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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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Comments (16)

Someone put Hooson on suici... (Below threshold)

Someone put Hooson on suicide watch...


Currently, the booze indust... (Below threshold)

Currently, the booze industry is giving financial support to the "Vote No on Prop 19" side in California.

They want the recreational drug market all to themselves.

I wonder if it all comes ou... (Below threshold)

I wonder if it all comes out of advertising bugets or if safeway actually labels it warchest. Either way the consumers are paying for it at the register.

I think that I'm OK with th... (Below threshold)

I think that I'm OK with this. No, seriously. What is wrong with a free enterprise legally funding attempts to keep competitors off their turf? I mean, as long as everything they were doing is legal (as opposed to setting fire to WalMarts under construction, bribing judges or officials to keep WalMart out, etc) what's the problem? Maybe it's an abuse of the system, but the system is legal and it's the way things are done - you get approvals, you clear hurtles, then you build. Yeah, I mean people that want WalMart and would shop there and probably save money are 'losing out', but what is inherently wrong with that? They're free to bond together and fight for WalMart to come there, to get officials elected that wouldn't cave to campaigns against them, not enact (legally) barriers to WalMart opening there, etc. Now, true, maybe I'm missing something about what was actually done, maybe it was more underhanded than it looks (yeah, it's sneaky to fund campaigns against it secretly, but is it illegal? (no, really, I'm asking here - is it illegal?) I mean, advertisers run ads slamming their competitors all the time, the only difference is whether they say 'I'm Coke and I approved this attack on Pepsi'), but how is this really anything more than a free market at work? And, of course, using legal means they have been exposed and now WalMart can use that to their advantage is possible and say, 'hey, they're all sneak and underhanded and don't want you to save money', etc. Help us built a nice new Supercenter in your town.

True, we might like to see government simply out of deciding who opens what where, but that's just not the case, so what's wrong with playing by those rules to your economic advantage? The correct response seems, to me, to change the way the game is played, not complain that one side is seeming to be more successful than another at it. If people want the consumer to be the ultimate arbiter of what business lives and which dies, then they need to make that the law.

And as for this: "It was the grocers trying to protect their profit margins at the expense of the consumers." Uh, yeah. That's exactly it, Charlie. That's what businesses, successful businesses, do. You sound rather like a leftist screeching about BIG OIL and its profit margins raping consumers at the pump. Since when do the people around these parts complain about businesses doing whatever they legally can do make money? Sure, I hate that restaurants charge $3 for a glass of Coke when I can buy a 12 pack for $2.50, but I can go there and buy one, not buy one, or go somewhere else. I don't like that they do that, but I know that's how they make their money and if people want to pay that much for a Coke, and sometimes I do and sometimes I don't, that's their business.

I agree that the actions of... (Below threshold)
Charlie Quidnunc:

I agree that the actions of Safeway, Supervalu, and Ahold were not illegal. But you can't call them ethical. And if there was collusion and coordination between these competitors to keep out another firm, that's illegal restraint of trade. And you can't expect consumers to rise up to protest these actions. The harms each consumer suffers at the hands of the deceitful grocers are small. This is a case of distributed harm and concentrated gain. The consumer harms are small to each consumer, but large to society as a whole. The gains to the grocers are large and concentrated.

"Maybe it's an abuse of the... (Below threshold)

"Maybe it's an abuse of the system, but the system is legal and it's the way things are done."

It's called "dishonesty". And it may be the 'system' but it does not make it right.

Locally we have a lawyer suing businesses for failure to abide by the Americans With Disabilities Act. Prior to filing suit, he sends them a letter, in essence saying "pay me or I'll sue".

How many insurance companies pay off 'nuisance lawsuits' because it's cheaper than going through a trial?

Both of the above are "legal". Does that mean their "right"? And our sanctimonious lawyers and judges go along with it.

Grocers against Wal-mart; t... (Below threshold)
Don L:

Grocers against Wal-mart; the worlds' largest grocery store? (That we failed at competition thing).

Unions against wal-Mart
Professional failures against success?

Psst!Satan is against God too... Duh!

Sorry, I don't see it as un... (Below threshold)

Sorry, I don't see it as unethical or dishonest if they abided by the law and didn't lie about their involvement (I already said that if this wasn't the case, and that includes collusion, it would alter my stance, so making the argument is pointless). There are lots of other adjectives that might apply, though, none flattering. At the end of the day I'd rather see the rules changed (win the war) instead of wasting time attacking every individual that is profiting from them as they are (fighting battles). Acceptance is not always approval, otherwise we'd be calling for the censorship of speech we don't like and we'd be liberals.

And arguing that Rearden Metal should be made to benefit "society as a whole" at the expense of Hank and his employees isn't exactly a winning argument from my point of view, even if it means we all pay a bit more to ride the train.

My personal view of busines... (Below threshold)
Paul Hooson:

My personal view of business is that a rising tide floats all boats. More stores highlight the customer appetite for more products and create more sales for everyone. Safeway shouldn't be so concerned here.

In recent times, Safeway has done a far better job getting in more organic and health conscious groceries which appeal to that Yuppie audience. And they offer terrific lower everyday prices and more 3 day sale items. When their house brand of 2 liter soda goes on sale for .69 you just can't beat that deal. It tastes great for the money. Orange Refresh is my favorite here. Their house brand of roasted tomato salsa is sure good too. Just let Wal-Mart just try to beat that. I'm sticking with Safeway, myself.

(BTW, thanks for the funny joke, Jay. I sure appreciate that laugh. BTW, you should enter my outrageous and tasteless Bethany Storro joke contest on Wizbang Pop. You're a witty guy. A good day to you.)

So when Safeway blocks Wal-... (Below threshold)

So when Safeway blocks Wal-Mart's expansion efforts in order to protect their corporate profits you clowns are okay with that, but when unions do the same thing to protect workers jobs and get them decent benefits you pansies shit your pants.

Why do you hate some Americans so much?

By clowns you mean Falze, D... (Below threshold)

By clowns you mean Falze, Dane?

"Why do you hate some Ameri... (Below threshold)

"Why do you hate some Americans so much?"

If it ain't "hate", it's "race". Neither of which appear to be relevant to this article. But don't let that stop you Dane.

dane the lost: "Why do you ... (Below threshold)

dane the lost: "Why do you hate some Americans so much?"

Because those Americans hate America and the civilized West so much.

Quite simple really.

I am with Falze on this one... (Below threshold)

I am with Falze on this one.

#1, am not a fan of WalMart - It has a history of pushing cheap subsidized Chinese goods on the market (and we know how that has done wonders for our economy and financial situation, right?), its heavy handed effects upon the competing small stores, labor market AND what is available in dry goods and produce is literally not healthy to small communities and their population, and from the folks I have known that have worked there, most employees are more than happy to get out of their jobs and work their way up the labor market. Based on these observations, I do not consider it unethical for other players in the market to obstruct them.

#2, as Falze points out, they are LEGALLY doing what they are doing

#3, Just because someone you don't like is doing something, doesn't make what they are doing bad. I thought only moonbats didn't understand that. I guess I was wrong.

.... Baptists and Bootlegge... (Below threshold)

.... Baptists and Bootleggers gummint is exemplified in every willful alliance of politically polar opposites whenever such alliance is forged to influence government. The classic illustration of the form of government is prohibition, which the nanny statists want to rationalize for "moral" and "health" reasons and the Mexican drug gangs and the anti-drugs-industry do too -- all of them for purely self interest. The politicians act as the go-betweens and take money from the Mexican, Chinese, Russian, Afghan and every other drug gang and moral arguments from the nanny statists -- and maximize the profits to them all by continuing to advocate and to legislate for prohibition.

Want to end ALL drug crime?

Repeal prohibition!

Good luck -- and don't hold your breath, while waiting.

My opinion is that Walmart ... (Below threshold)

My opinion is that Walmart wants all competition out of the way, then they can sell for any price they want, plus all the crap they get out of China and South America. They don't care about the quality of what they sell, only the quantity. I read the book that the Walton guy wrote, and he basically said he wants all competition taken out by lowering prices until the competition is out of business, then walmart can do as they please. I shop at Albertson's, Target, Kmart, etc. as often as possible, even tho there is a Walmart that is closer. It's the principle that counts.






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