Unions and Grocers Against WalMart

I’m always on the look out for good examples of the economic concept of the “Baptists and Bootleggers”. It’s where an unlikely alliance forms of two politically polar opposites to influence government. The classic illustration of the phenomenon is Prohibition. The Baptists wanted it to continue for moral and health reasons. The Bootleggers did too, but purely for self interest. The politicians acted as the go-between, taking money from the Bootleggers, and moral arguments from the Baptists, to advocate for Prohibition.

The modern day example is found in an article in yesterday’s Wall Street Journal, Wal-Mart Tries to Unmask Opponents. WalMart has been trying to build new stores and warehouses in California for years, but they have been hindered by the strict environmental laws and lawsuits by environmental groups. They wondered who was funding the suits. At first they suspected unions, but it turns out their competitors were the primary source of money.

Wal-Mart filed the discovery motions after a June article in The Wall Street Journal said grocery competitors Safeway Inc., Supervalu Inc. and Ahold NV secretly funded hundreds of lengthy battles across the country opposing Wal-Mart’s efforts to open supercenters, which sell groceries and general merchandise. In some instances, the grocery chains’ efforts were aided by grocery-worker unions, which fear that Wal-Mart will suppress industry wages and benefits.

The grocers hired Saint Consulting Group, a land-use firm based in Massachusetts, to carry out antidevelopment campaigns against Wal-Mart using political tactics and suits to delay or derail the opening of Wal-Mart stores, the Journal said.

In two of the four California cases involving Wal-Mart, the Journal reviewed internal Saint documents that showed the consulting firm was hired by Safeway to thwart Wal-Mart’s expansion.

In all, Safeway hired Saint to organize more than 30 campaigns against Wal-Mart projects in the state in the past eight years.

One of them resulted in a court decision that made it more difficult to build big-box stores in California, according to Saint internal documents that list the company’s projects, clients and billing numbers.
So it wasn’t just the high minded environmentalists trying to protect habitat for the endangered San Joaquin kit fox. It was the grocers trying to protect their profit margins at the expense of the consumers. Read the whole article. Unions are involved, as you might expect.

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