NEWS WATCH: SAFEWAY SETTLES SUIT ON TOBACCO SALES...WINN-DIXIE TAKEN OFF THE S&P 500 INDEX...HANNAFORD COMPLETES VICTORY PURCHASE

SAFEWAY SETTLES SUIT ON TOBACCO SALES

eed last week to pay $245,000 to settle a lawsuit filed by the state attorney general last June, alleging the retailer had sold tobacco products to minors. The agreement also requires the chain to instruct cashiers to ask for identification from anyone purchasing tobacco products who looks younger than 27 years old, and to install identification-request prompts on cash registers when the tobacco key is struck. Attorney General Bill Lockyer said Safeway will pay $145,000 in civil penalties and another $100,000 for expenses incurred by both the state and city of Los Angeles in filing the lawsuit. Chain officials claimed Lockyer singled out Safeway, though the attorney general said Safeway had the worst record of the retailers investigated.

WINN-DIXIE TAKEN OFF THE S&P 500 INDEX

JACKSONVILLE, Fla. -- New York-based rating agency Standard & Poor's last week dropped retailer Winn-Dixie here from its S&P 500 stock index. In making the announcement, S&P noted that Winn-Dixie's market capitalization of $580 million at the close of business Nov. 27 was the smallest of the 500 companies making up the index. Freescale Semiconductor, a spin-off of cell phone company Motorola, replaced Winn-Dixie in the index, which is designed to measure performance of the U.S. economy through changes in the market value of 500 stocks representing all major industries.

HANNAFORD COMPLETES VICTORY PURCHASE

SCARBOROUGH, Maine -- Hannaford Bros. here said last week that federal regulators had approved its $175 million purchase of the 17-store Victory Super Markets chain of Leominster, Mass. With the deal completed, Hannaford said it would begin converting the stores, located in Massachusetts and New Hampshire, to the Hannaford banner in February. It expects to have all stores switched to the new banner by August. With the acquisition of the 81-year-old chain, Hannaford, a division of Delhaize USA, Salisbury, N.C., will operate 142 stores in five states.

LUND TO BUILD DOWNTOWN MINNEAPOLIS STORES

MINNEAPOLIS -- Lund Food Holdings here, operator of Lunds and Byerly's chains, said it would open two Lunds grocery stores in downtown Minneapolis in 2006. "There has been a need for a full-service grocery store in the downtown community for some time, especially with the recent revitalization and renovation efforts," the company said in a statement. The stores, to be located on either side of the Mississippi River, will be "urban, hybrid models" of the traditional Lunds store, the company said.

PUBLIX TO BUILD NEW DISTRIBUTION CENTER

LAKELAND, Fla. -- Publix Super Markets here said it would build a 600,000-square-foot, $35 million perishables distribution center in Punta Gorda, Fla. In a ceremony held at the 87-acre parcel last week, attended by Gov. Jeb Bush, Publix officials said the facility would provide around 300 jobs and an economic boost to Charlotte County, which was ravaged by hurricanes this summer. The center will provide distribution in southwest Florida for frozen food, dairy, boxed meat and produce, and will supplement an existing Publix warehouse in Lakeland. Publix said it was finalizing a deal to purchase the property and was working with county officials regarding infrastructure improvements to be paid for by the state.