The Biden administration doesn’t want two of the largest grocers in the country to merge, and it’s suing to prevent that from happening.
On Monday, it was announced that the White House would be filing a lawsuit that would block the proposed merger of Albertsons Companies Inc. and Kroger Company. The administration claims the deal is anti-competitive.
The lawsuit, filed by the Federal Trade Commission, looks to stop the acquisition, which is valued at $24.6 billion. The FTC says that the two companies are in fierce competition now, and that would go away if they were able to merge.
The result would be that product quality overall would be lowered while prices would go up, the FTC said in a recent press release.
The Biden administration has been fairly aggressive in suing to block massive mergers, through both the Department of Justice and the FTC. The White House has also looked into the possibility of breaking up mega companies such as Amazon and Google, which they say are monopolies.
In the press release sent out this week, the FTC Bureau of Competition’s director, Henry Liu, said:
“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.
“Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing and their working conditions deteriorating.”
The two chains of grocery stores first approached the idea of merging back in October of 2022. The acquisition was always expected to form what’s being referred to as a “supermarket titan.”
If the deal were to go through, it would exceed the value of the prior largest supermarket deal in the U.S., which happened in 2006 when a group of investment firms that include CVS Health Corp. and Supervalu purchased Albertsons.
That deal was valued at about $9.8 billion.
A spokesperson for Kroger commented on the lawsuit to the Daily Caller News Foundation:
“The FTC’s decision makes it more likely that America’s consumers will see higher food prices and fewer grocery stores at a time when communities across the country are already facing high inflation and food deserts. In fact, this decision only strengthens larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry.”
If the proposed merger were allowed to go through, the new combined company would be in charge of more than 5,000 locations in 48 stores and employ about 700,000 workers, the FTC said.
Right now, these supermarkets operate as direct competitors to each other.
Axios reported that Albertsons is the fourth largest food retailer in the U.S., while Kroger is the second.
