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Judge Dismisses Lawsuit Against Kroger’s Proposed Acquisition of Albertsons

Kroger and Albertsons apps on phone

A U.S. judge has dismissed a consumer lawsuit that alleged Kroger’s proposed acquisition of grocery chain operator Albertsons would lead to reduced competition and increased prices.

In the Wednesday (Dec. 20) ruling, U.S. District Judge Vince Chhabria in San Francisco faulted the plaintiffs for not providing enough information about their own situations to substantiate their claims, Reuters reported Thursday (Dec. 21).

However, the judge also said that the merger, as described by the plaintiffs, does raise concerns about competition among grocery stores, according to the report.

This was the second time the judge rejected the plaintiff’s case, but he said he will allow them to refile the lawsuit, the report said.

The plaintiffs argued that the acquisition would result in higher prices, lower quality, reduced services, less innovation, job losses and even the closure of Albertsons supermarkets, per the report.

The deal, which was first announced in October 2022, has also been under investigation by the Federal Trade Commission (FTC), according to the report. The FTC has been scrutinizing the merger, and some U.S. lawmakers have called for the agency to block the deal altogether.

Kroger is currently the largest grocer in the United States based on revenue, while Albertsons ranks as the second-largest supermarket chain, the report said.

Both Kroger and Albertsons have defended the proposed merger, asserting that it would not violate U.S. competition law, per the report. Attorneys for the grocers have stated that the merger would combine two complementary organizations.

In an effort to address potential antitrust concerns, Kroger announced plans to sell 413 stores and eight distribution centers to C&S Wholesale Grocers, according to the report. However, the plaintiffs argue that this divestiture is not relevant to the overall impact of the merger.

A Kroger attorney told the judge that the companies were in discussions with the FTC to extend the timeline for completing the merger, allowing for further discussions regarding the merits of the deal and the divestiture package, the report said.

In May, the CEOs of the two firms co-authored an op-ed in The Cincinnati Enquirer in which they pushed back against opposition to the proposed merger. The merger will lower prices, Kroger Company CEO Rodney McMullen and Albertsons Companies CEO Vivek Sankaran wrote in the op-ed.