KANSAS CITY, Mo. -- Associated Wholesale Grocers is looking to buy stores from the bankrupt Food Barn chain if current negotiations with the chain's principal union fail to produce concessions, it was revealed in U.S. Bankruptcy Court here.
Details of AWG's letter of intent regarding the purchase were not disclosed in court. Judge Frank W. Koger, however, gave the wholesaler until Jan. 31 to come up with a definitive agreement with Food Barn.
AWG, a cooperative wholesaler, is Food Barn's supplier.
Meanwhile, negotiations continue between Food Barn and Local 576 of the United Food and Commercial Workers union with the intent of keeping Food Barn and its 40 stores intact. The union earlier rejected $4.6 million in wage and benefit cuts that the company proposed, resulting in the withdrawal of a bankruptcy reorganization plan that was to be heard Oct. 14.
Food Barn, regarded as the sole completely unionized operator in the market, steadfastly has complained of an unfair advantage because other retailers here are either nonunion or partially unionized. A 15-week strike by the UFCW in 1991 is cited by the chain as a major factor in its downfall.
Food Barn, this area's Safeway spinoff, has been under Chapter 11 protection since Jan. 5, 1993.
At a court hearing several weeks ago, both AWG and Fleming representatives expressed interest in acquiring some or all of the Food Barn stores.
AWG previously bought the Food Barn warehouse and has supplied the firm since 1992. AWG members, operating under Price Chopper, Thriftway and Sun Fresh banners, lead in market share here.
