The National Grocers Association (NGA) has expressed positive feedback regarding the updated merger enforcement guidelines. The proposed draft submitted by the Federal Trade Commission and U.S. Department of Justice includes considerations for new mergers that would benefit buyers and sellers alike, according to a July 20 report from The Packer.
“NGA is pleased to see federal antitrust enforcers take seriously the competitive concerns that arise when dominant firms abuse their buyer power to impose discriminatory terms on their rivals,” Chris Jones, SVP of government relations and counsel at NGA, said, according to The Packer. “NGA and its members have consistently warned federal antitrust officials about how U.S. consumers are worse off due to buyer power abuses in an increasingly consolidated grocery sector."
One proposed merger closely watching the new guidelines is one between the Kroger Company and Albertsons, The Packer reported. These independent grocers reported feeling encouraged government leaders are working to prioritize the effects of such mergers on buyer power. The companies hope to merge by early 2024.
According to data released by Washington, D.C.-based non-governmental organization Food and Water Watch in November 2021, approximately 69% of all U.S grocery sales are generated by only four national grocery retailers, two of which are Kroger and Albertsons, The Packer said.
One of 13 proposed guidelines is intended to limit buyer power and merger deals that would decrease competition from other sellers, according to The Packer. The trade group continues reviewing the impact of the merger guidelines toward the independent supermarket industry. An update will be provided before the new draft deadline, scheduled in 60 days.
“This problem has been laid bare by pandemic-era supply chain disruptions and increasing food price inflation where independent grocers have been put at critical disadvantage relative to their dominant competitors, especially those who serve rural and urban communities,” Jones said to The Packer.
Despite the positive response from most grocers, CEO of Findlay, Ohio-based Fresh Encounter Inc. and NGA member Michael Needler Jr., credited with operating nearly 100 grocery stores, highlighted the potential negative effects the Kroger-Albertsons merger could have on smaller grocers.
