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Tuesday, November 23, 2004 - Page updated at 12:00 A.M.

Fred Meyer accused of faulty meat pricing

By Peter Lewis
Seattle Times consumer affairs reporter

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In a lawsuit filed in Seattle yesterday, the Fred Meyer supermarket chain is accused of cheating consumers in five Western states, including Washington, by charging for the weight of packaging materials when it sets prices for meat products.

To individual consumers, the alleged loss amounts to pennies on the dollar per purchase; collectively, it adds up to more than $1 million per year in wrongful charges, the lawsuit asserts. It further alleges that Fred Meyer has allowed the illegal overcharging to go on for years, harming hundreds of thousands of consumers and violating Washington's consumer protection act.

In a statement today, the company said it works hard to earn the trust of its customers.

"We consider honesty and integrity to be our company's most important assets. . . Although we have not received a copy of the lawsuit, we take these allegations very seriously and we are conducting a thorough review of this matter."

However, the suit, which seeks class action status and was filed in King County Superior Court, alleges the company was repeatedly notified about the allegations by employees, and plaintiffs lawyers have letters dating to January 2003 showing that. The company rejected the allegations, according to a Feb. 20, 2003, letter on Fred Meyer letterhead.

"Those concerns have been investigated and, from the company's point perspective, resolved," according to the letter signed by Carl Wojciechowski, Fred Meyer's human resources vice president.

The suit focuses on the "tare weight" of meat products. Tare weight refers to the cellophane, soakers and plastic trays used to package meat. By state law, tare weight cannot be included in the purchase price, meaning the weight on the label should reflect only the net weight of the meat.

Lead plaintiff David Galego is the Fred Meyer employee whose concerns led to Wojciechowski's letter. Galego admits he was twice suspended by Fred Meyer for on-the-job mistakes but denies he is acting out of spite or for money. His lawyers say that if the case is successful, Galego's stake in the case is no more or less than other consumers included in the class, apart from a stipend for his time that he might get, subject to court approval.

Galego, 41, has worked for Fred Meyer for nine years and although he has a manager title he said he belongs to a union. He contends the chain's system for accounting for tare weight is particularly troublesome when it comes to "family packs" - packages with many pieces or large portions of meat.

For family packs, employees typically use bigger trays, add soakers and use more cellophane to wrap the meat - but do not adjust the tare-weight values Fred Meyer's central computer system automatically assigns to specific cuts of meat, he said. As a result, customers pay for packaging.

Galego's lawyers said that before filing the case, they hired John Moore, a former meat inspector in Arizona and Oregon who is now a private consultant, and statistician Bradford Craine, a math professor at Portland State University.
 
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In a sworn statement, Moore said he shopped at 30 Fred Meyer stores - 15 in Oregon and 15 in Washington - selected by Craine. Moore purchased a total of 257 packages of meat products, including beef, poultry, pork, lamb, buffalo and seafood, over an eight-week period ending last summer.

He determined that eight of the packages had the proper net weight for the meat, but 249 did not. "In other words, on 96.9 percent of the packages which I examined, Fred Meyer charged for more than the actual net contents of the package," Moore wrote.

He said the overcharges ranged from .01 pounds to .33 pounds. In an interview, Moore said his testing showed overcharging by Fred Meyer across the board - not just on his family pack purchases. Seattle attorney David Leen, a lead lawyer in the case, said the average overcharge was 16 cents per package. He said that though the class action is aimed only at Fred Meyer, "We are looking at other stores for these kinds of violations."

Plaintiffs lawyers estimate that as many as 130 Fred Meyer stores in five states - Alaska, Idaho, Oregon, Utah and Washington - could be affected by the lawsuit, although they may not all have sold meat. Fred Meyer is a division of Cincinnati-based Kroger Company, whose supermarket empire also includes QFC, Fry's and Ralphs.

The lawsuit states that the Oregon Department of Agriculture has repeatedly notified and warned Fred Meyer that it was wrongfully overcharging consumers for package weight. Oregon records reflect violations for selling less than the quantity represented for items including beef cube steak, hams and lobster tails.

Andrea Boyer, office manager of the department's measurement standards division, said that inspectors have found problems at Fred Meyer. But she also said the chain's record was no better or worse than that of comparable retailers.

Larry Kanouse, a weights and measures supervisor in the Washington Department of Agriculture, said most businesses are "really honest" and most problems he's encountered involve mechanical problems with scales. He said he was aware of no tare-weight problems involving major outlets, including Fred Meyer.

On the other hand, Kanouse said most enforcement actions result from complaints, and most consumers don't have the time, motivation or equipment to figure out if they got a true weight.

In his declaration, Moore said that before he made his Fred Meyer meat purchases last summer, Oregon authorities had sent a notice of violation regarding consumer overcharging to the CEO of Kroger Corp. That resulted in "assurances from the highest levels of management that the problems would be resolved," Moore wrote.

Galego says he first brought the alleged problems to management's attention in April 2002. He said he approached attorneys only after his bosses ignored his requests to fix the system to be fair to consumers.

Galego admitted he has twice been suspended for mistakes on the job, first for mishandling a large turkey order and again for an error involving tare weight. That second mistake, he said, caused him to educate himself about appropriate measurements, to discover discrepancies in Fred Meyer's system, and ultimately to contact lawyers after the company blew him off and allegedly started harassing him.

Galego said he received strong employee evaluations until he started pressing for reform on tare weight. Since then he has received no annual appraisal, and without an appraisal, his chances of promotion are nil, Galego said.

Galego also said he brought his concerns to the attention of Oregon regulators, adding they didn't have the resources to follow through thoroughly - an assertion the state does not deny.

In his February 2003 letter to Martin Dolan, a Portland attorney who also represents Galego, Fred Meyer's Wojciechowski wrote that "product that is packaged at the store level must be done in accordance with company policy. If that policy is followed, there should be no question as to 'tare' weights."

Though Wojciechowski did not spell out that policy, Galego said he was referring a supposed policy to adjust the tare weight as necessary. At a minimum, Galego asserts, Moore's findings unmask a "training issue" at Fred Meyer meat departments.

"This is very important to me," he said of the issues raised in the lawsuit. "This was a problem I brought forward to them," referring to Fred Meyer.

The suit seeks to represent all consumers who have purchased meat products from Fred Meyer over a period of years yet to be determined. Lawyers said that after their fees and possible nominal payment to Galego, any proceeds could be distributed to a food bank or to a homeless shelter, or turned into in-store coupons good for a discount on meat. The suit seeks a court order to block Fred Meyer from violating state laws barring unfair and deceptive trade practices.

Leen said it's possible Fred Meyer may not be the only supermarket that is overcharging, "but that doesn't mean it's right. We're paying enough for consumer products in this country. They (supermarkets) don't need to put their finger on the scale," he said.

Copyright © 2004 The Seattle Times Company

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