Grocery Dive’s Post

FTC Challenges Kroger’s Acquisition of Albertsons And now this... The Federal Trade Commission (FTC) has initiated legal action to prevent Kroger Company's acquisition of Albertsons Companies, Inc., valued at $24.6 billion, citing antitrust concerns. This proposed merger, the largest in U.S. supermarket history, is believed by the FTC to significantly reduce competition, potentially leading to higher prices, reduced quality, and lesser variety for millions of American consumers. The FTC argues that the merger would harm consumers by increasing grocery prices and reducing service quality and negatively impact thousands of grocery store employees by diminishing competition for wages, benefits, and working conditions. The FTC's complaint highlights the direct competition between Kroger and Albertsons, which has historically benefitted consumers and workers through lower prices and better employment terms. Both companies have admitted that their merger would have anticompetitive effects, with one executive even suggesting it would create a grocery monopoly. However, the size of Amazon, Whole Foods, and other food-related sold on the site do not. Hmmm. What about Trader Joes buying Winn-Dixie? Does that not make a regional monopoly? Kroger and Albertsons have attempted to mitigate antitrust concerns by proposing to divest several hundred stores and other assets to C&S Wholesale Grocers. However, the FTC deems this insufficient, arguing that it does not adequately replace the competition lost through the merger and overlooks the challenges of integrating these divested assets into a competitive entity. The lawsuit emphasizes the potential harm to both consumers, through increased prices and decreased quality and innovation, and to workers, by reducing the leverage of unions to negotiate favorable terms. The FTC, joined by a bipartisan group of nine attorneys general, seeks to block the merger pending a formal hearing. This legal challenge underscores the FTC's role in protecting competition and consumer interests, particularly when grocery prices are a significant concern for many Americans. The outcome of this legal challenge could have far-reaching implications for the retail and grocery sectors and antitrust enforcement in the United States. #Antitrust #GroceryMerger #ConsumerRights  #FairCompetition   #RetailInnovation

🚨 Breaking News - U.S. regulators and nine state attorneys general are taking legal action to block the $24.6 billion merger between Kroger and Albertsons, the nation's top two supermarket chains. 🛒 💼The lawsuit, filed in federal court, claims the merger would harm competition, leading to higher prices and lower quality for consumers. 👎 ''Americans are spending 26% more on groceries since 2020'' according to the Bureau of Labor Statistics, and the highest portion of their income on food than any point over the past 30 years. 😓 🙅♀️ Additionally opposition from unions, small grocers, and bipartisan lawmakers have been active from the start as this merger would create a monopoly and hurt the business of local markets and farmers 🥕 🥑 📈 While both Kroger and Albertsons argued that the merger would bolster their competitiveness against Walmart and Amazon, the FTC remains skeptical, warning of further price increases for consumers. Despite Kroger's plans to appeal, the lawsuit underscores a broader trend of antitrust enforcement questioning the effectiveness of divestitures in fostering competition. full article here: https://lnkd.in/dSCiNkeV.

(Dallas Morning News) The Federal Trade Commission Monday sued to block the largest proposed supermarket merger in U.S. history—Kroger’s $24.6 billion acquisition of the Albertsons— alleging that the deal is anticompetitive. The FTC issued an administrative complaint saying it believed the law is being violated and authorized a lawsuit in federal court to block the proposed merger. The Commission’s vote to proceed was 3-0. The federal action follows two lawsuits filed this year by the attorneys general in Washington and Colorado. The proposed merger has been closely watched in North Texas, where in addition to Kroger stores, Albertsons operates its namesake stores, plus Tom Thumb and Market Street in D-FW. The FTC said a group of nine attorneys general is joining the FTC’s complaint which will be filed in the U.S. District Court for the District of Oregon. The joining states are Arizona, California, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming plus the District of Columbia. “This supermarket mega-merger comes as American consumers have seen the cost of groceries rise steadily over the past few years. 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,” said Henry Liu, Director of the FTC’s Bureau of Competition. #mergersandacquisitions #kroger #albertsons #ftc

What can we learn from the FTC's challenge of the Kroger/Albertsons transaction? Read about the key takeaways in this post by my colleagues Justin Stewart-Teitelbaum, Angela Landry, and Gabriella Small #antitrust #m&a #freshfields

Ohio's attorney general has called on a federal court to scrap the FTC's antitrust suit to block the Kroger-Albertsons merger deal. In an amicus brief filed with a U.S. District Court in Oregon, Ohio AG David Yost and three other state AGs argued the merger transaction should proceed because the FTC’s opposition is "based on a flawed understanding of the marketplace in which the two retailers operate." https://lnkd.in/g8hVyFBz Indeed, grocery industry observers have said that the FTC's suit may be overly focusing on conventional supermarkets in evaluating competition in the retail grocery sector, while overlooking the impact of mass chains and online retailers like Amazon, which have been siphoning market share from traditional grocers for decades. Earlier this week, Kroger and Albertsons argued as such in a detailed filing in response to an FTC motion for a preliminary injunction against the merger. (Photo courtesy of The Kroger Co.) https://lnkd.in/g5HjPtky

The Biden administration’s antitrust efforts from The White House continue, focusing this time on the grocery retail sector. Federal Trade Commission (FTC) is suing to block the $25B (£19.7B; €23B) merger between Albertsons Companies and Kroger. What’s notable about this FTC antitrust suit is that Albertsons and Kroger rank fourth and tenth among U.S. retailers, respectively, with combined annual domestic sales of $224B (£176.5B; €206.5B). Even if merged, Albertsons Companies and Kroger would only match 96.1% and 44.8% of Amazon and Walmart’s domestic sales, which stand at $233B (£183.6B; €214.8B) and $499B (£393.3B; €460.1B) respectively. Worth noting: not all of Amazon and Walmart’s sales come from groceries, which makes the comparison less than perfect. Strangely, the FTC has not taken action to block the controversial $35B (£27.5B; €32.2B) merger between Capital One and Discover Financial Services in the financial services sector. This discrepancy raises questions about the FTC’s priorities and criteria for antitrust enforcement across different industries. Read about the Capital One and Discover Financial Services merger: James Surowiecki, Fast Company https://lnkd.in/g7GJp3TB Check out a great visual on top U.S. retailers from Marcus Lu, Visual Capitalist https://lnkd.in/gjNHfqT7 Nathaniel Meyersohn, CNN https://lnkd.in/gmVZrT_E #grocery #retail #antitrust #ftc

The Federal Trade Commission will do all it can this week to persuade an Oregon federal judge to issue an injunction to block Kroger and Albertsons Companies from completing their proposed merger. Expert witnesses hired by the FTC will testify that grocery prices for everyday Americans “could rise” if Kroger and Albertsons combine operations. However, the two grocery giants have proposed a solution to sell more than 500 stores of the newly combined chain to a new would-be rival, C&S Wholesale Grocers that will maintain competition in the supermarket sector across many markets but the proposal has not deterred the FTC from trying to block the merger. Kroger says it needs more scale to compete with Walmart and a swarm of expanding grocery retailers, including specialty grocer Trader Joe's, discount chains such as ALDI USA and Lidl US and wholesale clubs such as Costco Wholesale and BJ's Wholesale Club. Kroger says that after acquiring Albertsons, it plans to lower prices by $1 billion but the FTC doesn’t buy that. The FTC says Kroger would have the ability to raise prices in many markets if the merger goes through. Stay tuned. The outcome of whether the proposed merger happens or not has the ability to impact the very stable open-air grocery-anchored neighborhood center sector that is experiencing historically low vacancy rates.

The trial where U.S. anti-trust regulators made their case to block Kroger's $25 billion bid to buy rival grocer Albertsons will conclude on Sept. 17, but the deal's legal challenges have just begun, with two more trials this month to hear complaints the merger could jack up grocery bills. For the past three weeks, the FTC and a coalition of states have sought to prove at trial in Portland, Oregon, that the deal would harm shoppers and unionized grocery workers. By the time that case concludes, the companies will be on day two of another trial in Seattle where Washington state's attorney general is challenging the deal. Beginning on Sept. 30, a judge in Denver will hear Colorado's arguments for stopping the deal. Kroger and Albertsons have spent $864 million in merger costs this year, and they oppose all three cases. Kroger says the merger will result in lower prices and higher wages. Jody Godoy has more: https://reut.rs/47wbItN

🚨 Blocked? That’s what the FTS is aiming to do along with a host of other stakeholders in what would be the largest proposed supermarket merger in U.S. history—the $24.6 billion merger of Kroger and Albertsons. 📌 The FTC moved to block the merger by issuing an administrative complaint and authorizing a lawsuit in federal court. (via CSA) The FTC cited higher prices for shoppers and lower wages for workers as the reason for blocking the acquisition. Kroger countered that the merger would achieve the opposite of what the FTC stated and would actually lower 📉 prices and protect union jobs. 📌 The two unions representing employees of the respective companies have been adamant in their opposition to the deal. In addition, a group of nine attorneys is joining the FTC’s complaint. Wow. What do you think about this historic merger and the FTC’s move to block it? Let me know in the comments below! ⬇️ Do you support the merger? Read more about this deal here https://bit.ly/3P6mS06 #TSCG #CREtail #RetailStores #CRE #Retail

Colorado isn't holding its peace. The $25 billion marriage between Kroger and Albertsons is on pause for now until a Colorado court rules on the state’s lawsuit to block the deal. It's been a long engagement since the deal has faced regulatory scrutiny since it was first announced in October 2022. The supermarket companies currently have about 5,000 grocery stores between them. Supermarket drama reaches a high point...Colorado isn't a huge fan of the deal on the grounds that it will reduce competition, which will subsequently raise food prices, jobs, and limit consumer choice. But Colorado isn't the only one not in favor of the Kroger-Albertsons union. A multi-state soap opera unfolds. A separate federal court hearing involving the FTC and eight states and Washington, D.C. oppose the deal as well on the ground it would reduce competition and hurt workers. At this point, it's anyone's guess if Kroger and Albertsons will continue with this 'Romeo and Juliet' battle at the checkout stand, but those opposed remain steadfast in their contention that the deal will have negative ripple effects affecting shoppers and workers to farmers and suppliers https://lnkd.in/gfanr_vw #kroger #albertsons #colorado #supermarket #merger #legal #ftc #antitrust #consumers #competition