The United Food and Commercial Workers (UFCW) union in Northern California has said it has terminated a contract extension with US grocery retailers Albertsons, Kroger's Ralphs and Safeway and set a negotiations deadline for midnight on 19 December.

As in many other recent negotiations in the industry, this dispute centres on company plans to increase employee contributions to health care and pension costs and introduce lower wage levels for new employees. Some 19,000 workers at nearly 300 stores in Northern California are affected by the current negotiations. The union said members at Albertsons, Ralphs and Safeway were prepared to vote, if necessary, to authorise a strike in locations throughout Northern California.

Similar negotiations in Southern California last year ended in a more than four-month long strike and lockout that proved costly to the retailers.

Safeway said the decision by the Local 588 union to impose a deadline would not change its objectives in the negotiations.

"We have maintained at every stage of this process that solutions to the challenges facing the unionised grocery industry would be found through good faith bargaining. To the extent that today's announcement by Local 588 reflects a preparedness to engage in the kind of dialogue needed to find these solutions, we applaud it. Our negotiations with Local 588 have been slow and difficult, but progress has been made and we believe it is well worth continuing the negotiations process," the company said.

Safeway and other unionised retailers say the increased health care contributions and lower wages are needed to enable them to better compete with non-unionised rivals such as Wal-Mart.
 
"If negotiations fail to produce an agreement we are prepared to continue serving our customers by keeping our stores staffed and running as usual," Safeway said.