SAFEWAY TO CLOSE PROCESSING PLANT

PAMELA BLAMEY

STOCKTON, Calif. -- Safeway will close its meat processing plant here in August, company officials confirmed.

The chain's only meat processing plant manufactures and packages products such as hot dogs, ham, bacon and bologna for Safeway stores, as well as other retail chains such as Vons Cos., said Deborah Lambert, director of public affairs at the chain's Oakland, Calif., headquarters.

An outside manufacturer will supply these products after the plant is closed, Lambert said. "The quality will be absolutely the same and the very best," she said. She would not reveal the supplier's identity.

Processed meats provided by the new supplier will continue to carry the chain's private label, with a more palatable price tag for the company.

"We have found overall we can purchase the products at a much lower cost," Lambert said. "We have to be able to compete."

"[Stockton was] far from the raw material in the Midwest. And with rising transportation costs, it just doesn't make sense."

Lambert said the high cost of labor also was behind the decision. Safeway considered making concessions, she said. "But they would have been substantial, and discussions [on the subject] were not fruitful."

Although she would not offer an estimate of how the change might translate in cost to consumers, she said the private label will be priced lower than the national brands.

"We've been looking at this issue across the company for the last few years," she said of the plant closing. "We are focusing on each plant as a single business entity that has to stand alone," she continued. Safeway has 28 other manufacturing plants across the country.

"This particular facility has not been profitable for several years. The plant has a lot more capacity than it is currently using," Lambert said. She added that the 125 workers employed at the plant had been "very productive.

"This is never an easy decision to make," she said.