Lawmakers Divided Over Kroger’s $24.6B Acquisition of Albertsons

Six lawmakers have raised concerns over the proposed $24.6 billion acquisition of Albertsons by Kroger, according to a letter obtained by Reuters.

Sens. Elizabeth Warren, Mazie Hirono, Bernie Sanders, and Cory Booker, along with Reps. Summer Lee and Alexandria Ocasio-Cortez, wrote to the Federal Trade Commission (FTC) on Monday expressing their opposition to the deal. The lawmakers argue that the proposed divestiture of 413 stores by Kroger to C&S Wholesale Grocers would not adequately address potential harms to consumers, workers, and the grocery industry.

Kroger and Albertsons, both major players in the grocery retail sector, announced their merger plans and anticipate completing the transaction by early 2024, pending approval from the FTC after an antitrust review.

The dissenting lawmakers contend that divestitures as a remedy to large-scale mergers often fail to maintain competitive conditions. They argue that companies may have an incentive to ensure that the businesses they spin off do not succeed. In this case, C&S Wholesale Grocers, backed by financial support from SoftBank Group, primarily operates as a supplier rather than a grocery store operator, raising concerns among the legislators.

Read more: US Unions Talk Out Against The Albertsons-Kroger Merger

Kroger spokesperson responded to the opposition, stating, “Kroger’s merger with Albertsons will mean workers gain from $1 billion in higher wages, expanded benefits, long-term job security, and a strong unionized workforce. The merger will also mean lower prices and more choices for fresh food for customers and more investments in our communities.”

In contrast, other lawmakers, including congressmen Greg Landsman, Brian Fitzpatrick, and Josh Gottheimer, have sent letters to the FTC in support of the Kroger-Albertsons deal. Albertsons also defended the merger, asserting that it would expand competition, lower prices, protect union jobs, and enhance customers’ shopping experience.

Albertsons further argued that blocking the deal would only benefit large, nonunion retailers like Amazon and Walmart. The company contends that a combined Kroger and Albertsons would empower neighborhood supermarkets to better compete against these retail giants, ultimately benefiting both consumers and workers.

The FTC’s decision on the proposed merger will play a crucial role in determining the future landscape of the grocery industry and the potential impact on consumers, workers, and competition.

Source: Reuters