California Attorney General Rob Bonta joins legal action
The Federal Trade Commission (FTC), in conjunction with California and seven other states, has announced a lawsuit challenging the proposed $24.6 billion merger of grocery giants Kroger and Albertsons. California Attorney General Rob Bonta announced the state’s involvement in the litigation during a news conference this week in downtown Los Angeles. Bonta later issued a statement calling the merger “bad for workers, for agricultural producers and for California communities.”
"In some markets in Southern California, Kroger-Albertsons is excited to be the only one-stop grocery option," Bonta said. "Today we are going to bat for a more just and competitive economy, one where companies compete for labor and where prices and service matter. This merger will leave Californians with limited choices over where to shop-- and for workers in this industry, where to work. As many families continue to feel the burden of inflation, fighting corporate consolidation that threatens to increase prices and reduce service is more important than ever."
California, Arizona, Illinois, Maryland, Nevada, New Mexico, Oregon, Wyoming, and the District of Columbia are all a part of the litigation led by the FTC.
"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 of everyday goods, further exacerbating the financial strain consumers across the country face today,” said Henry Liu, director of the FTC's Bureau of Competition. "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 proposed merger was originally announced in 2022 and would reportedly consolidate the ownership of Ralphs, Albertsons, Vons, and other large supermarket chains. If the consolidation were to go through, the new company would have almost 5,000 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies, and 2,015 fuel centers.
In a new statement announcing the deal, Kroger said the new consolidated company foresees divesting some new stores. These stores will be a new stand-alone company established by Albertsons named SpinCo. The merger is a new effort by large grocery stores to compete with non-union stores such as Walmart and Costco. The United Food and Commercial Workers union has expressed opposition, noting that it will create a monopoly that would harm workers and raise prices for consumers.
