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FTC Moves to Block Kroger-Albertsons Merger, Over Prices and Worker Wages

 |  February 26, 2024

The US Federal Trade Commission (FTC) announced on Monday its intention to sue to prevent the merger of retail giants Kroger and Albertsons, asserting that such a union would likely lead to increased prices for consumers and diminished wages for workers.

The FTC, in a released statement, disclosed that it has issued an administrative complaint and has sanctioned legal action in federal court to halt Kroger’s acquisition of Albertsons. Joining forces with the FTC, a bipartisan coalition of nine attorneys general from states including Arizona, California, and Illinois have filed a court complaint against the proposed merger, reported CNBC.

Henry Liu, the Director of the FTC’s Bureau of Competition, expressed concerns over the potential ramifications of the merger, stating, “Kroger’s acquisition of Albertsons would lead to additional grocery price hikes for everyday goods, further exacerbating the financial strain consumers across the country face today.”

The proposed merger, initially announced in October 2022 with a price tag of $24.6 billion, has been under regulatory scrutiny for over a year. Kroger and Albertsons argued that by combining their resources, they would enhance their competitiveness against retail giants like Walmart, Amazon, and Costco.

Read more: Kroger Wants Antitrust Suit Over Albertsons’ Merger Dismissed

However, the FTC contested this assertion, highlighting potential adverse effects on consumers and workers amidst a backdrop of rising food prices and inflation. The Biden administration has been particularly wary of corporate consolidations and has prioritized consumer protection as a cornerstone of its agenda.

Kroger CEO Rodney McMullen defended the merger, emphasizing the potential benefits of the combined entity, including lower prices for consumers and increased profitability. The company pledged substantial investments, including $500 million to reduce prices for customers and $1 billion to improve employee wages and benefits.

Despite Kroger’s arguments, opposition to the merger has been robust, especially from labor unions representing Kroger and Albertsons employees. Concerns over the consolidation’s impact on consumer prices and worker wages have resonated strongly, fueling the FTC’s move to block the deal.

The issue of rising grocery prices has also gained traction on the political stage, with President Joe Biden recently criticizing grocery chains for allegedly exploiting consumers while maintaining high profit margins.

As the legal battle over the Kroger-Albertsons merger intensifies, it underscores broader debates about the balance between corporate consolidation, consumer welfare, and worker rights in an evolving economic landscape.

Source: CNBC