The Federal Trade Commission and eight states announced Monday that they are suing to block supermarket chain Kroger’s $24.6 billion deal to buy smaller rival Albertsons, a deal that could cost millions of people more. They argued that it would push up food prices for Americans.
The deal would create a grocery empire with more than 4,000 stores, but came under intense scrutiny from lawmakers and consumer groups concerned about soaring food prices, job losses, store closures and fewer choices for consumers. Is receiving.
The FTC argued that the deal would eliminate “the intense competition between Kroger and Albertsons that leads to higher prices for groceries and other essential goods for millions of Americans.”
Kroger stock was trading down 1%. Albertsons stock rose 0.7%.
Kroger defended the deal, saying it has lowered prices every year since 2003 and would apply that business model to the combined company.
Kroger said in a statement that the FTC’s legal efforts “ensure that large, nonunion retailers like Walmart, Costco, and Amazon further increase their overwhelming and growing control over the grocery industry. It just enables and strengthens it.”
Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming are joining the commission’s federal lawsuit, according to the FTC.
California Attorney General Rob Bonta expressed concern about the lack of access to pharmacies and fresh food for poor people in rural areas and small towns.
The decision comes shortly after two states, Colorado and Washington, filed suit to block the merger, citing concerns about price gouging for consumers.
“This supermarket megamerger comes at a time when American consumers have seen their grocery prices steadily rise over the past few years. Kroger’s acquisition of Albertsons is expected to increase grocery prices for everyday staples. will lead to further price increases, further exacerbating the financial burden that consumers across the country face today,” said Henry Liu, director of the FTC’s Bureau of Competition.
Kroger said that if the Albertsons merger is blocked, retail giants like Walmart and Amazon will become “more powerful and less accountable.”
The FTC’s lawsuit agreement comes as the Biden administration opposes mega-mergers that risk price gouging affecting consumers in everything from pharmaceuticals to airline tickets.
In recent years, food inflation, from soaring prices for eggs and chicken to more expensive bacon and butter, has eaten away at incomes and dampened enthusiasm for the economy.
Kroger, the largest U.S. grocer by sales, is proposing to sell 413 stores and eight distribution centers to C&S Wholesale Grocers, with an additional 237 store cuts pending regulatory approval. He said it may be necessary to do so. The FTC argued that the proposal was inappropriate.
The deal is also opposed by at least six U.S. senators, including Sens. Elizabeth Warren and Bernie Sanders, who have emphasized the impact such consolidation in the grocery industry would have on consumers and suppliers. has submitted a letter to the FTC.
The merger, first announced in October 2022, also faced resistance from the International Food and Commercial Workers union, which represents more than 1 million workers in North America’s food and other essential industries, and last May voted against the merger. .
