The United States Federal Trade Commission (FTC) filed a lawsuit on Monday to block a proposed $24.6 billion merger of Kroger and Albertsons, two of the nation’s largest grocery chains, alleging that the deal would “eliminate competition and raise prices for millions of Americans.”
According to the suit filed with the US District Court of Oregon, “the FTC charges that the proposed deal will eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans.” Attorneys general from Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia joined the suit, and the FTC also submitted an administrative complaint for consideration by a judge at the agency.
Kroger and Albertsons first announced their intention to merge in October 2022, sparking pushback from lawmakers almost immediately. The merger, which will see Kroger Co. pay $24.6 billion for its one-time rival, will help the chains compete with Walmart and other big grocery suppliers, securing an estimated 13 percent of the US grocery market. This will also mark the largest grocery merger in US history. However, according to government regulators, the union of the grocery and pharmacy chains would be catastrophic for workers and consumers.
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“This supermarket mega-merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today,” said Henry Liu, Director of the FTC’s Bureau of Competition. “Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”
The FTC complaint further alleges that the loss of competition in the grocery market would narrow customer choice, threaten workers’ ability to negotiate for better pay, and lead to “lower quality products and services.”
After the lawsuit was announced, both companies immediately said that they will contest the allegations in court.
“Albertsons Cos.’ merger with Kroger will ensure our neighborhood supermarkets can better compete with these mega-retailers, all while benefitting our customers, associates, and communities,” Albertsons representatives said in a prepared statement. “We are disappointed that the FTC continues to use the same outdated view of the US grocery industry it used 20 years ago.”
“This decision only strengthens larger, non-unionized retailers like Walmart, Costco, and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry,” Kroger said.
As one of the largest food and drug retailers in the US, Albertsons owns 2,273 stores and controls well-known subsidiaries like Safeway, Vons, Jewel-Osco, and Shaw’s. Kroger owns another 2,750 stores, with brands like Ralph’s and Harris Teeter under its umbrella. If the companies merge successfully, they will have more than 5,000 stores, 4,000 pharmacies, and 700,000 employees across 48 states.
Connor Walcott is a staff writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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