Kroger-Albertsons Merger: FTC will Take More Time to Review Grocery Megadeal Between Kroger and Albertsons

Washington, D.C. – The Federal Trade Commission (FTC) has announced an extension of the review period for the proposed $25 billion merger between Kroger and Albertsons, two grocery giants poised to reshape the retail food market. U.S. Senator Ron Wyden has expressed deep concerns about the potential impact on consumers in Oregon and across the nation, urging the FTC to block the deal.

Wyden’s Urgent Plea

Kroger-Albertsons Merger: FTC will Take More Time to Review Grocery Megadeal Between Kroger and Albertsons. Carrs Safeway in Midtown Anchorage.
Kroger-Albertsons Merger: FTC will Take More Time to Review Grocery Megadeal Between Kroger and Albertsons. Carrs Safeway in Midtown Anchorage.
(Bill Roth / ADN file)

In a letter addressed to FTC Chair Lina Khan, Senator Wyden emphasized his worries about the merger’s adverse effects on Oregonians. He highlighted potential reductions in pharmacy options, economic opportunities for small farmers, and the overall well-being of Oregon’s workers and consumers. Wyden also raised privacy concerns, citing Kroger’s policies on sharing patient information with law enforcement without warrants.

The senator urged the FTC to draw lessons from a similar divestiture proposed by Albertsons-Safeway a decade ago, which ultimately saw the buyback of many divested stores and the demise of others. Wyden’s call to action resonates against the backdrop of a broader consolidation crisis in the retail food market.

FTC Seeks More Time

The FTC, in its pursuit of a thorough evaluation, has sought an extension to decide on the merger. Originally set for a decision by December 15, the new deadline is now January 17. This move comes in the wake of a lawsuit in California filed by some shoppers from the two grocery chains, adding complexity to the already intricate review process.

Kroger has taken proactive steps to address antitrust concerns, including the sale of 413 stores to C&S Wholesalers, aiming to maintain a competitive landscape within the sector. However, critics argue that both Kroger and Albertsons continue to exceed profit and sales expectations, undermining their case for the necessity of the merger to compete with retail giants like Walmart and Amazon.

The Shopper Lawsuit Saga

The California lawsuit, initially rejected in August but subsequently refiled, claims that the Kroger-Albertsons merger would eliminate a significant competitor, leaving consumers in many communities with limited grocery shopping alternatives. The suit questions the $4 billion special dividend paid ahead of the merger, proposing its return to prevent potential harm to Albertsons.

Opposition

Beyond traditional antitrust concerns, grocery store workers and unions have entered the fray, offering a unique perspective. A recent study supported by unions argues that the merger could harm labor market competition, leading to reduced wages and working hours. This unconventional argument challenges the FTC to broaden its scope beyond consumer prices and consider the impact on labor markets.

Details In Short:

  1. Date & Timeframe: The FTC extended the Kroger-Albertsons merger review to January 17, 2024, from the original deadline of December 15.
  2. Location: Nationwide impact with specific concerns for Oregon consumers.
  3. Concerned Party: U.S. Senator Ron Wyden urges FTC to block the merger.
  4. Specific Concerns by Wyden: Fewer pharmacy options.
    Diminished economic opportunities.
    Privacy risks due to Kroger’s data-sharing policies.
  5. California Lawsuit: Filed in February, rejected in August, and refiled.
    Claims merger may substantially lessen competition.
  6. FTC’s Approach: FTC Director Lina Khan tight-lipped but hints at blocking if antitrust law violations proven.
  7. Kroger’s Steps: Sale of 413 stores to C&S Wholesalers.
    Paperwork filed certifying compliance with antitrust requirements.
  8. Critics’ Argument:
    Kroger and Albertsons exceed profit expectations, questioning merger necessity.

Looking Ahead

With the extended deadline, the fate of the Kroger-Albertsons merger remains uncertain. The FTC’s decision will hinge on a comprehensive evaluation of antitrust concerns, potential harm to consumers, and now, the novel argument regarding labor market competition.

As the grocery giants await the FTC’s ruling, the broader implications of this megadeal continue to stir debate, with critics highlighting potential consequences for consumers, workers, and the competitive landscape of the retail food market.


FAQs:

Q1: Why is Senator Ron Wyden urging the FTC to block the Kroger-Albertsons merger?

Senator Wyden is concerned about potential negative effects on consumers in Oregon, including fewer pharmacy options, diminished economic opportunities for small farmers, and risks to worker and consumer well-being. He also raised privacy concerns regarding Kroger’s sharing of patient information with law enforcement without warrants.

Q2: Why has the FTC extended the review period for the merger?

The FTC extended the review period to gather more information and carefully evaluate the proposed $25 billion merger’s impact on competition and consumers. The new deadline for a decision is January 17, 2024.

Q3: What is the shopper lawsuit in California about?

The shopper lawsuit in California, initially rejected in August but refiled, claims that the Kroger-Albertsons merger would eliminate a significant competitor, reducing competition and leaving consumers with limited grocery shopping alternatives.

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