ASSOCIATED FOOD STORES BUYS ETHNIC DISTRIBUTOR
SALT LAKE CITY — Associated Food Stores here said last week it has reached an agreement to acquire Gonzales & Sons, a local supplier to about 200 Hispanic-oriented food stores in Utah and Idaho. Terms were not disclosed. “Our goal is to keep the expertise of the entire Gonzales family and existing management team in place in continuing to support the Hispanic/Latino businesses and communities served by this great company,” said Rich Parkinson, president and chief executive officer, AFS, in a statement. Eliseo Faz, former director of Hispanic marketing for AFS, has been named vice president and general manager of Gonzales & Sons, which will continue to operate from its existing depot here and will be a wholly owned subsidiary of AFS. Members of AFS currently receive Hispanic-focused products and other speciality merchandise from Kehe Food Distributors, Romeoville, Ill., which will continue to supply specialty products. Gonzales & Sons carries about 3,000 SKUs, including a mix of about 25% perishables.
COURT CONFIRMS ILLEGALITY OF ‘FAIR SHARE’ BILL
BALTIMORE — A U.S. Appeals Court here last week upheld a lower court's ruling that Maryland violated federal benefit regulations when it passed a law requiring large companies to provide a minimum level of health care coverage for their workers. Maryland's so-called “fair share” law, which was seen as targeting Wal-Mart, had previously been found to violate the Employee Retirement Income Security Act, or ERISA, which prohibits states from regulating private companies' benefit programs. The Maryland law, seen as a model for similar proposals in legislatures around the country last year, would have required companies with 10,000 or more employees in the state to pay at least 8% of their payroll in health benefits or make up the difference in a tax.
COSTCO GENDER-DISCRIMINATION SUIT A CLASS-ACTION
SAN FRANCISCO — U.S. District Court Judge Marilyn Hall Patel has ruled here that the court will allow a gender-discrimination lawsuit against Costco to proceed as a class action. The ruling will broaden the base of the August 2004 lawsuit filed by three Costco female employees to encompass as many as 700 women at the company's middle-management level who were allegedly passed over for promotion over a three-year period. In her ruling, Patel said the women “presented strong evidence of a common culture at Costco which disadvantages women.” The suit claims Costco, Issaquah, Wash., denied women promotions to the positions of general manager and assistant general manager at its stores.
INVESTOR GROUP DROPS SUIT AGAINST METRO CEO
MONTREAL — A group of investors has called off a campaign to dismiss Pierre Lessard, president and chief executive officer of Metro Inc. here, and said it would also drop a lawsuit over Lessard's compensation agreement. The group, Regroupment des Marchands Actionnaires, said the campaign, which began in 2003, was no longer in its best interest of Metro shareholders but that it would continue with a suit challenging Metro's conversion of certain stock shares from Class B to subordinate Class A shares. Metro in a statement last week said it would continue to contest proceedings in the latter suit.
CALIFORNIA CITY'S COUNCIL VOTES ON BIG-BOX BAN
SANTA ANA, Calif. — The City Council here will take a final vote next month on an ordinance that would make it difficult for big -box stores to operate in the city — an ordinance passed by the council on a 6-1 vote last week. Under the ordinance, operators of big-box stores — defined as stores exceeding 120,000 square feet that devote more than 10% of sales area to non-taxable merchandise — would have to apply to the city for a conditional use permit that takes into consideration all economic benefits and costs to the city.