The U.S. Federal Trade Commission (FTC) filed a lawsuit on Monday to block the proposed $24.6 billion merger of grocery giants Kroger and Albertsons, citing concerns over potential increases in grocery prices.
In its complaint, the FTC said that Kroger’s acquisition of Albertsons would eliminate competition, leading to “higher prices for groceries and other essential household items for millions of Americans.”
“This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement.
The FTC also alleged that the proposed deal—the “largest supermarket merger in U.S. history”—would give the companies increased leverage over workers and their unions “to the detriment of workers.”
“Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating,” Mr. Liu stated.
Kroger is the biggest grocer in the United States by revenue, while Albertsons is the second-largest supermarket chain. If the deal goes through, nearly 5,000 grocery stores would be under one corporate umbrella.
The Offices of the Attorneys General of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming also joined the federal lawsuit, the FTC said.
Kroger Defends Albertsons Merger Deal
Responding to the FTC’s lawsuit, Kroger said it had reduced prices every year since 2003 and that the proposed merger with Albertsons would result in “even lower prices and more choices for consumers.”
“The FTC’s decision makes it more likely that America’s consumers will see higher food prices and fewer grocery stores at a time when communities across the country are already facing high inflation and food deserts,” Kroger said in a Feb. 26 statement.
Kroger said the lawsuit “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.”
The company also affirmed its commitment to investing $500 million to lower prices on day one post-close and an additional $1.3 billion to improve Albertsons stores.
“As large retailers continue to squeeze suppliers and raise prices, this merger creates more opportunities for families to access the fresh, affordable foods they love,” Kroger stated.
U.S. food prices have risen by 25 percent over the last four years, and while food inflation is showing signs of cooling off in 2024, grocery bills have become a growing concern for shoppers.
The merger deal would strengthen Kroger’s position as the second-largest player in the U.S. grocery market behind Walmart.
Washington’s attorney general, Bob Ferguson, filed a lawsuit last month to block the merger deal, citing concerns over job losses, increased prices, and reduced competition in the market.
“This merger is bad for Washington shoppers and workers, free enterprise is built on companies competing, and that competition benefits consumers,” Mr. Ferguson said.
According to court documents, part of Mr. Ferguson’s legal argument against the merger rests on the Washington State Constitution, which he says expressly outlaws monopolies and trusts.
“Transactions that may substantially lessen competition or tend to create a monopoly in any line of commerce are so injurious to the public interest that the legislature has expressly declared them unlawful in the Washington Consumer Protection Act (CPA),” the court documents say.
Mr. Ferguson’s lawsuit asks the court to declare the merger violates Washington antitrust law and to issue an injunction permanently blocking the merger nationwide.
“The supermarkets monitor each other’s prices and adjust the cost of products as part of that competitive relationship,” he said.
Stephen Katte and Reuters contributed to this report.
From The Epoch Times
