U.S. antitrust regulators actively presented their case to block Kroger’s $25 billion bid to acquire rival grocer Albertsons. The trial will wrap up on Tuesday, but the legal battle over the merger is far from over, with two more trials this month addressing concerns that the merger could increase grocery prices.
For the past three weeks, the U.S. Federal Trade Commission and a coalition of states have worked to prove in a Portland, Oregon trial that the deal would harm both shoppers and unionized grocery workers.
As this case reaches its conclusion on Tuesday, Kroger and Albertsons will already be on day two of another trial in Seattle, where Washington state’s attorney general challenges the deal. On September 30, a Denver judge will hear Colorado’s arguments against the merger.
“This situation significantly increases costs, extends the timeline, and creates additional hurdles for the companies,” said William Kovacic, an antitrust professor at George Washington University.
Kroger and Albertsons have already spent $864 million on merger-related costs this year, and they oppose all three legal challenges. Kroger argues that the merger will lead to lower prices and better wages.
“Blocking this deal will only benefit large, non-unionized companies like Walmart, Amazon, and Costco,” Kroger stated.
In Washington state, where Attorney General Bob Ferguson took the merger to trial on Monday, half of all grocery sales go through one of these two chains, and 124 stores are set to transfer to C&S if the deal goes through.
Ferguson claims that the merger will raise prices, reduce consumer choices, and allow Kroger to close unionized stores, reopening them as non-unionized.
“We look forward to standing up for Washingtonians in state court,” Ferguson said.
Colorado has also sued to block the merger, raising concerns from shoppers, workers, and local farmers who supply both chains.
“Colorado cares deeply about local food, and these two companies are direct competitors in this area. That’s crucial for farmers,” said Attorney General Phil Weiser.
At the Oregon trial, which began on August 26, the FTC and a coalition of eight states, along with Washington, D.C., brought in grocery executives, union leaders, and economists as witnesses to demonstrate that the deal would likely lead to price hikes and reduce workers’ bargaining power by removing competition between the two chains.
Kroger and Albertsons countered by asserting that the merger is essential for lowering prices at Albertsons stores and helping both chains compete with Walmart.
Kroger has stated that no stores will close as a result of the merger. However, this does not rule out the possibility of closures or consolidations in the future.
