The FTC sues to block Kroger and Albertsons merger

The Federal Trade Commission today said it’s suing to block the proposed merger between Kroger and Albertsons, calling the country’s largest supermarket merger in history anticompetitive.

The FTC issued an administrative complaint and filed a lawsuit in federal court in Oregon, it said in a statement, with the support of a bipartisan team of nine attorneys general. Kroger’s proposed $24.6 billion acquisition of Albertsons was first announced in October 2022; the two grocers want to compete with Walmart and Amazon, with a potential combined store count of over 5,000.

The agency alleges the deal would lead to higher grocery prices, “further exacerbating the financial strain consumers across the country face today,” Henry Liu, director of the FTC’s Bureau of Competition, said. The deal could result in lower quality products and services and fewer options for consumers, the agency claimed.

The merger could also “erase aggressive competition for workers,” and negatively impact their ability to negotiate over wages, benefits, and working conditions. The two grocers are the largest union grocery labor employers in the country, and in regions like Denver, the only employers of union grocery labor, the FTC noted.

The proposed merger has previously garnered pushback from workers, lawmakers, and consumers over similar concerns.

The FTC also criticized Albertsons and Kroger’s September divestiture of 413 stores to New Hampshire-based grocery company C&S Wholesale Grocers for $1.9 billion. The agency called it “a hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together” that doesn’t make up for the potential loss of competition.

Kroger and Albertsons both expressed plans to challenge the FTC in court. Kroger said in a statement that the move to block the merger will “actually harm the very people the FTC purports to serve: America’s consumers and workers,” saying it could lead to higher prices and fewer stores by strengthening non-unionized retailers such as Walmart and Amazon.

Albertsons echoed this sentiment in an emailed statement to Retail Brew.