California and the West : Davis Vetoes Ban on Grocery Sales at ‘Big-Box’ Stores : Capitol: The measure, aimed at Costco and Wal-Mart expansion plans, sailed through Legislature in record time. Governor calls it anti-competition and anti-consumer.

Gov. Gray Davis vetoed a controversial bill Wednesday aimed at preventing discount giants Wal-Mart and Costco from expanding their “big box” operations into the lucrative California grocery business, saying the measure was “anti-competition and anti-consumer.”

The bill shot through the Democratic-controlled Legislature during the final 72 hours of the recently concluded session without normal public hearings or scrutiny.

“It represents the worst kind of end-of-session maneuvering by special interests,” Davis said in an unusually tough veto message.

The Democratic governor noted that the bill, AB 84, was “rushed through both houses with virtually no public notice, no public input and no demonstrated public need.” He criticized the process as deplorable, but indicated to reporters that some of the bill’s provisions had merit.

The bill, supported by organized labor and California’s biggest supermarket chains, took direct aim at mega-stores Wal-Mart and Costco, which, critics charged, intend to expand into the grocery and prescription medicine business with even bigger warehouse-style stores.

The bill, by Assemblyman Dick Floyd (D-Wilmington), would have prohibited local governments and state agencies from approving retail stores of more than 100,000 square feet if 15,000 square feet or more are devoted to sales of nontaxable merchandise, such as food and prescription medications.

In what appeared to be a modern record, the bill was created Sept. 8 and sailed through both houses of the Legislature in time for adjournment two nights later. It received no public hearing in the Senate, a violation of the rules, and only a perfunctory hearing in the Assembly shortly before the lower chamber adjourned for the year Sept. 10.

Davis said land use and zoning matters should be left to local government decision-makers and not be preempted by the state without thoughtful deliberation. He said government generally should not limit a consumer’s right to choose, and that “is exactly what this bill seeks to do.”

Primary backers of the bill included the California Labor Federation and the United Food and Commercial Workers, longtime political allies of Davis, and such major supermarkets as Food 4 Less, Pavilions, Ralphs, Safeway, Stater Brothers and Vons.

Their spokeswoman, Leslie Goodman, expressed disappointment at the veto and called it unfortunate that the extraordinary legislative process got in the way of the policy concerns of the bill.

“We had hoped that the governor would put politics aside in considering” the issue, Goodman said.

But Cynthia Lin, a spokeswoman for Arkansas-based Wal-Mart, which launched a massive customer campaign in favor of a veto, called Davis’ action a “major victory for California’s working families.”

“California consumers sent a loud and clear message: They want competition, good prices and a good quality of life,” she said. “This bill was an attempt by major supermarket chains and unions to stifle competition.”

Wal-Mart is nonunion, while about 40% of Costco workers are members of the Teamsters Union.

The bill was supported by Senate leader John Burton (D-San Francisco), Floyd and others who said that big operators such as Wal-Mart and Costco run their competitors out of business, cost jobs, renege on promises to produce major tax revenue for local governments and turn vibrant downtowns into economic ghost towns. Wal-Mart and Costco deny the allegations.

Davis did, however, sign into law Wednesday another bill aimed at bringing a measure of peace to cities and counties that engage in bidding wars for big box stores and auto malls because of the tax revenue they generate.

The bill, AB 178, by Assemblyman Tom Torlakson (D-Antioch), prohibits local governments from offering economic inducements to big retail stores or auto dealerships, which relocate from one jurisdiction to another, unless the winning entity agrees to share some of its sales tax revenues with the losing city or county.