EJ Anthony, public finance economist at the Heritage Foundation, discusses the potential merger between Kroger and Albertsons and the impact of the rulings on the U.S. economy.
the Federal Trade Commission A trial began Monday in its effort to block Kroger’s $25 billion merger with Albertsons, arguing the deal would undermine competition in the grocery store industry and hurt consumers.
Kroger and Albertsons The two companies first announced the proposed merger in October 2022 and unveiled the divestment plan in September 2023. The companies agreed to sell approximately 600 locations to C&S Wholesale Grocers to help the deal pass regulatory scrutiny. Kroger also pledged to cut grocery prices by $1 billion after the deal closes, which would be the largest merger in grocery history.
The Federal Trade Commission and several states filed lawsuits to block the merger, arguing that it would lead to higher food prices for consumers while reducing the bargaining power of unionized workers in the industry.
“Stopping this multibillion-dollar deal will preserve the strong competition that helps curb rising food prices and spur improvements in quality and innovation,” Susan Moser, lead trial counsel for the FTC, said in her opening statement Monday.
Kroger-Albertsons Merger: Good or Bad for Shoppers?
Kroger and Albertsons are defending their merger in court after the Federal Trade Commission and several states filed lawsuits to block the merger. (Shelby Tauber/Bloomberg via Getty Images)
Kroger attorney Matthew Wolf said in his opening statement that the merger would immediately reduce some Shopper prices At Albertsons stores, prices are 10-12% higher than at Kroger stores.
| Ticker | protection | last | It changes | % changes |
|---|---|---|---|---|
| Airport Institute of America | Albertsons Companies | 20.84 | -0.09 |
-0.43% |
| South Korea | Kroger Company | 52.77 | +0.82 |
+1.58% |
He said the FTC’s efforts to block the deal show “they don’t understand the industry or the parties within it,” adding that the merger would help the stores compete with rivals like Walmart — the largest grocery retailer in the United States — as well as Costco and Amazon-owned Whole Foods.
Albertsons, Kroger agree to pause merger amid legal, regulatory challenges
Albertsons and Kroger agreed to a $25 billion merger last year. (Ethan Miller/Getty Images)
The FTC lawsuit represents a prominent component of Biden-Harris Administration Efforts to lower prices for consumers, as well as Federal Trade Commission Chair Lina Khan’s efforts to use antitrust law as a means to boost wages and worker mobility.
US Judge Adrienne Nelson is presiding over the case in Portland, OregonIt is considering whether to put the deal on hold while an in-house judge at the Federal Trade Commission examines how the merger will affect competition.
Kroger, Albertsons Identify Nearly 600 Locations They’ll Sell to Get Merger Approval
Federal Trade Commission Chair Lina Khan has sought to use antitrust law to bolster workers’ bargaining power. (Drew Angerer/Getty Images)
The trial is expected to last about three weeks and will include evidence about competition in the grocery industry, as well as C&S Wholesale Grocers’ ability to successfully operate the 579 stores it would acquire if it were sold. Kroger-Albertsons Merger Returns.
Other appeals filed by Colorado and Washington are set to go to trial after the FTC case, which was joined by Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming and the District of Columbia.
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Reuters contributed to this report.