Retail |

Kroger and Albertsons head to court to defend merger plan against regulators’ objections

PORTLAND, Ore. — Kroger and Albertsons defended their plan to merge – and tried to overcome the U.S. government’s objections – in a federal court hearing that began Monday in Oregon.

The two companies proposed what would be the largest supermarket merger in U.S. history in October 2022. They say joining together would help them rein in costs and better compete with big rivals like Walmart and Costco.

But the Federal Trade Commission sued to try to block the deal, saying it would eliminate competition and raise grocery prices in a time of already high food price inflation.

“This lawsuit is part of an effort aimed at helping Americans feed their families,” the FTC’s chief trial counsel, Susan Musser, said in her opening arguments on Monday.

The commission also alleges that quality would suffer and workers’ wages and benefits would decline if Kroger and Albertsons no longer competed with each other.

Before the hearing, several members of the United Food and Commercial Workers International union gathered outside the federal courthouse in downtown Portland with signs that said “Stop the merger” to speak out against the proposed deal.

“Enough is enough,” Carol McMillian, a bakery manager at a Kroger-owned grocery store in Colorado, said. “We can no longer stand by and allow corporate greed that puts profit before people. Our workers, our communities and our customers deserve better.”

Kroger and Albertsons said the merger would help secure union jobs. The company said it has added 100,000 union jobs since 2012.

To ease concerns about reduced competition and higher prices for consumers, the companies last month agreed to divest 579 stores and six distribution centers to C&S Wholesale Grocers, based in New Hampshire.

In the three-week hearing that opened Monday, the FTC is seeking a preliminary injunction that would block the deal while its complaint goes before an in-house administrative law judge. U.S. District Judge Adrienne Nelson is expected to hear from around 40 witnesses, including the CEOs of Kroger and Albertsons, before deciding whether to issue the injunction.

The attorneys general of Arizona, California, the District of Columbia, Illinois, Maryland, Nevada, New Mexico, Oregon and Wyoming all joined the case on the FTC’s side. Washington and Colorado filed separate cases in state courts seeking to block the merger.

Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter. Albertsons, based in Boise, Idaho, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s. Together, the companies employ around 710,000 people.

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