US sues to block merger of grocery giants Kroger and Albertsons, saying it could push prices higher

The Federal Trade Commission sued to artifact a projected merger betwixt market giants Kroger and Albertsons, saying the $24.6 cardinal woody would destruct contention and pb to higher prices for millions of Americans.

The FTC filed a suit successful U.S. District Court successful Oregon connected Monday. It was joined successful the suit by the attorneys wide of 8 states and the District of Columbia.

Kroger and Albertsons, 2 of the nation's largest grocers, agreed to merge successful October 2022. The companies said a merger would assistance them amended vie with Walmart, Amazon, Costco and different large rivals. Together, Kroger and Albertsons would power astir 13% of the U.S. market market; Walmart controls 22%, according to J.P. Morgan expert Ken Goldman.

Kroger, based successful Cincinnati, Ohio, operates 2,750 stores successful 35 states and the District of Columbia, including brands similar Ralphs, Smith's and Harris Teeter. Albertsons, based successful Boise, Idaho, operates 2,273 stores successful 34 states, including brands similar Safeway, Jewel Osco and Shaw's. Together the companies employment astir 700,000 people.

But the merger, announced astatine a clip of precocious food-price inflation, was bound to get pugnacious regulatory scrutiny. U.S. prices for nutrient eaten astatine location typically emergence 2.5% per year, but successful 2022 they roseate 11.4% and successful 2023 they roseate different 5%, according to authorities data. Inflation is cooling, but gradually.

"Kroger's acquisition of Albertsons would pb to further market terms hikes for mundane goods, further exacerbating the fiscal strain consumers crossed the state look today," Henry Liu, the manager of the FTC's Bureau of Competition, said successful a statement.

The FTC, which said the projected woody would beryllium the largest market merger successful U.S. history, said it would besides erase contention for workers, threatening their quality to triumph higher wages, amended benefits and improved moving conditions.

The Biden medication has besides shown a willingness to situation large mergers successful court. Last month, the Justice Department sued to artifact a projected merger betwixt JetBlue Airways and Spirit Airlines.

The enactment by the FTC and the states follows lawsuits filed earlier this twelvemonth successful Colorado and Washington to artifact the merger. The states that joined the FTC suit Monday are Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming.

Kroger has promised to put $500 cardinal to little prices arsenic soon arsenic the woody closes. It said it besides invested successful terms reductions erstwhile it merged with Harris Teeter successful 2014 and Roundy's successful 2016. Kroger besides promised to put $1.3 cardinal successful store improvements astatine Albertsons arsenic portion of the deal.

Last year, C&S Wholesale Grocers agreed to acquisition 413 stores and 8 organisation centers that Kroger and Albertsons agreed to divest successful markets wherever the 2 companies' stores overlapped. C&S said it would grant each corporate bargaining agreements with workers.

Still, the United Food and Commercial Workers union, which represents 835,000 market workers successful the U.S. and Canada, voted past twelvemonth to reason the merger, saying Kroger and Albertsons had failed to beryllium transparent astir the imaginable interaction of the merger connected workers.

The national was besides captious of a $4 cardinal payout to Albertsons shareholders that was announced arsenic portion of the merger deal. Several states, including Washington and California, tried unsuccessfully to artifact the outgo successful court, saying it would weaken Albertsons financially.

Kroger and Albertsons had hoped to adjacent the woody aboriginal this year. But the 2 companies announced successful January that it was much apt to adjacent successful the archetypal fractional of Kroger's fiscal year. Kroger's fiscal 2nd 4th ends Aug. 17.