Food Group files for bankruptcy; village food stores sold

After several months of financial uncertainty and contentious labor negotiations , The Food Group, Inc. is filing for bankruptcy. Seven of the New Brunswick chain's 11 Vil lage Food Stores will be sold to Atlantic Wholesalers, a division of Loblaw Companies Limi ted. Four stores, as well as the Village Food warehouse, will close and about 400 employee s will lose their jobs.

It's hard to say why Village Foods failed and whether labor costs were a co ntributing factor," says Tom Cogswell, senior vice - president of sales and franchise opera tions for Atlantic Wholesalers. "Usually it takes more than one thing to bring a business down."

Last summer,...