The Federal Trade Commission filed a lawsuit Monday to block Kroger’s $24.6 billion proposed purchase of the Albertsons Companies, calling it an “anticompetitive” deal that would create a “monopoly.”
The FTC statement asserts that the acquisition — the biggest ever seen in the U.S. grocery industry — would “eliminate fierce competition between Kroger and Albertsons, leading to higher prices for groceries and other essential household items for millions of Americans.”
Shortly after the announcement, Albertsons released a statement saying the acquisition would “expand competition, lower prices, increase associate wages, protect union jobs, and enhance customers’ shopping experience.”
A Kroger spokesperson could not immediately be reached for comment.
An FTC press release added that if the merger were to go through, it would also lead to lower quality products and services and narrow the options for shoppers on where to shop. Competition for workers would also be hurt by the acquisition, impacting their ability to secure higher wages, benefits and working conditions, the FTC said.
“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 for everyday goods, further exacerbating the financial strain consumers across the country face today,” said Henry Liu, director of the FTC’s Bureau of Competition, in the press release. “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 Albertsons comment said blocking the merger is a win for larger retail outlets like Amazon and Walmart.
“If the Federal Trade Commission is successful in blocking this merger, it would be hurting customers and helping strengthen larger, multi-channel retailers such as Amazon, Walmart and Costco — the very companies the FTC claims to be reining in — by allowing them to continue increasing their growing dominance of the grocery industry.
“In contrast, Albertsons Cos.’ merger with Kroger will ensure our neighborhood supermarkets can better compete with these mega retailers, all while benefiting our customers, associates, and communities,” the statement from Albertsons noted. “We are disappointed that the FTC continues to use the same outdated view of the U.S. grocery industry it used 20 years ago, and we look forward to presenting our arguments in court.”
* More updates to come on this story.