The Federal Trade Commission (FTC) has sued to block the largest proposed supermarket merger in U.S. history: Kroger Company’s intended $24.6 billion acquisition of the Albertsons Companies, Inc. In an FTC-issued statement, the agency alleges that the deal is anticompetitive and potentially harmful to U.S. consumers, workers, and other companies in the industry.
FTC statement
The FTC maintains the proposed deal would eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other household items. Further, the agency states, loss of competition would also lead to lower-quality products and services, while also narrowing consumers’ choices for where to shop for groceries. For thousands of grocery store workers, Kroger’s proposed acquisition of Albertsons would immediately erase aggressive competition for workers, threatening the ability of employees to secure higher wages, better benefits, and improved working conditions, the statement declares.
“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,” says 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 issued an administrative complaint and authorized a lawsuit in federal court to block the proposed acquisition pending the Commission’s administrative proceedings. A bipartisan group of nine attorneys general is joining the FTC’s federal court complaint. Read the full FTC statement here.
Kroger response
Representatives from Kroger issued a swift response to the FTC statement, countering with their own claims that blocking the Kroger-Albertsons merger would actually hurt (rather than protect) U.S. consumers and laborers.
“Kroger has a proven track record of lowering prices so more customers benefit from fresh, affordable food, and our proposed merger with Albertsons will mean even lower prices and more choices for America's consumers,” the company declares in the response statement. “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. In fact, 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.”
The Kroger statement continues, “The proposed merger with Albertsons Cos. will produce meaningful and measurable benefits for customers, associates, and communities across the country. The combined company committed that no stores, distribution centers, or manufacturing facilities will close as a result of the merger, including those divested to C&S Wholesale Grocers.”
Kroger’s statement indicates the company plans to appeal the decision. Read the complete Kroger response here.
