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California AG Probes Kroger’s Acquisition of Albertsons Over Food Desserts

 |  August 20, 2023

California Attorney General Rob Bonta voiced his concern over Kroger’s planned $24.6 billion acquisition of Albertsons, concerning the potential lack of access to pharmacies in poorer parts of cities or rural areas.

In April 2021, the California Attorney General’s Office initiated an investigation into the merger to determine if it will lead to more ‘pharmacy deserts’ in the state. Research from the University of Southern California found one in three neighborhoods in 30 populous U.S. cities were already classified as such.

The planned merger, announced in October 2020, would create a grocery chain with nearly 5,000 stores nationwide. Kroger and Albertsons have both pledged to keep stores with pharmacies open, but Bonta has voiced his deep concern “as to whether that promise will truly be maintained.”

Read more: US Unions Talk Out Against The Albertsons-Kroger Merger

In response, a spokesperson for Kroger stated that the company is working “with antitrust enforcers to ensure that any stores that are sold to satisfy antitrust concerns will remain open and viable, including any stores with pharmacies.” Furthermore, they stated that post-transaction, Kroger will operate the pharmacies that are part of the Albertsons’ stores that it acquires.

However, a source with knowledge of the discussions between the Federal Trade Commission, the agency in charge of evaluating the merger, and the California Attorney General’s Office, has expressed strong disagreement. The source stated that “low-income people were likely to lose access to pharmacy services if the deal goes forward”, as the least profitable stores tend to be the first to be closed by large companies looking to cut costs.

At present, 2,254 Kroger-owned stores have pharmacies while some 1,700 Albertsons supermarkets have pharmacies. The outcome of the investigation remains to be seen. Will the investigation deter the companies from proceeding down their planned merger? Or will the merger take place, and if so, what are the potential implications of the acquisition for those living in poverty and remote communities?

Source: Reuters