Albertsons-Kroger merger trial begins

Albertsons-Kroger merger trial overview: 

• Who: A trial over a Federal Trade Commission challenge of a proposed merger between Albertsons and Kroger began Aug. 26. 
• Why: Albertsons argues the merger is necessary to allow it to compete with big retailers, such as Walmart, Costco, Target and Amazon. The FTC argues a merger between the two grocers would be anticompetitive and harm consumers and workers. 
• Where: The merger trial is being held in Oregon federal court. 

A trial involving a Federal Trade Commission challenge of a proposed merger between grocery stores Albertson and Kroger began in Oregon federal court Aug. 26. 

Albertsons told the judge overseeing the case it might need to conduct layoffs and close some of its stores if the FTC blocks the $24.6 billion proposed merger, Law360 reports. 

The grocery store reportedly also argued it doesn’t have the wholesale buying power necessary to compete with other large retailers, such as Costco, Walmart, Target and Amazon, if the merger does not go through. 

“It could mean layoffs. It could include closing stores. It may include exiting certain markets altogether,” Law360 reports Albertsons attorney Enu A. Mainigi said. “These are the kinds of things that are on the table if the merger doesn’t go through.

FTC seeking preliminary injunction to pause Albertsons, Kroger merger

The FTC, which is seeking a preliminary injunction to pause the proposed merger, argues it is  anticompetitive and would harm consumers and workers by causing grocery prices to increase and unions to lose bargaining power. 

The agency further argues a merger would also lead to lower-quality products and services and have a negative effect on consumer choice. 

“This multibillion-dollar deal would result in Kroger swallowing Albertsons and would eliminate the competition between these two companies that shoppers and union workers depend on in one fell swoop,” FTC attorney Susan A. Musser said, as reported by Law360. 

A merger between Albertsons and Kroger would be the largest ever conducted for supermarkets in the United States and involve nearly 5,000 grocery store locations across 48 states and affect more than 700,000 workers, according to the FTC. 

The FTC filed its lawsuit to block the proposed merger in February. 

Do you think a merger between Albertsons and Kroger would harm consumers? Let us know in the comments.

The Albertsons-Kroger merger trial is In re: Federal Trade Commission, et al. v. Kroger Co., et al., Case No. 3:24-cv-00347, in the U.S. District Court for the Northern District of Oregon.

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