FTC Halts Kroger, Albertsons Merger
Following the Federal Trade Commission’s decision to block the proposed merger of Kroger and Albertsons, Kroger said the FTC’s moves will have a negative impact on consumers as well as workers.
The statement from the grocer came just after news of the FTC move to block the union of two of the nation’s largest supermarket chains that was first announced in the back half of 2022. The federal commission said the proposed deal will eliminate “fierce competition” between Kroger and Albertsons.
“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. “Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”
The FTC issued an administrative complaint and authorized a lawsuit in federal court to block the proposed acquisition pending the commission’s administrative proceedings. A bipartisan group of nine attorneys general from Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon, and Wyoming are joining the FTC’s federal court complaint.
Kroger claims the merger, if allowed to proceed, would benefit shoppers giving them access to products at lower prices and more choices. The company noted it is investing $500 million to begin lowering prices day one post-close, and an additional $1.3 billion to improve Albertsons Cos.' stores. This commitment, the grocer said, builds on Kroger's track record of reducing prices every year, with $5 billion invested to lower prices since 2003. Kroger's work to deliver better value to customers over the last 20 years has reduced its gross margins by 5%.
In a separate statement, an Albertsons’ spokesperson said of the FTC’s decision, “Albertsons Cos. merging with Kroger will expand competition, lower prices, increase associate wages, protect union jobs, and enhance customers’ shopping experience. If the Federal Trade Commission is successful in blocking this merger, it would be hurting customers and helping strengthen larger, multi-channel retailers such as Amazon, Walmart and Costco – the very companies the FTC claims to be reining in – by allowing them to continue increasing their growing dominance of the grocery industry.”
Store Brands sister publication, Progressive Grocer, reported support for the FTC’s move from the United Food and Commercial Workers International Union (UFCW), which represented 1.2 million workers in grocery, meatpacking, food processing, and other essential industries across North America.
“The FTC’s decision reflects clear concerns over the impact such a megamerger could have on workers, food prices, and millions of customers,” the union said in its statement. “As our delegates made clear last year at our International Convention, the UFCW stands — and will continue to stand — in opposition to any merger that would negatively impact our hundreds of thousands of hard-working members who work at Kroger and Albertsons."
