Retail |

King Soopers parent company sues Federal Trade Commission over embattled supermarket merger

The Kroger Co., parent company of King Soopers and other grocery chains nationwide, is suing to try to block the Federal Trade Commission’s administrative proceeding against the supermarket giant’s proposed merger with Albertsons.

The lawsuit, filed by Kroger on Monday in U.S. District Court in Cincinnati, is challenging the FTC’s attempt to block the merger through administrative action as unconstitutional.

The proposed merger is being challenged by state attorneys general, including Colorado’s Phil Weiser, in addition to the FTC. Colorado and other states have sued on grounds that a merger between Kroger, the country’s largest supermarket operator, and Albertsons Cos., the nation’s second-largest supermarket operator, would violate antitrust laws.

Albertsons is the parent company of Safeway.

The $24.6 billion merger is on hold until a decision is reached in the Colorado lawsuit. The trial is set to start Sept. 30.

Denver District Judge Andrew J. Luxen issued a preliminary injunction in July  — which all sides agreed to — to pause any consolidation.

Besides the administrative challenge of the merger, the FTC has filed a lawsuit in federal court in Oregon to prevent Kroger from acquiring Albertsons pending resolution of the administrative proceeding. The lawsuit by Kroger contends the federal agency’s actions are unconstitutional because “the FTC intends to adjudicate Kroger’s private rights within the partisan Executive Branch rather than the independent Judiciary.”

Kroger said another constitutional concern is that the administrative law judge overseeing the FTC’s proceeding exercises executive authority but cannot be removed from the job by the president. The judge can be removed only for “good cause” by the Merit Systems Protection Board.

“Because the FTC’s (administrative law judges) are unconstitutionally protected from removal, they cannot lawfully preside over an administrative proceeding,” the lawsuit said.

A spokeswoman for the FTC declined to comment Tuesday on Kroger’s lawsuit. She said the administrative proceeding has technically started, but only to open the record of the process.

Kroger, which also owns City Market stores, and Albertsons announced the proposed merger in October 2022. Kroger and Albertsons have said consolidation would better position them to compete against national, nonunion discount grocers such as Walmart and Costco.

Kroger has also said the merger would generate $1 billion in higher wages, expanded benefits, long-term job security and a strong unionized workforce.

However, the United Food and Commercial Workers Union, which represents Kroger and Albertsons employees, opposes the consolidation. United Food and Commercial Workers Local 7, which represents workers in Colorado and Wyoming, argues the merger would harm employees, suppliers and customers, who would face higher prices due to lack of competition.

Kroger and Albertsons have announced plans to sell hundreds of grocery stores to New Hampshire-based C&S Wholesale Grocers to allay fears regarding the lack of competition once the merger is completed.

In Colorado, the grocery chains would sell 91 stores. Two Albertsons stores are on the list of those to be sold. The rest are Safeways. That’s the bulk of the 105 Albertsons and Safeways in the state.

Kroger owns 148 stores in Colorado, which operate under the King Soopers and City Market banners.

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