 percent of its warehouse distribution work to temporary employment agencies to avoid strong Dutch labor laws."

Zelenko and Williams asked Royal Ahold's executives to reverse course and to ensure that their U.S. companies are in compliance with Ahold's stated values and policies.

Zelenko and Williams announced the Teamsters will return to the Netherlands in three weeks with a delegation of workers, community leaders, elected officials and food sustainability activists affected by Ahold's decisions. The delegation will ask Royal Ahold to reverse the decision to close the Giant warehouse in Maryland and to work with Teamster Union experts, community leaders and state and local authorities to find alternatives to destroying jobs and local economies.

Outside the shareholders meeting, the Teamsters joined with Dutch labor union FNV Bondgenoten, which represents workers at Royal Ahold's Netherland companies, the United Food and Commercial Workers, which represents Ahold's retail store employees in the U.S., and the Coalition of Immokalee Workers, to engage investors about Ahold's workers' rights violations.

Royal Ahold is an international supermarket company based in the Netherlands with annual revenue of more than $38 billion. Royal Ahold is the fifth-largest supermarket owner in the United States whose chains include Giant Landover (Maryland), Giant Carlisle (Pennsylvania), Martins (Virginia) and Stop & Shop (Massachusetts).

Founded in 1903, the Teamsters Union represents 1.4 million hardworking men and women throughout the United States, Canada and Puerto Rico. Visit www.teamster.org for more information.

SOURCE International Brotherhood of Teamsters