The Federal Trade Commission sued to block a proposed merger between grocery giants Kroger and Albertsons, saying the $24.6 billion deal would eliminate competition and lead to higher prices for millions of Americans.
The FTC filed a lawsuit in U.S. District Court in Oregon on Monday. It was joined in the suit by the attorneys general of eight states and the District of Columbia.
Kroger and Albertsons, two of the nation’s largest grocers, agreed to merge in October 2022. The companies said a merger would help them better compete with Walmart, Amazon, Costco and other big rivals. Together, Kroger and Albertsons would control around 13% of the U.S. grocery market; Walmart controls 22%, according to J.P. Morgan analyst Ken Goldman.
Both companies, immediately after the FTC announcement, said that they will challenge the agency in court.
Take a look up North to see what happens when grocery conglomerates into a single empire.
Loblaws and it’s umbrella of corporate enterprises not only control the majority of the grocery sector but also is vertically integrated throughout the supply chain from the production and transportation to sales. Their assets are so large that they are able to leverage them to also provide financial services. They own an astounding amount of retail spaces including drugstores (Shoppers Drug Mart), supermarkets (Loblaws, No Frills, T&T, and many others regionally), and megamarkets (Great Canadian Superstore). It’s a pretty contentious issue.
When the government went to ask them to lower prices because they posted record profits and clearly overcorrected for inflation, they were basically get told to get fucked.
They were also found guilty of price fixing bread and baked products, not that the fine equated near to the amount of profits made by it.
Watch their defense be something like: we already control the market, so further consolidation would not significantly increase our control of the market.
That’s what happened when Sprint was purchased. They justified it by arguing that consumers don’t have a choice anyway so does it even matter?
I sincerely hope the FTC has a good argument compared to the Activision Blizzard buyout by Microsoft. Grocery prices are out of hand and this is a merger we literally can’t afford
