February 27, 2024

FTC Sues to Block Kroger-Albertsons Merger

On Feb. 26, 2024, the Federal Trade Commission sued to block Kroger Company’s $24.6 billion acquisition of Albertsons Companies, Inc. alleging that the deal is anti-competitive.

Announced in the fall 2022, Kroger’s agreement to purchase 100 percent of Albertsons would mean the merger of the No. 1 and No. 2 largest grocery store chains. According to the FTC’s case “the destruction of competition between these two head-to-head rivals risks raising prices, worsening services, and lowering quality for the millions of consumers who rely on Kroger and Albertsons for their groceries and other everyday goods.”

Henry Liu, Director of the FTC’s Bureau of Competition, states that the merger also would result in negative outcomes for grocery store workers: “Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing, and their working conditions deteriorating.”

In January 2023, Western Growers joined with the California Fresh Fruit Association and Colorado Fruit & Vegetable Growers Association to submit comments to the Federal Trade Commission (FTC) on this merger, stating that the decreased competition would affect suppliers of fresh produce in much of the same ways as the lawsuit filed this week states.

In his post Industry Pushes to Block Kroger-Albertsons Planned Merger, Western Growers Senior Vice President and General Counsel Jason Resnick said: “Western Growers urges the FTC to block Kroger from acquiring Albertsons. A Kroger-Albertsons mega-buyer would imbue the new behemoth with exceptional buying power capable of further squeezing its suppliers. The inevitable result will be further shrinking already skinny farm margins, lost farmworker jobs and earnings, and higher food prices. The merger is bad for just about everyone who is not a Kroger or Albertsons investor.”

While the FTC’s complaint alleges harm to consumers and harm to workers as justification for the agency’s legal action, the agency apparently did not take harm to suppliers into account.

For more information, visit the FTC’s press release announcement here.