Safeway Inc. has reached a $2.25 million settlement with nine California counties, including Ventura County, over alleged false advertising and unfair competition.
The Pleasanton supermarket company was accused of charging consumers higher rates than Safeway’s lowest advertised price, as well as misrepresenting the weight of Safeway-branded products and promoting produce sourced from outside California and other countries as “locally grown.”
The food and drug retailer also was accused of violating a 2008 Marin County injunction when the company failed to initiate and maintain a program to minimize pricing discrepancies.
The suit was brought by the Marin County District Attorney’s Office, but district attorney’s offices in Alameda, Fresno, Napa, Sacramento, Santa Cruz, Solano, Sonoma and Ventura counties joined the suit. Funds from the settlement will go to the counties.
The settlement comes in the same week that Safeway announced it will merge with Albertson’s in a nearly $9 billion deal pending Federal Trade Commission approval.
The combined entity would have more than 2,400 stores, 27 distribution facilities and 20 manufacturing plants with 250,000 employees. It would be the second-largest supermarket company behind Kroger Co. of Cincinnati.
Bob Miller, Albertson’s chief executive, would become executive chairman, while Robert Edwards, Safeway’s president, would become chief executive of the combined company.