The supermarket company's local managers and the leaders of United Food and Commercial Workers Local 1099 haven't talked in more than a week. The union said it is planning a strike preparation meeting Thursday night.

"Health care is the issue," said Art Wulfeck, spokesman for Kroger's Cincinnati division. The division's 70 stores stretch from Maysville in the east to Batesville in the west, and from Middletown in the north to Union in the south. Regarding progress toward a new contract, Wulfeck said: "We're no different than we were a week and a half ago."

Union officials believe their current five-year contract is the best within Kroger, so would they strike over it? The 141-day California supermarket strike and lockout that ended Feb. 29 cost Kroger and the union dearly in lost sales, profits, wages and jobs. Since then, Kroger has settled six contracts without a strike, in some cases extending contracts beyond expiration while continuing to negotiate.

Union officials were unavailable for comment Monday. They told union members in a letter Sept. 27 that the company's latest proposals "include an overtime takeaway, fewer seniority and job rights, less holiday pay, health care reductions with employee contributions, and fewer full-time jobs. ... There are deep divisions and serious problems at the bargaining table."

Kroger wants to alter work rules as it negotiates new labor contracts around the country. "Our goal in every negotiation is to achieve a ... balanced solution that provides our associates with quality health care and fair wages they need, at a cost that is fair to everyone involved, including Kroger customers," company vice chairman Rodney McMullen told analysts last month.

Kroger has been seeking concessions on wages and benefits.

It faces growing competition from nonunion companies such as Wal-Mart.

Kroger's labor cost "has been an important issue for years," said Chuck Cerankosky, grocery industry analyst for investment adviser Key McDonald in Cleveland. "If you look at some of Kroger's other markets, they have been able to grow in places like Atlanta, where they are the only union-organized food retailer, by having a very flexible contract.

"And that means market-based wages and benefits, and a certain level of work rules that allows them to operate with a competitive level of in-store labor productivity." Cerankosky estimates union work rules alone cost Kroger 2 percent of sales - more than $1 billion for a company with nearly $60 billion in annual sales.

McMullen told analysts last month that the company's expansion depends in part on getting the right labor cost structure. Kroger is slowly rolling out its big new "marketplace" stores - which sell broader assortments of food and merchandise - and recently announced it would build four of them in Columbus.

"If you look in Columbus, our division president there was able to work with the local labor union to get a cost structure in place that allowed that format to be competitive," McMullen said in September. "And that's one of the critical parts, as we roll it out, is to make sure that we have competitive costs, so that we have competitive pricing."

In Cincinnati, Local 1099's contract calls for a single tier of wages and company-paid health care. Union officials have said their members sacrificed wage increases in the past to maintain their health benefits.

The settlement in Southern California created a two-tier wage system, with new workers coming in at lower wages, and required workers to pick up more of their health care costs.

Kroger also settled a contract in Louisville in August with UFCW Local 227 after a nearly five-month extension. The contract raised base hourly wages more than 12 percent over three years, but did not create a two-tier wage structure.

More important, workers for the first time will be required to pay part of their health insurance premiums.

Single workers pay $5 a week, $10 a week to cover a spouse or child, or $15 a week to cover a family. All new workers pay the health premiums starting Jan. 1, but most current workers don't pay the premium until 2007.

"The major issue in negotiations - I don't care what union, what company - for the last three years has been health care," said Gary Best, president of Local 227.

He said the union is sensitive to Kroger's battle with Wal-Mart, and wants the company to succeed. "Any work force, any union, any company has to remain flexible. We understand we can't stop change. All we can do is manage it so there's the least negative impact and hopefully a positive impact," he said. "The company has to make money to stay in business. We just want our fair share."

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E-mail johnb@enquirer.com