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Tesco’s Union Obstacle

Jim Prevor’s Perishable Pundit, March 9, 2007

The Pundit has long kept an eye on Tesco overseas. So since the company announced plans to come to America, we’ve been keeping an eye on what is happening with Tesco here in the U.S.

In our sister publication, PRODUCE BUSINESS, the Pundit had an exchange on the subject with Bryan Silbermann, President of the Produce Marketing Association. Bryan was focused on the convenient nature of the plan Tesco seems to be moving toward.

The Pundit was a bit more skeptical. You can read the exchange here.

In the Pundit we started our coverage with Tesco Challenges, and when we received a lengthy letter on the subject, we quickly followed up with Tesco, Part II.

Lately, we’ve been analyzing a research report entitled, It May be Fresh, But it Won’t Be Easy, on Tesco’s American venture from Credit Suisse with a series of articles:

We started out with Tesco’s Success Course Far From Easy and then ran a piece entitled, Tesco In America: Foodservice vs. Prepared Foods. We looked at Tesco vs. Costco, and then at Tesco vs. Target. Most recently, we looked at the real property element of the initiative in Tesco In America: Real Estate.

In that very first exchange with Bryan, the Pundit cautioned that “…our British friends will be shocked when they learn what operating in urban America is really like.”

So far Tesco is locating stores in semi-urban and suburban areas, but its executives are already learning about the kind of problems Tesco will have in America.

The Arizona Republic reported:

Anonymous fliers distributed in some Chandler neighborhoods in the past week read like they’re protesting a company accused of selling liquor to minors.

They’re really part of a national effort by a labor union to arouse public opposition against Tesco, a union-free grocer based in Great Britain that plans to build four stores in Chandler and many more across the Valley.

The one-page red, black and white sheets say Tesco “is currently facing numerous investigations in Britain for selling alcohol to minors” and asks residents to call or e-mail the state Department of Liquor License and Control. “We can still stop Tesco from selling alcohol by sending our comments and concerns,” it says.

The flier, which includes a photo of what appears to be a child’s juice box with the word “beer” on it, has no attribution. Mike Vespoli, director of community affairs for United Food and Commercial Workers Union Local 99, acknowledged that the union is behind them.

You can read the whole article here.

The truth is that the employees can vote to form a union if they so desire — that is the law. The whole point of this union effort is to intimidate Tesco to the point where it just caves and decides on its own to have a union — even if the employees don’t want one.

This liquor license thing won’t be a big deal, but it is a shot across the bow, a way for the unions to say they are going to focus on obstructing Tesco’s plans.

Too bad relations between the two aren’t exactly friendly. Otherwise Tesco could ask Wal-Mart for advice on how to handle such things.

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