The Federal Trade Commission (FTC) sued to block the largest proposed supermarket merger in U.S. history—Kroger Company’s $24.6 billion acquisition of the Albertsons Companies, Inc.—alleging that the deal is anti-competitive.
The FTC reported that the offices of the Attorneys General of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming are joining the Commission’s federal lawsuit.
Recently, state attorneys general in Washington and Colorado filed similar lawsuits to block the merger of Kroger and Albertsons.
In the complaint, the FTC alleges that the proposed deal will eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other household essentials 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. 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.”
Related Article: Colorado Becomes Second State to Sue Kroger/Albertsons Merger
The government agency, tasked with enforcing federal antitrust and consumer protection laws against fraud, deception, and unfair business practices, added that the loss of competition would also result in lower-quality products and services while reducing consumer choice in where to shop for groceries.
About the impact on thousands of grocery store workers, the FTC’s complaint asserts that Kroger’s proposed acquisition of Albertsons would immediately erase aggressive competition for workers, threatening employees’ ability to secure higher wages, better benefits, and improved working conditions.
Kroger’s Response to FTC Lawsuit
In a statement, Kroger reacted to the announcement of the lawsuit filed by the FTC and nine state attorneys general.
“Contrary to the FTC’s statements, blocking Kroger’s merger with Albertsons Companies will actually harm the very people the FTC purports to serve: America’s consumers and workers.”
“The merging parties look forward to litigating this action in court so we can deliver the benefits of this merger to communities across America – lower prices, more choices, and more good-paying union jobs for decades to come.”
The Commission’s vote to file the administrative complaint and authorize the team to seek a temporary restraining order and preliminary injunction in federal district court was 3-0.
The federal court complaint and request for preliminary relief will be filed jointly with the state attorneys general in the U.S. District Court for the District of Oregon.
Independent Grocers and Unions Support Lawsuit
Following the FTC’s lawsuit announcement, several organizations expressed their support for the legal process to block the mega-merger of the two supermarket chains.
The National Grocers Association (NGA) president and CEO, Greg Ferrara, issued the following response:
“Every day, America’s local independent supermarkets face economic challenges due to the influence of massive power buyer chains who use their leverage over suppliers at the expense of smaller rivals in the marketplace. NGA appreciates the FTC’s commitment to preserving competition in the grocery sector.”
For its part, Marc Perrone, president of the United Food and Commercial Workers International Union (UFCW), which represents 1.2 million essential workers in the grocery, meat packing, food processing and other crucial industries across North America, said in a statement:
“The FTC’s decision reflects clear concerns over the impact such a mega-merger could have on workers, food prices, and millions of customers. As our delegates made clear last year at our International Convention, the UFCW stands – and will continue to stand – in opposition to any merger that would negatively impact our hundreds of thousands of hard-working members who work at Kroger and Albertsons.”
Meanwhile, Kroger stated that 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.
The grocery retailer warned that this decision only strengthens larger, non-unionized retailers like Walmart, Costco, and Amazon by allowing them to increase further their overwhelming and growing dominance of the grocery industry.