Governors step into New England supermarket feud

BOSTON (AP) — As an employee revolt at a New England grocery store chain headed into its fifth week, the governors of Massachusetts and New Hampshire took the unusual step of personally stepping in to negotiations aimed at ending a standoff threatening the future of the popular low-priced supermarkets.

Massachusetts Gov. Deval Patrick and New Hampshire Gov. Maggie Hassan participated in negotiations Sunday with the owners of the Market Basket chain — feuding cousins Arthur T. Demoulas and Arthur S. Demoulas — as well as several other shareholders.

The chain has about 25,000 employees and 71 stores in Massachusetts, New Hampshire and Maine.

A long-running feud between the two cousins culminated in the ouster of Arthur T. Demoulas as CEO in June. His firing prompted worker protests and customer boycotts that have brought the private company to a virtual standstill.

The company has lost millions of dollars over the last four weeks as warehouse workers have refused to make deliveries and customers have shopped elsewhere in a show of support for the employees, leaving the stores with only a trickle of business.

Arthur T. Demoulas has offered to buy the 50.5 percent of the company owned by his cousin and other relatives on his side of the family.

Heather Nichols, a spokeswoman for Patrick, said the two sides made "real progress" on the terms of the sale and operating control of the company during the negotiating session. She said the governors are encouraged that a resolution may be "within reach."

Hassan's press secretary, William Hinkle, said the governor is hopeful that the leaders at Market Basket can resolve the standoff.

"Market Basket is a significant business in New Hampshire, and its role as an employer for thousands of dedicated employees and as a provider of affordable groceries for its customers impacts our economy and communities in many ways," Hinkle said in a statement.

Neither Demoulas cousin commented.

The company's board of directors met Monday, but the board did not release any details on the status of negotiations.

Employees continued to picket near the company's headquarters in Tewksbury.

The company's troubles have trickled down to its suppliers. On Monday, one of the chain's seafood suppliers said it has ended its business relationship with current Market Basket management.

In a letter posted on Facebook, Boston Sword & Tuna Chief Executive Tim Malley said his company suffered a significant loss in income after Market Basket warehouse workers stopped accepting deliveries. Malley said the company's new management was sympathetic, offered to pay part of its losses and said they had already started hiring replacement staff for the warehouse.

But Malley said that as the dispute dragged on, he watched as Market Basket's new CEOs "made one incredible strategic blunder after another." He said that after his staff complained to Market Basket about not receiving payments, his company was overpaid twice, once by about $83,000, and more recently, by more than $415,000.

"We think the time has nearly run out for saving this great institution and all those who depend on it. ...In our opinion, the only way forward is for the fired associates to come back," Malley wrote in the letter.

A spokesman for Market Basket said the shutdown of the warehouse and distribution system has affected all aspects of company operations, making it difficult for customers and vendors. The company is focused on trying to find solutions that address its distribution system.When Market Basket stopped accepting deliveries, the impact on us was significant. The wild product meant we were immediately buying 25-30,000 pounds per week less- a significant loss of income. The farmed salmon was a different story- we could not simply "not buy". It kept coming and we were suddenly in the position of having to sell an extra 25,000 of perishable seafood every week. We were forced to significantly discount the fish to sell it. Between that and the loss of wild seafood sales we were looking at the possibility of layoffs of up to a dozen or more employees. Boston Sword & Tuna President Michael Scola was able to get an appointment with management about ten days into the job action. They were very professional, and very sympathetic. They offered to do what they could to offset our losses, short of paying for fish they were unable to receive. An agreement was worked out between the parties to pay us every week a portion of our losses, and to catch up on unpaid bills from before the firing of Arthur T- an amount well into six figures. The weekly payment was only a fraction of the contract, and a smaller fraction of our overall losses. They assured Michael that "this will be over in a few days"- according to them they had already begun hiring drivers and replacement staff for admin and warehouse. This was the third week of July. Mike left with a check for most of the aging and payment for one week of salmon losses. When Market Basket stopped accepting deliveries, the impact on us was significant. The wild product meant we were immediately buying 25-30,000 pounds per week less- a significant loss of income. The farmed salmon was a different story- we could not simply "not buy". It kept coming and we were suddenly in the position of having to sell an extra 25,000 of perishable seafood every week. We were forced to significantly discount the fish to sell it. Between that and the loss of wild seafood sales we were looking at the possibility of layoffs of up to a dozen or more employees. Boston Sword & Tuna President Michael Scola was able to get an appointment with management about ten days into the job action. They were very professional, and very sympathetic. They offered to do what they could to offset our losses, short of paying for fish they were unable to receive. An agreement was worked out between the parties to pay us every week a portion of our losses, and to catch up on unpaid bills from before the firing of Arthur T- an amount well into six figures. The weekly payment was only a fraction of the contract, and a smaller fraction of our overall losses. They assured Michael that "this will be over in a few days"- according to them they had already begun hiring drivers and replacement staff for admin and warehouse. This was the third week of July. Mike left with a check for most of the aging and payment for one week of salmon losses. rom Norway- over 30,000 pounds per week. It is a great value for Market Basket customers, and has helped us grow our business with MB over the ten years we have worked together.Part of why it is so affordable is that we commit to one-year contracts every year. It is a two-way contract, meaning we contract with our Norwegian partners to buy a set quantity at a set price for a full year, and Market Basket makes the same commitment to us. When Market Basket stopped accepting deliveries, the impact on us was significant. The wild product meant we were immediately buying 25-30,000 pounds per week less- a significant loss of income. The farmed salmon was a different story- we could not simply "not buy". It kept coming and we were suddenly in the position of having to sell an extra 25,000 of perishable seafood every week. We were forced to significantly discount the fish to sell it. Between that and the loss of wild seafood sales we were looking at the possibility of layoffs of up to a dozen or more employees.

Last week, the company warned warehouse workers to return to their jobs by Monday or face termination.

Tom Trainor, a district supervisor who worked for Market Basket for 41 years before being fired last month for helping to organize the employee revolt, said that the approximately 300 warehouse workers and 65 drivers who have refused to make deliveries for the last month remained off the job Monday, despite the warning.

"They're still solid. They are not coming back (to work) until ATD (Arthur T. Demoulas) comes back," Trainor said.

"It's definitely encouraging that the two governors have realized that they're stakeholders in this. Having pressure from their offices is certainly welcomed by our wide," he said.