The Federal Trade Commission announced on Monday that it is suing to block Kroger and Albertsons from merging.
The FTC is arguing that Kroger’s $24.6 billion acquisition of Albertsons, the largest supermarket merger in history, is anti-competitive and would lead to higher grocery prices for consumers as well as lower-quality products and services. The FTC also contends it would hurt workers at grocery stores across the country.
“This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years,” said Henry Liu, director of the FTC’s Bureau of Competition. “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.”
The FTC, which under President Joe Biden has been critical of major mergers, argues that the acquisition would be harmful to store employees because it would reduce competition for wages and threaten a worker’s ability to get higher salaries and better working conditions.
“Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating,” Liu said.
On Monday, the FTC issued an administrative complaint and authorized a federal lawsuit, according to a news release from the agency. A bipartisan group of nine state attorneys general also joined the FTC’s federal complaint.
A spokesperson for Albertsons said in a statement that the company is disappointed by the development and said that the merger would “expand competition, lower prices, increase associate wages, protect union jobs, and enhance customers’ shopping experience.”
“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.
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Notably, while Kroger is the name of a specific grocery store chain, the broader company operates supermarkets under a variety of names, including Fred Meyer, Fry’s, Harris Teeter, and King Soopers, while Albertsons also operates under several names, including Safeway, Vons, Haggen, and Pavilions.
If the merger is approved, the combined company would employ some 700,000 people in 48 states, operating more than 5,000 grocery stores and 4,000 retail pharmacies.