FTC sues to block $25 billion Kroger-Albertsons deal

The Federal Trade Commission filed a lawsuit Monday, Feb. 26, to block Kroger’s $25 billion bid to acquire Albertsons, arguing that the merger would eliminate competition, raise prices for consumers and lower wages for workers.  A group of nine attorneys general from different states has joined the FTC’s complaint, indicating broad opposition to the merger.

“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 FTC’s Bureau of Competition. “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.”

The Kroger and Albertsons merger has been in limbo for over a year as federal and state regulators closely examine the deal. Announced in October 2022, the companies argue that by joining forces, they could more effectively compete with larger retailers. Albertsons maintains that the merger would boost competition, lower prices, and increase wages for workers, addressing concerns about its potential negative effects. 

The company further states that the merger would enable their supermarkets to compete more successfully against major retailers like Walmart, Amazon, and Costco, cautioning that overlooking these benefits could unintentionally empower these larger competitors.

Kroger CEO Rodney McMullen has strongly advocated for the merger, stating that as a larger entity, the combined companies could lower prices, increase profits, and accelerate innovation in the grocery sector. Additionally, Kroger has committed $500 million to cut customer prices and $1 billion to enhance employee wages and benefits.