Business & Tech

Market Basket Decision Could Come by Week's End

Company's fish vendor cuts ties, questions if CEOs are trying to sabotage the company.

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By Liz Taurasi

Following weekend negotiations that included input from two state governors, the ongoing fight over the supermarket chain by family members could come to an end by week’s end.

The fighting family members have promised to do all they can to reach a deal and save the company which is losing millions as the walk off continues, the Boston Globe is reporting. The Globe is also reporting Market Basket’s board met on Monday.

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This comes on the heels of a meeting over the weekend with both sides of the Demoulas family, which included Massachusetts Governor Deval Patrick and New Hampshire Governor Maggie Hassan.

Market Basket employees have entered their fifth week of showing support for ousted CEO Arthur T. Demoulas. Demoulas was ousted in June when a majority of the company’s board shifted in support of Arthur T.’s cousin and rival, Arthur S. Demoulas.

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Arthur T. Demoulas and his shareholders want to buy the chain and have made an offer to purchase the other 50.5 percent share of the company. In a statement released last week, a spokesman for Arthur T. Demoulas said, “thus far, his offers have been rejected, not on the basis of price, but with counterproposals that have been laden with onerous terms that are far beyond comparable transactions.”

Last Wednesday, Gov. Deval Patrick said the two sides were nearing a deal to end the standoff, days after he disclosed that his wife Diane works for the law firm representing the company’s independent directors. At that time, Patrick said he spoke with both sides of the dispute and a deal is in the works. He also called for Market Basket employees to return to work.

On Thursday, Market Basket executives ordered workers to remove “Boycott Market Basket” signs from storefronts. Workers have urged customers to boycott the chain’s 71 stores in northern New England. Business is reportedly down by about 80 percent amid the revolt.

In the past few weeks, Market Basket customers have been forced to shop elsewhere, some in a show of solidarity with the workers and many because store shelves are mostly empty. Market Basket has been experiencing significant losses, and the impact has extended to neighboring stores and Market Basket’s suppliers.

Seafood Supplier Cuts Ties

On Monday, one of the supermarket’s seafood suppliers, Boston Sword & Tuna ended its relationship with the company. An open letter issued by the company’s CEO Tim Tim Malley said the decision to break ties was due to the impact the boycott had on the company after Market Basket workers stopped accepting deliveries and issues with payments came to light.

“When Market Basket stopped accepting deliveries, the impact on us was significant,” Malley said in the letter issued Monday.

Boston Sword & Tuna found itself immediately buying 25,000 to 30,000 less wild product each week, which was a significant loss of income to the company. The distributor also couldn’t not buy its farmed salmon.

“It kept coming and we were suddenly in the position of having to sell an extra 25,000 of perishable seafood every week,” Malley said. “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.”

Additionally, Malley said the company had not been receiving payments, but then was overpaid twice. Once in the amount of $83,000 and then another by more than $415,000.

“We were dumbfounded,” Malley said in the open letter. “In my mind there could be only two answers to these accumulating mistakes and self-destructive strategies. One was that the CEO’s were way over their heads. How many mistakes like this were being made? How would the shareholders from either side of the feuding family feel knowing that mistakes of this magnitude were being made. The only other explanation seemed to be a deliberate attempt to sabotage the future of the company.”

Boston Sword & Tuna had been a vendor with Market Basket for 10 years.

(Photo: Market Basket customers rally in Tewksbury on August 16. Photo Credit: Christa Lamb of North Andover)

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