Historic grocery merger blocked

Feds and states team up to stop Kroger’s $24 billion deal

By Forrest J.H.

Shots have been fired in the battle between the government and two of the country’s largest grocery store chains who seek to grow even larger.

The Federal Trade Commission, eight states and the District of Columbia have sued to stop Kroger from acquiring Albertsons for $24.6 billion, the largest-ever proposed supermarket merger in American history.

The lawsuits claim the two supermarket giants combining would disadvantage workers and lead to more expensive groceries.

That’s a common worry as grocery prices have risen about 25 percent since January 2020, outpacing the 19 percent inflation rate over the same time period. As Kroger and Albertsons have huge overlap, critics of the acquisition say the merger is bound to hurt shoppers and employees alike.

“If big grocery stores are allowed to reduce competition this way, they can charge higher prices for food for no good reason,” Oregon Attorney General Ellen Rosenblum said in a news release. “Working conditions and employee benefits can suffer as well.”

Arizona, California, Illinois, Maryland, Nevada, New Mexico, Wyoming and Washington D.C. have signed onto Oregon’s case. Colorado and Washington State have also sued in state courts to stop the acquisition.

Kroger and Albertsons claim they need to combine against strength of other giants like Amazon, Walmart and Costco, who are larger and non-unionized. In a news release, Kroger promised all of its associates “education and financial literacy benefits” following the merger and vowed no stores would close.

Washington’s Attorney General outlines how Kroger became the state’s largest grocer.

They have also outlined a plan to sell off stores to another company where the markets overlap, which occurs particularly in the West.

Washington State’s attorney general criticized that plan, pointing to Albertsons’ 2015 and 2016 purchases of Safeway and Haggen supermarket chains, which also led to big overlaps. Albertsons divested some stores, but was later able purchase many again, sometimes for as low as $1.

Kroger and Albertsons remain vigilant to complete to merger, however. They have even set up a KrogerAlbertsons.com, which opens with a disclaimer warning the public they essentially do not have any responsibility to make good on any of the things they claim make the merger appealing. Simply click “I agree,” to gain access to those claims on the website.

The website does quote one union chapter that supports the merger, but the United Food and Commercial Workers Union has repeatedly and officially adopted a stance against it.

Kroger employs about 430,000 people and Albertsons employs about 290,000. If the purchase goes through, Kroger would hold under its umbrella roughly 5,000 stores and 4,000 pharmacies across 48 states, including Fred Meyer, QFC, Harris Teeter, Acme, Safeway, Haggen, Shaw’s and many more. According to numbers from 2022, Kroger and Albertsons could bring in around $220 billion a year in revenue, though both companies have grown significantly more valuable since then.

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This article’s ingredients

Federal Trade Commission lawsuit

February 26, 2024

https://www.ftc.gov/system/files/ftc_gov/pdf/d9428_2310004krogeralbertsonsp3complaintpublic.pdf

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