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California Attorney General Bonta Stands Firm Against Albertsons-Kroger Merger

By  |  September 19, 2024
California Attorney General Bonta Stands Firm Against Albertsons-Kroger Merger

California Attorney General Rob Bonta has reaffirmed his opposition to Kroger’s proposed $24.6 billion acquisition of Albertsons, following the conclusion of a preliminary injunction hearing in the state’s antitrust lawsuit. The case, part of a broader national legal challenge, was brought by California in collaboration with the Federal Trade Commission (FTC) and a coalition of states to prevent what they see as a threat to competition in the grocery retail sector.

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    According to a statement issued by Bonta, the merger poses significant risks to both consumers and workers, not just in California but nationwide. “If these two giants of the retail grocery industry combine forces,” said Bonta, “it’s likely that we’ll see reduced competition, a blow to unions looking to negotiate better working conditions, and higher food prices at a time when so many families are struggling to get food on the table.”

    The lawsuit, which was filed in February 2024, centers on concerns that the merger would violate federal antitrust law, specifically the Clayton Act, by creating a less competitive market. Per the statement from Bonta’s office, such consolidation could allow the companies to raise prices and harm labor market competition, potentially leading to lower wages and deteriorating working conditions for thousands of employees across California.

    Related: FTC Lawyers Wrap Up Arguments to Block Kroger-Albertsons Merger

    The Southern California grocery market, already highly concentrated, would be particularly affected by the merger. Fewer choices and higher prices are expected to hit consumers hard in the region, further straining households grappling with the cost of living. The potential impact on unionized workers, whose bargaining power could be diminished, is another critical issue highlighted by Bonta.

    This isn’t the first time California’s attorney general has pushed back against actions by the two retail giants. In October 2022, Bonta and several other state attorneys general called on Albertsons to delay a planned $4 billion payout to shareholders until the merger could be thoroughly reviewed for anticompetitive effects. In November 2022, Bonta joined legal efforts to block that payment, fearing it would undermine Albertsons’ ability to compete if the merger were blocked.

    According to the statement, Bonta emphasized that this case is part of a larger effort to protect Californians from corporate consolidation that threatens to increase prices and reduce quality jobs. “We must ensure corporations follow the rules,” Bonta added. “As the People’s Attorney, I am committed to fighting unlawful corporate consolidation.”

    Source: OAG