The Federal Trade Commission (FTC) filed a lawsuit against Kroger’s proposed $24.6 billion acquisition of Albertsons, the largest-ever supermarket merger in the US. The FTC alleges that the merger would result in higher prices for consumers and reduce product quality.
The lawsuit, filed in Oregon, contends that the merger would limit consumer choice and harm thousands of store workers, impacting their ability to negotiate better pay, benefits, and working conditions.
Kroger countered by claiming that blocking the merger could result in higher prices for consumers. Both companies expressed readiness to defend their case in court.
Henry Liu, the FTC’s competition bureau director, emphasized concerns about rising grocery costs for consumers, citing the potential for further price hikes if the merger proceeds.
Combined, Kroger and Albertsons operate in several dozen states, boasting over 5,000 stores and employing nearly 700,000 workers across 48 states.
The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming have joined the FTC lawsuit against Kroger’s proposed acquisition of Albertsons.
Kroger and Albertsons have proposed divesting hundreds of stores to address regulatory concerns. However, the FTC argues that this proposal falls short of mitigating the competition lost due to the merger.
Kroger responded by stating that blocking the merger would harm consumers and workers, leading to higher food prices and fewer grocery stores. They criticized the FTC’s decision, particularly in light of existing challenges such as high inflation and food deserts in communities across the country.
Albertsons expressed concern that if the FTC blocks the merger, it would benefit larger retailers like Amazon, Walmart, and Costco, allowing them to further dominate the grocery industry. They argued that this outcome would ultimately harm customers.