The Federal Trade Commission (FTC) has sued to block the proposed merger between The Kroger Co. and Albertsons Cos., alleging that the deal is anticompetitive.
The FTC charges that the proposed deal will eliminate competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans. The loss of competition will 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 competition for workers, threatening the ability of employees to secure higher wages, better benefits and improved working conditions.
“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.”
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.
If the merger was completed, Kroger and Albertsons would operate more than 5,000 stores and about 4,000 retail pharmacies and would employ about 700,000 employees across 48 states.
In a statement released by the company, The Kroger Co. shared that “contrary to the FTC’s statements, blocking [the] merger with Albertsons Companies will actually harm the very people the FTC purports to serve: America’s consumers and workers.
“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.”
According to the FTC, executives for both Kroger and Albertsons have acknowledged that the two supermarkets are direct competitors, forcing each other to aggressively compete for customers by lowering prices and for employees by providing better pay and benefits across the country.
Similarly, executives for both have conceded that Kroger’s acquisition of Albertsons is anticompetitive, with one executive reacting candidly to the proposed deal: “you are basically creating a monopoly in grocery with the merger.”
Read more about the proposed merger of Kroger and Albertsons here.
