A federal judge on Tuesday blocked the disputed $25 billion merger plan between grocery chains Kroger and Albertsons, but said the merger would likely be struck down if Kroger wins its case with the Federal Trade Commission. I showed my point of view.
The FTC argued in a three-week trial in Portland, Oregon, that the merger eliminated direct competition between the top two traditional grocery chains, raising prices for shoppers and unionizing workers. They argued that this would reduce workers' bargaining power.
The ruling, which may be appealed, is a major victory for FTC Chair Lina Khan and the Biden administration to combat inflation. Americans' dissatisfaction with persistently rising food prices since the pandemic was a key theme in President-elect Donald Trump's victory in November.
U.S. District Judge Adrian Nelson agreed with the ruling, ruling that the merger would likely eliminate direct competition between the two grocery stores, making the merger illegal.
Albertsons shares closed down 2.3% on Tuesday. Kroger stock rose about 5%.
FTC spokesman Douglas Farrar said the ruling “will protect competition in the grocery market and prevent further price increases.”
“This statement victory makes clear that strong, reality-based antitrust enforcement delivers real results for consumers, workers, and small businesses,” said Farah.
Spokespeople for Kroger and Albertsons did not respond to requests for comment.
Kroger disputed the FTC's claims, arguing that the deal resulted in lower prices, especially at Albertsons stores, where prices are 10 to 12 percent higher than at Kroger stores.
Kroger said the combined company plans to fund the price reductions through cost savings that are expected to drive revenue growth in Kroger's data consulting business due to increased scale and an expanded customer base.
If the deal goes through, Kroger will own about 5,000 stores across the United States. The companies argued in court that the merger was necessary to compete with global conglomerates such as Walmart and Amazon.
Kroger and Albertsons also tried to convince Mr. Nelson that competition could be maintained if Kroger and Albertsons sold 579 stores, especially in western states near each other.
Grocery store unions have criticized the merger, saying it will likely lead to job losses, and attorneys general from 10 states and the District of Columbia have either joined the FTC lawsuit or filed their own lawsuits seeking to block the merger. Ta.
