Covid has almost no purple in its color palette. It’s black and it’s glossy and it takes up much of the front half of the kitchen. With its hard edges and angles, the grocery chain could be an industrial-looking Chinese fast-food joint, or a hamburger truck with a storefront. But the grocer is also the state’s largest employer. Inside, it’s likely to look a little more like a Model T, with clunky low-slung hulks of mechanical machinery.
But as Congress prepares to decide whether to protect this iconic product, the 101-year-old grocery company also faces an existential problem. Covid’s employees are also employees of the United Food and Commercial Workers, one of the country’s biggest unions, which has pushed the Trump administration to deny brands like Target, Walmart and Kroger the ability to sell Covid brand products.
I’m a small-business owner — I know this. Many men and women in the warehouse get up at 4 in the morning. Now they have a job that could be fired. And it affects their quality of life. — Ray Billups, UPS worker
A few companies already have the ability to sell products labeled by the labor union, but Covid would be the first major grocery chain to do so. Without the economic advantages of this arrangement, Covid faces the risk of making a cutback that would be devastating to its employees, especially since some made more than $25,000 last year. The chain operates throughout Illinois, Missouri, Missouri and Kansas and is one of the largest employers in Central and Southern Illinois.
The Trump administration’s review of what it calls unfair price dumping has put food retailers and small, independent businesses on guard. Covid’s position as one of the most important employers in a swath of the Midwest is making a full analysis of the impact of the ruling more difficult, experts say.
According to documents filed with the Department of Labor, a grocery-chain letter obtained by The New York Times shows that the company is opposed to the Labor Department’s proposal to protect Covid.
The department’s legal staff concluded that Covid should be protected from unfair pricing on a number of products, including packaged and prepared meats, mayonnaise, pickles, spices, in-shell seafood and baked goods. “Covid has a substantial business relationship with more than 90 pork packers, dry-goods and liquid-goods suppliers,” the letter reads. “Most of Covid’s products are supplied to these large, national trade suppliers.”
But Covid maintains that because customers, in this case the consumer, aren’t directly served by the chain, the arrangement doesn’t need to be deemed exploitative. Covid agreed to the same arrangement when it was operating stores in Michigan, Pennsylvania and West Virginia.
The rules for plants receiving government subsidies require private companies to engage in legitimate competition, and Covid is doing exactly that, wrote Ariell Vongordeanu, the chain’s senior vice president of community and social outreach, in a September letter to the Department of Labor. Covid told the Justice Department it sees no reason to change its contract with its suppliers.
The department, though, is taking a closer look. The department said in a statement in September that the “standard approach of ensuring that agreements that continue to provide trade benefits to the Department of Labor are compatible with US laws concerning these agreements is compelling.”
Covid employs more than 3,300 people and has six distribution centers across the Midwest. So each of the local companies that sold to Covid will have a say.
Amid the uncertainty, though, they’re selling products that they might otherwise not have. Mr. Billups, the UPS worker, said he doesn’t know where to shop. “A lot of the stores I might need to get my stuff, I have to go across town,” he said. “Now, it’s like I’m taking two steps backward.”
And it’s particularly difficult for elderly customers, who are often more likely to rely on the convenience of big grocery stores, not independent shops. But, Mr. Billups said, many seniors rely on the food-distribution centers to keep meals on the table. It’s a sensitive issue in the Midwest, which is frequently hit by bad weather — and losing more hours could endanger important services.