Portland, Oregon – The Federal Trade Commission (FTC) launched a trial on Monday to block Kroger’s $25 billion merger with Albertsons, citing concerns about competition in the grocery store industry and potential harm to consumers. The proposed merger, announced in October 2022, involves selling nearly 600 locations to C&S Wholesale Grocers to address regulatory issues. Kroger has also pledged to lower grocery prices by $1 billion following the merger, the largest in the history of the industry.
FTC and several states have filed lawsuits against the merger, arguing that it could result in higher grocery prices for consumers and diminish the bargaining power of unionized workers in the industry. The trial, presided over by U.S. District Judge Adrienne Nelson, will examine the impact of the merger on competition and consumer welfare.
During the trial, both Kroger and Albertsons defended the merger, highlighting potential benefits such as lowering prices for shoppers at Albertsons stores, which currently see prices 10-12% higher than Kroger stores. Kroger’s attorney emphasized the need for the merger to compete with industry giants like Walmart, Costco, and Amazon-owned Whole Foods.
FTC Chief Trial Counsel Susan Musser stressed the importance of maintaining competitive markets to prevent rising grocery prices and encourage quality and innovation in the industry. The trial is expected to last approximately three weeks, focusing on evidence of competition in the grocery sector and the ability of C&S Wholesale Grocers to manage the divested stores post-merger.
Overall, the trial represents a significant effort by the Biden-Harris administration to protect consumer interests and strengthen antitrust regulations. With various states joining the FTC’s case against the merger, the outcome of the trial could have far-reaching implications for the grocery industry and competition in the market.