Kroger, Albertsons head to court to defend merger plan against regulators' objections
Aug. 25, 2024, 6:49 p.m.
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Kroger and Albertsons will defend their proposed merger – and attempt to address the U.S. government’s concerns – in a federal court hearing set to begin Monday in Oregon.
The two companies proposed what would be the largest supermarket merger in the history of the United States in October 2022. They argue that merging would allow them to control costs more effectively and compete better with giants like Walmart and Costco.
However, the Federal Trade Commission filed a lawsuit to prevent the deal, arguing that it would reduce competition and result in higher grocery prices at a time when food prices are already rising . The commission also claimed that product quality would decline and worker wages and benefits would suffer if Kroger and Albertsons were no longer rivals.
The FTC is seeking a temporary restraining order to block the merger while its complaint is reviewed by an internal administrative law judge. A three-week hearing starting on Monday will involve testimony from approximately 40 witnesses, including the CEOs of Kroger and Albertsons. Judge Adrienne Nelson will then decide whether to issue the injunction.
The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming all joined the case, siding with the FTC.
Kroger , based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs , Smith’s and Harris Teeter. Albertsons , based in Boise, Idaho, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s. Together, the companies employ around 710,000 people.