On Monday, the Federal Trade Commission (FTC)—along with eight states and Washington, D.C.—revealed its legal action to prevent the merger of Kroger and Albertsons.
The FTC asserts that Kroger’s $24.6 billion acquisition of Albertsons, the most extensive merger in supermarket history, is anti-competitive.
It argues the merger would result in increased grocery prices for consumers, diminished product quality and services, and adverse impacts on grocery store workers nationwide.
Kroger’s parent company operates supermarkets under various names like Fred Meyer, Fry’s, Harris Teeter, and King Soopers. Albertsons operates under names including Safeway, Vons, Haggen, and Pavilions.
If the merger were to proceed, the unified entity would have around 700,000 employees across 48 states, overseeing a network of over 5,000 grocery stores and 4,000 retail pharmacies.
Under President Joe Biden’s administration, the FTC, known for its scrutiny of significant mergers, contends that the acquisition would negatively impact store employees and “eliminate fierce competition.”
The director of the FTC’s Bureau of Competition, Henry Liu, said: “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,” he added.
In a statement, an Albertsons spokesperson expressed disappointment with the development, emphasizing the potential benefits of the merger including lower prices, increased associate wages, and protected union jobs.
“If the Federal Trade Commission is successful in blocking this merger, it would be hurting customers and helping strengthen larger, multi-channel retailers such as Amazon, Walmart and Costco — the very companies the FTC claims to be reining in — by allowing them to continue increasing their growing dominance of the grocery industry,” the spokesperson said.
The FTC’s federal lawsuit received support from attorneys general representing Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia.
