The Federal Trade Commission made a bold move on Monday by filing a lawsuit to prevent the proposed merger between grocery giants Kroger Co. and Albertsons Cos. Inc. According to the FTC, the merger poses a threat to competition, consumer prices, and workers’ rights, along with potentially impacting product quality.
States Join the Fight
Joining the FTC in their complaint against the $24.6 billion deal are nine attorneys general from various states across the country, including Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia. If approved, this merger would become the largest in the history of supermarket acquisitions in the United States.
Concerns Raised
Director of the FTC’s Bureau of Competition, Henry Liu, expressed his concerns about the potential consequences of the merger. Rising grocery prices have already put a strain on American consumers, and the acquisition of Albertsons by Kroger could lead to further price increases. Additionally, essential grocery store workers may face challenges such as wage reductions, benefits cuts, and deteriorating work conditions if the merger goes through.
Regulatory Response
Despite efforts by both Kroger and Albertsons to alleviate regulatory concerns by proposing the sale of several hundred stores, the FTC has deemed these measures insufficient. As news of the lawsuit broke, Kroger’s stock experienced a 0.9% decline, while Albertsons remained flat.
