FTC Seeks to Block $24.6 Billion Kroger-Albertsons Merger

The Federal Trade Commission (FTC) has formally challenged the proposed $24.6 billion Kroger acquisition of Albertsons, calling the deal — the largest supermarket merger in U.S. history — anticompetitive and harmful to both consumers and workers. The FTC voted 3-0 to issue the complaint and will be joined in its lawsuit by a bipartisan group of nine state Attorneys General.

The merger, announced in October 2022, has faced challenges not just from government agencies but also from labor unions fearful that the combined company would result in net job losses. In January 2024 the companies acknowledged that delays would postpone finalizing the merger until August 2024, but even that date might be optimistic now that the FTC has formally sought to block the deal.

“This supermarket mega merger comes as American consumers have seen the cost of groceries rise steadily over the past few years,” said Henry Liu, Director of the Bureau of Competition at the FTC in a statement. “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. Essential grocery store workers would also suffer under this deal, facing the threat of their wages dwindling, benefits diminishing and their working conditions deteriorating.”

In September 2023 Kroger and Albertsons announced plans to sell 400+ stores, eight DCs, two offices and five private label brands to C&S Wholesale Grocers for approximately $1.9 billion, but the FTC has criticized the divestment as inadequate. According to an FTC release, the “proposed divestitures are not a standalone business, and C&S would face significant obstacles stitching together the various parts and pieces from Kroger and Albertsons into a functioning business — let alone a successful competitor against a combined Kroger and Albertsons.”

Unsurprisingly, Kroger disagrees with the FTC’s assertions. According to a statement, “Contrary to the FTC’s statements, blocking Kroger’s merger with Albertsons Companies will actually harm the very people the FTC purports to serve: America’s consumers and workers.

“The FTC’s decision makes it more likely that America’s consumers will see higher food prices and fewer grocery stores at a time when communities across the country are already facing high inflation and food deserts,” the statement added. “In fact, this decision only strengthens the larger, non-unionized retailers like Walmart, Costco and Amazon by allowing them to further increase their overwhelming and growing dominance of the grocery industry.”

Kroger had said earlier this month that it plans to cut prices following completion of the merger, citing actions it took following earlier mergers and acquisitions, and the company reiterated that assertion in the statement.

The FTC’s federal court complaint and request for preliminary injunction will be filed jointly with the Attorneys General of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming in the U.S District Court for the District of Oregon.