Sunday, June 22, 2008

Vocal Cast of Critics and Advocacy Groups to Attend Tesco's Annual General Meeting On Friday, June 27

Joseph Hanson, the Washington, D.C-based president of the United Food and Commercial Workers (UFCW) union, which represents 1.3 million American supermarket industry workers, including those working at the major chains in the U.S. states of California, Nevada and Arizona where Tesco has its 61 Fresh & Easy Neighborhood Market grocery stores, will be attending Tesco's three hour Annual General Meeting (AGM) on June, 27, according to the union.

UFCW spokesman Michael Bride says the U.S. supermarket clerks' union has requested several meetings with Tesco's senior exectutives, which they've thus far declined. Therefore, Bride says union president Hanson and some of his aids have decided to show up at the Tesco AGM, which we be held at the UK Birmingham Motorcycle Museum this year, "in order to get their voice heard."

"We're using the AGM as one opportunity to let the various stakeholders know about our strong desire to work with the company (Tesco on union issues in the U.S. with Fresh & Easy)," says union spokesman Bride.

As we wrote about here on June 4, the UFCW has launched a major campaign, with a member of Britain's Parliament (MP) on its side, in the UK, which is designed to bring pressure on Tesco to come to the table and meet with union leaders in order to discuss unionization of the retailer's Fresh & Easy Neighborhood Market chain in the U.S.

This campaign comes on the heels of various ongoing UFCW organizing activities in the U.S. states of California, Nevada and Arizona, where the Fresh & Easy stores are located, that the UFCW has been conducting since the first of the small-format grocery stores opened in November, 2007. [You can read some of our coverage of those activities here.]

Fresh & Easy Buzz has learned the UFCW-UK Tesco campaign group plans to hold a press conference outside the annual meeting on June 27, as well as maintain a presence out front of the Motorcycle Museum, site of the meeting, all day with pickets and protestors urging Tesco to meet with union president Hanson.

Tesco's public position is the UFCW is free to organize its Fresh & Easy Neighborhood Market USA store-level employees per-U.S. labor laws, saying the decision to join or not join the union is the workers' choice.

The retailer hasn't offered any public statement as to why its refused to meet in a corporate capacity with the union's leaders and isn't required to do so by any U.S. labor law.

The American UFCW union won't be the only Tesco critic or advocacy group attending this years AGM on June 27. Far from it.

As we reported in this series of stories two weeks ago, UK chef and animal rights activist Hugh Fearnley-Whittingstall has placed a formal, written shareholder resolution on the agenda for the AGM. The resolution, if approved by shareholders, would force Tesco to change its current chicken welfare policy for the produced-in-the-UK chickens it sells in its stores.

The resolution if passed would no longer allow Tesco to sell "cheap chickens," which are birds raised in small battery cages, also called intensive chicken farming.

Tesco sells free-range and free-range organic chickens in its stores alongside the cheaper intensively-farmed birds. However, like at all supermarkets, the free-range and free-range organic chickens cost much more per pound. Tesco is famous in the UK for being the originator and biggest seller of the ~1.99 (British pound) per-Lb. chicken, which is in the price range most middle and lower income British consumers can afford.

If passed, Fearnly-Whittingstall's shareholder resolution could put Tesco at a serious competitive disadvantage when it comes to chicken selling vis-a-vis its food retailing competitors in the UK, as the resolution applies only to Tesco, leaving the other supermarket chains like Wal-Mart-owned Asda, Sainsbury's, Morrisons, Aldi and others to sell the cheaper chickens, which comprise the vast majority of birds purchased in UK supermarkets by British consumers, although sales of free-range birds is growing.

Foodie and chicken welfare advocate Fearnly-Whittingstall has become at master at public relations behind the chicken welfare issue and his shareholder resolution, generating tons of press and publicity in the UK's newspapers and on television about the resolution to be voted on at the AGM on June 27.

In fact, we've learned he will be gearing up that PR media machine for the Tesco AGM, bringing a group of supporters with him, along with his own television crew, to record and broadcast the day's events.

Fearnley-Whittingstall also has lined up some afinity groups to support him and his shareholder resolution. These groups include The UK's RSPCA animal right organization, who's chicken welfare guidlines Tesco says it adheres to, and the animal welfare group Compassion for World Farming, which says it will hold a major protest or action outside the Motorcycle Museum while the AGM goes on inside.

Additionally, the chef/chicken welfare activist has lined up the support of UK institutional shareholder advisory group PIRC, which advises the UK's public sector pension funds--government, schools and the like--on corporate ethics and governance issues. The PIRC is advising public sector pension funds that hold Tesco PLC shares to vote in favor of Hugh Fearnley-Whittisnstall's Tesco chicken welfare resolution.

Despite this coalition of support, the word on the street in the UK is that the chef/chicken welfare activist's shareholder resolution is likely to fail at the June 27 AGM because the majority of institution and major indivisual investors, who hold the majority of votes, will vote against it.

However, there is some concern within Tesco, as well as with its major investors, that with the PIRC on board, along with the growing popularity Fearnley-Whittingstall has generated for the chicken welfare issue and his resolution in the UK, that although it isn't likely there will be enough votes to pass the resolution, there could be enough votes to create significant embarrasment and negative publicty for Tesco on the issue.

Competitors like Wal-Mart-owned Asda, Sainsbury's and Morrisons has been very low-key on the issue, although they are privately relishing it a bit, according to UK industry analysts. However, since all three are publicly held companies, and subject to the same UK law which allows such shareholder resolutions, they know they could be next.

In addition to the UFCW union and Hugh Fearnly Whittigstall, and their supporters, a number of other groups plan to attend the June 27 AGM to voice their respective criticisims and points of advocacy regarding various Tesco practices and policies.

These include:

>Animal welfare group Care for the Wild International. The group says it plans to protest what is says are instances of cruel and inhumane treatement of live turtles in Tesco's Chinese stores. Live turtle is a popular item among Chinese consumers.

>The non-profit organization War on Want, which says it will have a representative from one of Tesco's factories in India at the AGM to deliver what it says is a less than positive report about worker conditions in that factory.

>Compassion in World Farming, another non-profit group which also said it will address what it says is less than positive treatment by Tesco of workers at factory's the retailer owns or contracts with.

>The environmental group Friends of the Earth, which says it will be at the AGM to call on Tesco to do more in terms of its commitment to the environment and global warming.

Meanwhile, there is concern inside Tesco that this year's annual meeting does "not turn into a carnival or three ring circus," a UK source close to Tesco told Fresh & Easy Buzz. He added Tesco CEO Sir Terry Leahy "does not want to be the ring master either." He might not have a choice?

There's also expected to be considerable discussion about Tesco's Fresh & Easy Neighborhood Market USA venture and perhaps a litle breaking news from the company about it. However, Tesco has no plans to release any sales data about Fresh & Easy at the annual meeting on June 27.

It's suggested by our UK source that Tesco executives get a very good night's sleep on June 26, as he says the 2008 AGM on June 27 is likely to be the most intense annual meeting in company history, and he's been to a number of them.

Fresh & Easy Buzz will be offering extensive coverage of the June 27 AGM. Stay tuned.

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