Antitrust trials in Oregon, Washington, and Colorado aim to halt the merger, citing potential price hikes, reduced competition, and threats to unionized workers.
U.S. antitrust regulators are nearing the end of their first legal battle aimed at blocking Kroger’s $25 billion acquisition of rival grocery chain Albertsons. The trial in Portland, Oregon, which has spanned three weeks, concluded on Tuesday.
However, this is only the beginning of the legal hurdles the two companies will face this month, with two more trials scheduled to address concerns that the merger could result in higher grocery prices.
During the Portland trial, the U.S. Federal Trade Commission (FTC) and a coalition of states presented evidence suggesting that the merger could negatively impact both shoppers and unionized grocery workers.
Witnesses, including grocery executives, union representatives, and economists, were called upon to demonstrate how the merger could lead to price hikes and reduce workers’ bargaining power. Despite this, Kroger has consistently argued that the merger is essential for lowering prices at Albertsons stores and improving the competitive stance of both chains against larger retail giants such as Walmart.
Since Tuesday, Kroger and Albertsons have engaged in a separate trial in Seattle. Washington state’s attorney general, Bob Ferguson, has raised concerns over the potential dominance of the two chains in the local market, where they control half of all grocery sales.
If the merger proceeds, 124 stores are expected to be transferred to C&S Wholesale Grocers. Ferguson further argues that Kroger might be incentivized to close unionized stores and reopen them under non-union conditions, something that could significantly affect workers in the state. “We look forward to standing up for Washingtonians in Washington state court,” Ferguson stated in response to the case.
Adding to these challenges, Colorado’s attorney general, Phil Weiser, is preparing to present his case against the merger in a trial set to begin on September 30 in Denver. Weiser is concerned about the impact on local food producers and consumers, citing the importance of competition between Kroger and Albertsons in Colorado’s agricultural sector. “Colorado cares about having local food,” Weiser emphasized in a recent interview, pointing out that this merger could have significant consequences for the state’s farmers and the availability of locally produced food.
The legal battle over this merger is not just about grocery prices; it also addresses broader concerns over market competition and worker conditions. While Kroger and Albertsons claim that the merger will lead to lower prices and increased wages, critics argue that it could ultimately reduce choices for consumers and weaken the bargaining power of unionized workers. In a statement, Kroger defended its position, saying, “Only global, non-unionized giants like Walmart, Amazon, and Costco will benefit from this deal being blocked.”
According to Reuters, Kroger and Albertsons have already spent $864 million in merger-related costs this year. Despite the mounting legal challenges, they remain committed to seeing the deal through. The outcome of these trials will be critical in determining the future of the U.S. grocery market and the role of competition within it.
