The Federal Trade Commission (FTC) has taken action to halt the proposed acquisition of Albertsons Companies by Kroger Company. The FTC has filed an administrative complaint and authorized a federal lawsuit to prevent the merger, which is set to be the largest in U.S. supermarket history. The commission alleges that the $24.6 billion deal would create an anticompetitive environment.
According to an FTC press release, the commission believes that this merger would "eliminate fierce competition" between these two major grocery store chains. The potential consequences of this could include higher prices for groceries and other essential items for millions of Americans. Furthermore, it could lead to a decrease in product and service quality due to reduced competition. The FTC also suggests that the deal would limit grocery shopping options and competition for workers, potentially impacting employees' opportunities for higher wages and improved benefits.
The press release further explains that if approved, the merged company would operate over 5,000 stores and approximately 4,000 retail pharmacies across 48 states, employing nearly 700,000 individuals. "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 Liu, director of the FTC’s Bureau of Competition.
In response to allegations of anti-competitiveness, Kroger and Albertsons proposed divesting several hundred stores and other assets according to the FTC press release. However, these proposals were rejected by the FTC as "inadequate" in its administrative complaint. The commission stated: "Kroger and Albertsons's inadequate divestiture proposal is a hodgepodge of unconnected stores, banners, brands, and other assets that Kroger’s antitrust lawyers have cobbled together and falls far short of mitigating the lost competition between Kroger and Albertsons."
