NASH FINCH FACING CLASS-ACTION SHAREHOLDER SUITS
re are the target of several class-action lawsuits filed late last month, each alleging the distributor misled investors with regard to its acquisition of Roundy's warehouses last year. Several law firms said they filed their suits in U.S. District Court in Minneapolis and said they sought investors who purchased Nash Finch stock between Feb. 24 and Oct. 20, 2005. The suits allege that Nash Finch, along with Ron Marshall, its chief executive officer, and LeAnne Stewart, its chief financial officer, violated securities laws in issuing statements regarding the February acquisition of two warehouses from Roundy's, Milwaukee. In October, Nash Finch slashed its earnings outlook, saying integration costs were higher than expected. In a statement, Nash Finch said the lawsuits were without merit.
MARSH ACCUSED OF BACKING OUT OF SUPPLY PACT
INDIANAPOLIS - Marsh Supermarkets here is scheduled to respond this week to charges it backed out of a supply agreement shortly after its distributor changed hands. In a suit filed in U.S. District Court here, Nash Finch, Minneapolis, said Marsh last year refused to place orders or accept deliveries from Nash's facility in Lima, Ohio. Nash acquired the Lima facility and its supply agreements in April from Roundy's, Milwaukee (see above). According to the suit, Marsh agreed in 2002 to purchase $60 million in goods from Roundy's but as of January 2005, had spent only $28 million. Nash Finch is seeking unspecified monetary damages and an injunction requiring Marsh to meet the obligations of its agreement.
JURY AWARDS WAL-MART EMPLOYEES $172 MILLION
OAKLAND, Calif. - A California jury awarded $172 million to thousands of employees at Wal-Mart Stores who said they were denied lunch breaks under state law. The Bentonville, Ark.-based retailer was ordered to pay $57 million in damages and $115 million in punitive damages, reports said. "We appreciate the jury's service, but disagree with its conclusion and will appeal," Wal-Mart said in a statement, adding that it acknowledged compliance issues when the law went into effect in 2001 but has since addressed the issue using cash-register technology.
UNIFIED WESTERN BOOSTS ANNUAL EARNINGS 46%
LOS ANGELES - Better productivity and cost controls helped Unified Western Grocers increase net earnings 46% to $10.8 million in the fiscal year ended Oct. 1, the retailer-owned wholesaler here said. Sales for the period were down 3.3% to $2.9 billion from $3 billion in fiscal 2004. The decrease was due to a 53-week fiscal year in 2004; lower sales compared with the 2003-2004 strike-lockout affecting three Southern California grocery chains; and the loss of one customer. This was partly offset by the opening of new stores by Unified's existing customers.
WHOLE FOODS SPLITS STOCK, JOINS S&P 500 INDEX
AUSTIN, Texas - Whole Foods Market here was scheduled to join the Standard & Poor's 500 Index after the close of trading last week, S&P said. It was to replace MBNA Corp., which is being acquired. Whole Foods previously had been part of the S&P 400 Mid-Cap Index. Separately, Whole Foods last week effected a previously announced 2-for-1 stock split.
NEW LABELING RULES TAKE EFFECT FOR CPG GOODS
WASHINGTON - New regulations for disclosing nutritional information on product labels took effect with the start of the new year. Effective Jan. 1, the Food and Drug Administration requires manufacturers to disclose the amount of trans fats in their products and to list the presence of eight allergen groups: tree nuts, milk, eggs, fish, crustacean shellfish, peanuts, soybeans and wheat.