JOLIET – The union representing warehouse workers at Central Grocers has filed a lawsuit to block the potential sale of the company.
Joliet-based Central Grocers has not confirmed that it is in the process of being sold, although one store owner said the grocery co-op in late February did send a letter to its members suggesting the possibility.
The lawsuit was filed Tuesday, the same day the company announced that it was in the process of selling a chain of grocery stores it owns and that it would close the Ultra Foods store in Joliet, along with eight other stores.
Teamsters Local 703 in the lawsuit indicated that a sale of the entire company may already be in process.
A memo supporting the Teamsters’ motion at one point states that “Central has confirmed it intends to sell to an unknown purchaser.”
The lawsuit stated that an attorney for Central Grocers told the Teamsters that the company “had entered into a letter of intent to sell its operations and/or facilities to an unidentified purchaser, but provided no other information relating to the intended sale.”
The Teamsters represent 300 employees at Central Grocers and are suing to ensure that the union contract will stay in place if the company or operations are sold.
The union does not represent employees at the supermarket chain owned by Central Grocers.
Central Grocers owns the Strack & Van Til chain, which includes Ultra Foods stores. Strack & Van Til announced Tuesday that Central Grocers was working with legal and financial advisers to sell 22 stores that will remain open as the company shuts down nine Ultra Foods stores.
Central Grocers has referred questions about its future to Joele Frank, a corporate communications firm in New York. Employees at the firm said they could not comment on Central Grocers’ financial condition.
The primary business of Central Grocers is supplying groceries, including meat and produce, and other products to its member stores. The company on its website states it supplies products to about 400 independent supermarket stores in the Chicago region, including northwest Indiana. Those stores included the two Certified Warehouse Foods supermarkets that closed in Joliet last week.
Certified owner Ken Clymer said he and other co-op members received a letter in late February advising them that Central Grocers was pursuing options, which he took to mean they were looking for a buyer.
“That’s pretty much how the letter read: We’re looking for someone to rescue us,” Clymer said.
Clymer said co-op members in 2016 did not receive the usual annual rebate they get for products bought from Central Grocers. At a company meeting in November, they were told the company experienced heavy losses, he said.
Central Grocers moved its corporate headquarters and distribution center to Joliet in 2009. The company has been in business since 1917 and distributes grocery products under the Centrella brand name. Other member stores in Joliet and Will County include Berkot’s Super Foods and Tony’s Finer Foods.