NEWS WATCH: SUPPLIERS FACE SEC ACTION IN FLEMING PROBE...WAL-MART GETS NOTICE OF GRAND JURY LABOR PROBE...SPARTAN LAYS OFF 70 HEADQUARTERS STAFFERS

SUPPLIERS FACE SEC ACTION IN FLEMING PROBEKraft Foods all said last week they were notified by the Securities and Exchange Commission of possible civil actions as part of an ongoing investigation into trade practices at Fleming Cos., Dallas. The notifications, which are similar, allege that Dean, also based in Dallas; Frito-Lay, Plano, Texas; and Kraft, Northfield, Ill., helped the food distributor

SUPPLIERS FACE SEC ACTION IN FLEMING PROBE

Kraft Foods all said last week they were notified by the Securities and Exchange Commission of possible civil actions as part of an ongoing investigation into trade practices at Fleming Cos., Dallas. The notifications, which are similar, allege that Dean, also based in Dallas; Frito-Lay, Plano, Texas; and Kraft, Northfield, Ill., helped the food distributor book revenues in the months prior to its filing for Chapter 11 bankruptcy protection in April. A Kraft statement did not elaborate. In a conference call with analysts, Dean officials said the SEC notification cited two payments, totaling $2.7 million, that Dean made to Fleming in the second and third quarters of 2002. According to reports, Frito-Lay's case involved an employee signing documents for payments to Fleming worth $400,000. The companies said they were cooperating with the investigation.

WAL-MART GETS NOTICE OF GRAND JURY LABOR PROBE

BENTONVILLE, Ark. -- Wal-Mart Stores here said last week it has received formal notice of a federal grand jury investigation being conducted by the U.S. Attorney's Office for the Middle District of Pennsylvania, Scranton, Pa., into whether the company has violated immigration laws. A company spokesman told SN that Wal-Mart "was not surprised at all" to receive the notice, following the Oct. 23 raids in which approximately 250 subcontracted janitorial workers were arrested at 61 Wal-Mart locations in 21 states for allegedly violating immigration laws. The spokesman noted that "no company employee has received a target letter" in connection with the investigation, and that the hearings are expected to begin in mid-December. He added that Wal-Mart has "started its own, ongoing investigation" into the practices of the contractors and subcontractors that provide the company with janitorial services.

SPARTAN LAYS OFF 70 HEADQUARTERS STAFFERS

GRAND RAPIDS, Mich. -- Spartan Stores said it has eliminated approximately 70 administrative staff positions at its headquarters here. The company said it expects the staff reduction to lower operating costs by approximately $4 million annually. Spartan also said it will take a $1.5 million to $2 million non-recurring charge in the second half of fiscal 2004 for employee severance and pension benefit costs. The company added that approximately $1 million of this will consist of non-cash charges to adjust its pension liability for the staff reductions.

TWO ONLINE GROCERS EXPAND REACH TO NEW MARKETS

BOISE, Idaho -- Albertsons here said last week that Albertsons.com, its online grocery service, has begun to serve the Dallas/Fort Worth area. All online products are sold for the Albertsons store price, plus a $9.95 fee for home delivery or a $4.95 charge to pick up the order at any Albertsons store in the Dallas/Fort Worth area. Meanwhile, Peapod, the Chicago-based online grocery service, said last week it and Stop & Shop, Quincy, Mass., have begun serving the New Haven, Conn., metropolitan area. Peapod and Stop & Shop are both wholly owned subsidiaries of Dutch retailer Ahold.

ACME WORKERS RATIFY CONTRACT, PRESERVE BENEFITS

TOWSON, Md. -- United Food and Commercial Workers Union Local 27 here said its members ratified by a 2-to-1 margin a five-year contract covering approximately 1,000 workers at 11 stores operated by Acme Market, a subsidiary of Albertsons, Boise, Idaho. Buddy Mays, president, Local 27, said highlights of the contract include: across-the-board wage increases of 35 cents per hour in the first year of the contract, with increases of 30 cents each in years two through four; a 40-cent-per-hour increase in the company's pension contribution for all employees hired after 1983; and protection of current levels of health and welfare benefits.