Heritage Foundation public finance economist E.J. Antoni discusses the potential Kroger-Albertsons merger and the decision's impact on the U.S. economy.
Federal Trade Commission (FTC) A lawsuit began Monday attempting to block Kroger's $25 billion merger with Albertsons, alleging the deal would weaken competition in the grocery store industry and harm consumers.
Kroger and Albertsons first announced the proposed merger in October 2022 and unveiled its divestiture plan in September 2023. The companies have agreed to sell about 600 locations to C&S Wholesale Grocers to help the deal pass regulatory muster. Kroger has also committed to lower grocery prices by $1 billion following the deal, which would be the largest merger in grocery industry history.
The FTC and several states sued to stop the merger, arguing that it would make groceries more expensive for consumers while reducing the bargaining power of unionized workers in the industry.
“Blocking this multibillion-dollar deal would allow for continued vigorous competition that would serve to curb rising grocery prices and promote improvements in quality and innovation,” FTC chief trial counsel Susan Musser said in her opening statement Monday.
Kroger-Albertsons merger: Is it good or bad for shoppers?
Kroger and Albertsons are defending their merger after the FTC and several states sued to stop it. (Shelby Tauber/Bloomberg/Getty Images)
Kroger attorney Matthew Wolf said in his opening statement that the merger would immediately reduce some costs. Prices for buyers At Albertsons, where prices are 10-12% higher than Kroger stores.
| Anchor | Security | Last | Change | Change % |
|---|---|---|---|---|
| ACI | Albertsons Companies | 20.84 | -0.09 |
-0.43% |
| KR | The Kroger Company | 52.77 | +0.82 |
+1.58% |
He said the FTC's effort to stop the deal shows “they understand neither the industry nor the parties within it,” and said the merger would help the stores compete with Walmart — the largest grocery retailer in the U.S. — as well as rivals such as Costco and Amazon-owned Whole Foods.
Albertsons and Kroger agree to halt merger amid legal, regulatory challenges
Albertsons and Kroger agreed to a $25 billion merger last year. (Ethan Miller/Getty Images)
The FTC's lawsuit represents a high-profile component The Biden-Harris Administration Alongside efforts to lower prices for consumers are efforts by FTC Chairwoman Lina Khan to use antitrust law as a means to increase pay and mobility for workers.
U.S. District Judge Adrianne Nelson is presiding over the case. Portland, OregonAnd she is considering whether the deal should be put on hold while the FTC's in-house judge investigates how the merger would affect competition.
Kroger, Albertsons identify nearly 600 locations they'll sell to get merger approved
FTC Chairwoman Lina Khan has sought to use antitrust law to strengthen workers' bargaining power. (Drew Angerer/Getty Images)
The trial is expected to last approximately three weeks and will feature evidence about competition in the grocery industry, as well as evidence about C&S Wholesale Grocers' ability to successfully operate the 579 divested stores it would acquire if it were to go through with the trial. Kroger-Albertsons merger Income.
Other challenges filed by the states of Colorado and Washington will be heard after the FTC's case, which has also been 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.