The Biden administration has actively pursued legal actions against companies pushing for mega-mergers. Just weeks ago, the Justice Department sued to block a proposed merger between JetBlue Airways and Spirit Airlines. Now, the Federal Trade Commission has filed a lawsuit to halt Kroger Co.'s proposed $24.6 billion acquisition of Albertsons Cos, warning the merger would "eliminate competition and raise grocery prices for millions of Americans, while harming tens of thousands of workers."
The FTC filed a lawsuit in the US District Court for the District of Oregon on Monday. Nine attorneys general - from Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia - have joined the suit to block what the FTC describes as the "largest supermarket merger in US history."
"The FTC charges that the proposed deal will eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans," the agency said.
It continued: "The loss of competition will also lead to lower quality products and services, while also narrowing consumers' choices for where to shop for groceries."
And added: "For thousands of grocery store workers, Kroger's proposed acquisition of Albertsons would immediately erase aggressive 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.
Liu continued: "Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating."
In 2022, Kroger and Albertsons agreed to merge. The supermarket chains claimed the merger would allow them to compete with larger grocery chains like Walmart, Amazon, and Costco. A recent note by JPM analyst Ken Goldman showed that Kroger and Albertsons would control about 13% of the US grocery market share, while Walmart controls 22%.
"Albertsons Cos.' merger with Kroger will ensure our neighborhood supermarkets can better compete with these mega retailers, all while benefitting our customers, associates, and communities.," Albertsons wrote in a statement, adding, "We are disappointed that the FTC continues to use the same outdated view of the US grocery industry it used 20 years ago."
Kroger stated: "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."
The Biden administration has demonstrated that it will kill any mega deal during the election cycle. This was evident in the DoJ's recent suit against the planned merger between JetBlue Airways and Spirit Airlines.
The Biden administration has actively pursued legal actions against companies pushing for mega-mergers. Just weeks ago, the Justice Department sued to block a proposed merger between JetBlue Airways and Spirit Airlines. Now, the Federal Trade Commission has filed a lawsuit to halt Kroger Co.’s proposed $24.6 billion acquisition of Albertsons Cos, warning the merger would “eliminate competition and raise grocery prices for millions of Americans, while harming tens of thousands of workers.”
The FTC filed a lawsuit in the US District Court for the District of Oregon on Monday. Nine attorneys general – from Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia – have joined the suit to block what the FTC describes as the “largest supermarket merger in US history.”
“The FTC charges that the proposed deal will eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans,” the agency said.
It continued: “The loss of competition will also lead to lower quality products and services, while also narrowing consumers’ choices for where to shop for groceries.”
And added: “For thousands of grocery store workers, Kroger’s proposed acquisition of Albertsons would immediately erase aggressive 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.
Liu continued: “Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”
In 2022, Kroger and Albertsons agreed to merge. The supermarket chains claimed the merger would allow them to compete with larger grocery chains like Walmart, Amazon, and Costco. A recent note by JPM analyst Ken Goldman showed that Kroger and Albertsons would control about 13% of the US grocery market share, while Walmart controls 22%.
“Albertsons Cos.’ merger with Kroger will ensure our neighborhood supermarkets can better compete with these mega retailers, all while benefitting our customers, associates, and communities.,” Albertsons wrote in a statement, adding, “We are disappointed that the FTC continues to use the same outdated view of the US grocery industry it used 20 years ago.”
Kroger stated: “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.”
The Biden administration has demonstrated that it will kill any mega deal during the election cycle. This was evident in the DoJ’s recent suit against the planned merger between JetBlue Airways and Spirit Airlines.
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